San Francisco Passes "Retail Worker Bill of Rights" & IFA Responds

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On November 25, 2014, the City of San Francisco unanimously passed a new law called the "Retail Workers Bill of Rights." If it is signed by Mayor Edwin Lee, it would go into effect next summer.

Among other things, the law would require retailers to give schedules to workers at least two weeks in advance, and penalize companies for noncompliance. Further, if a company is sold, workers with at least six months of tenure would be guaranteed work with the new owner for at least 90 days.

The problem with the law is, like the minimum wage laws in Seattle and Chicago, it disproportionately targets franchise companies. The law would apply to any retailer with at least 20 locations worldwide that also have at least 20 workers. This would put independent franchise owners at a disadvantage vis-a-vis other small businesses, because even a franchisee with a single location could be considered to fall under the law's criteria if the franchisee's entire franchise system counts more than 20 locations, worldwide. This is fundamentally unfair to franchises.

To illustrate the point: consider mom-and-pop business owners, the Smiths, who own a single Quizno's sub shop in San Francisco. The Smiths compete with the Joneses, who own an independent (non-franchise) sub shop one block away from the Smiths. The Smiths, whose annual sales are about the same as the Joneses (but also have to pay royalty, marketing, and other fees to their franchisor), would be required to comply with the new law because they are part of a large franchise system, while the Joneses are free to continue operating their business as usual. This inequity makes it difficult for franchise operators to compete.

The International Franchise Association has responded to this inherent inequity by writing a letter (available here) to Mayor Lee urging him to veto the new law. We will follow this story as it develops.

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This page contains a single entry by Matthew Kreutzer published on December 1, 2014 6:44 PM.

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