Should Franchisors be Concerned about the New Workforce Regulations & FLSA Enforcement?

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Two weeks ago, Joe Caruso wrote up an overview of How Important Franchising was to the US Economy, based on Steve Caldeira's presentation to CAFA.

I have looked at the presentation further, to find out what the IFA was doing at on the legislative level.

Here is an overview of the IFA's top concerns.

Public Policy Issues.png

Now, I found it very interesting that the IFA, which is mostly comprised of franchisors, would be interested in "Workforce Regulations".  

My experience as a franchisor is that franchisors are very reluctant to discuss with their franchise owners anything do with HR compliance.  

Franchisors leave it to franchisee owner's to obey all state and federal workplace laws.

Even more puzzling to me was this slide:


Ok, I get why franchisors are worried about anything that extends the jurisdiction or reach of the NRLB.

But, why are franchisors worried about David Weil, "the nominee for Wage & Hour Division Administrator"?

Wage and Hour violations happen at the franchise owner level, unless the franchisor has significant units not in compliance.

The audience didn't get an chance to ask Steve more about this, so I am putting this out there.  

Why should the franchisor be worried about more Wage and Hour violations, unless their own units are not in compliance?  

Why is the franchisee's failure to comply with local state and federal Wage and Hour laws a concern for the franchisor?  I don't get it.


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