The Unions’ War on Small Businesses

[Geee]

Heritage Foundation:

Would you like to own a small business someday? If so, sorry — the Service Employees International Union would rather you didn’t. The SEIU has convinced the National Labor Relations Board (NLRB) to eviscerate the franchising model that many small-business owners rely on.

 

Under the current model, these small-business owners pay for the right to use a corporate brand. The franchising corporation researches appealing products. It also does marketing to promote the brand. In return, the local franchisees agree to produce those products to fit certain price and quality specifications. The local franchisee handles all the hiring and employment.

 

This division of labor cuts the risks of starting a small business, because the franchisee can focus on running the business without having to develop a market niche from scratch. A franchisee opening a new restaurant, for example, doesn’t need to market a new menu. The corporate brand has already done the work. The franchisor similarly does not have to operate thousands of local restaurants remotely.

 

Many businesses, from Burger King to Jiffy Lube to the Hair Cuttery, use franchising. It enables many Americans to run small businesses that would otherwise never get off the ground.