Minorities, according to a Washington Free Beacon report from Bill McMorris.
The franchise model allows individuals to open their own businesses under larger corporate brands, such as McDonald’s, in exchange for an annual fee. Those franchisees handle the day-to-day business operations with the national brand handling marketing and, in some cases, supply. An analysis of the nation’s franchisees conducted by Competitive Enterprise Institute, a free-market think tank, found that the business model has been a boon to immigrants and minority entrepreneurs.
“Minority-owned franchise businesses succeed at a rate 46 percent higher than that for minority-owned non-franchise businesses,” the report says.
The federal government’s top labor arbiter, the National Labor Relations Board (NLRB), is expected to issue a ruling on the joint employer standard in the Browning-Ferris case. It could determine whether franchisors are joint employers and, therefore, liable for the actions of its franchisees.
NLRB General Counsel Richard Griffin, a former union lawyer, penned an amicus brief endorsing that argument and, in July 2014, brought charges against McDonald’s for the business practices of small business owners under the company umbrella. The CEI report said that if the NLRB upholds Griffin’s opinion, it would harm the prospects of franchisees as corporations seek to avoid legal troubles.
“The franchise system benefits business startups, especially minority entrepreneurs seeking to start their own businesses. Holding corporate headquarters responsible for a franchisee’s workforce would make franchising much less attractive as a business model,” the report says.
Matthew Haller, spokesman for the International Franchise Association, which represents the interests of about 800,000 U.S. franchising businesses, said that 20 percent of franchises are minority-owned, 30 percent higher the national average of small businesses. Those businesses play a vital role in minority communities, he said.
