I’m not sure what they’re suing about if even the International Franchise Association acknowledges that franchises are different from “local small businesses”:
“Who in their right mind wants to become a franchisee in Seattle now? They are immediately placed at a competitive disadvantage to local small businesses,” said Matt Haller, a spokesman for the International Franchise Association, based in Washington, D.C.
As I understand the English language, to assert that franchisees are at “a competitive disadvantage to local small businesses” inherently implies that franchisees are not local small businesses. Which of course runs counter to the IFA’s entire legal argument. Haller didn’t say “other” local small businesses, because franchisees are clearly different. If it was a slip, it was a Freudian one.
Regardless, this motion for a preliminary injunction is just grandstanding. A) Seattle’s $15 minimum wage law doesn’t go into effect until April. The lower court will almost certainly decide the underlying suit before then, so there’s no chance for “irreparable harm.” And B), to grant an injunction the court would have to determine that the IFA has a decent chance of prevailing on its hilarious claims, and that just doesn’t seem likely given the past 80 years of legal precedent.
In responding to a recent National Labor Relations Board recommendation that franchisors and franchisees be designated as “joint-employers,” the IFA responded by claiming that this would “threaten the sanctity of hundreds of thousands of contracts between franchisees and franchisors.” It is a similar legal argument to what the IFA has been making against Seattle’s $15 minimum wage ordinance.
Indeed, the IFA is banking on nothing less than returning to the pre-New Deal legal framework of the Lochner era, in which the right of parties to enter into private contracts trumps the right of government to regulate business. Under this framework, not only would Seattle’s minimum wage be unconstitutional, but all minimum wages would. As well as most other federal, state, and local business regulations.
I wouldn’t put anything beyond the schemes of the right-of-right Roberts court, but until that happens, it’s hard to imagine a US District court judge viewing the IFA’s radical claims as being credible enough to warrant an injunction.
Funny how people who happily pay $100,000 for a watch or $100,000,000,000 for a painting think its the end of the world if they have to pay workers $15.00 an hour. You humans are strange.
Criminalizing Poverty In America
If you’re a single mother with three kids on welfare, conservatives think you’re a bum and moocher. But if you try to get a job, you may go to jail and lose your kids.
http://www.cnn.com/2014/08/07/.....?hpt=hp_c2
Roger Rabbit Commentary:
Roger Rabbit Commentary: I wish people would make up their minds. Do they want single moms to work and support their kids, or stay home and parent their kids?
Work and support their kids.
If the big guys can’t figure out how to make a profit with their franchises while paying a decent salary then it is time for them to go.
“If the big guys can’t figure out how to make a profit with their franchises while paying a decent salary then it is time for them to go.”
Yeah, “poverty wages are at the core of our business model,” is hardly a reason to keep that business model.
I am looking forward to more locallly-owned places to eat, and fewer McDeath-on-a-stick corporate behemoths.
Or maybe Matt Haller was referencing the stance of Seattle politicos like Kshama
SavantSawant who think franchisee owners are part of the big organization and not local small business owners!Take off the blue DUMMOCRETIN glasses and look at it from all commentary angles!
@7 — “Take off the blue DUMMOCRETIN glasses and look at it from all commentary angles!”
“An open mind is an empty mind.” WFB Jr
Well, we’re getting back into Iraq. Isn’t THAT just lovely!!
@5 Actually, McDonalds franchisees are in a position somewhat akin to Arkansas chicken farmers, in that the franchisees are little more than indentured servants. According to what I’ve read in investment sources, McDonalds makes two-thirds of its money from franchise fees and only one third from operating profits from its own company-owned restaurants.
Franchisees are required to put up a considerable amount of capital (McDonald’s won’t talk to you unless you have at least a million dollars of personal assets); and if you agree to be a McDonalds franchisee, the parent company basically owns and rents the store to you, and dictates nearly every detail of how you run your business. After you pay them rent and franchise fees, you’re not making a lot of margin or return on investment. In addition, if you don’t work full-time returning the restaurant yourself, paying a competent manager to run it for you cuts further into your limited profit margin.
Owning a McDonalds franchise is sufficiently onerous that the parent company is having difficulty recruiting franchisees. While McDonald’s Corporation is a very big, very successful, and very profitable mega-company, it’s likely a different story for a local franchisee, who may be already financially stressed and feels the last thing he needs to make his life even more miserable and less rewarding is a mandate from either the parent company or local government authorities to pay higher wages to his employees.
This doesn’t mean I’m defending the franchise owners or that I’m opposed to raising the minimum wage. I’ve been plain and outspoken about my support for the $15 minimum wage in these comment threads. My expectation is that business owners will pass their higher labor costs through to customers with price increases, which is what always happens in a capitalist economy. In this instance, raising prices won’t put the business owner at a competitive disadvantage with other fast-food operators, because they’ll have to pay the same wages and raise their prices, too.
What it might do is drive away some customer traffic. That’s already happening; when family incomes aren’t going up, if eating out costs more, they’re likely to cut back. The entire restaurant industry, not just fast food, is struggling with stagnant or declining sales. The few chains that are growing (e.g., Chipotle and Panera) are poaching customers from established rivals; there is not new consumer spending flowing into the industry as a whole.
The point of this comment is that I think it’s a bit unfair to portray franchisees as super-wealthy business owners who can easily absorb wage increases. On the whole, you must be at least moderately wealthy to own a McDonalds franchise — owning such a business is out of reach for most of us. These owners aren’t poor, and don’t live poor, they’re doing well compared to the average American. But investing in a business is always a numbers game, and the profit margin is incremental to begin with, every addition to the cost structure — whether higher ingredient costs or higher labor costs — is problematic. Given typical franchise margins, it doesn’t take a whole lot of increase in costs combined with decrease in sales to push the business into a net loss.
Raising wages is not pure cost, though. There are some offsetting gains. If fast food workers are paid $15 an hour, franchise owners can expect less turnover, lower training costs, and improved efficiency from more experienced workers. So, to some extent at least, higher wages pay for themselves.
I read an investing article yesterday that said at McDonalds restaurants in Denmark teenage new-hires start at $18 an hour and regular full-time employees earn a minimum of $21 an hour. These restaurants have not gone out of business and their owners are not living under bridges. I think our domestic fast-food restaurants can figure out ways to pay their help $15 an hour and still be profitable businesses. At least, I’m not convinced otherwise.
As for me, I own and will continue to own McDonalds stock, and I may buy more shares imminently. For the long-term retirement investor looking for reliable dividends, steady dividend growth, and a stock price that steadily plods upward, MCD is one of the very best stock investments out there. No, it won’t double in two years, like Walgreen did between June 2012 (when I bought it) and June 2014 (when I sold it). But successful stock investing is really a compounding game — it’s all about making 5% to 10% annual gains grow into gigantic numbers by reinvesting them and compounding them over and over and over. You know — 1 x 1.05 = 1.05; 1.05 x 1.05 = 1.10; 1.10 x 1.05 = 1.16; 1.16 x 1.05 = 1.22, and so on … given enough time, it eventually becomes a huge number. The annual dividend I get from my Starbucks stock is now 47% of what I paid for the stock.
You know, raising the minimum wage will increase the money going into the Social Security Trust Fund. I’m looking to hit that little nest egg in about 8 years, so $15 an hour might mean a little more for me.
@9 The average American knows little or nothing about Iraq — many don’t even know where it is on the map. What’s happening now — a bunch of medieval muslim fundies are slaughtering every Christian they lay hands on — is a direct consequence of Bush’s decision to topple Saddam, and underlines the stupidity of his policies.
Saddam was an odious dictator, to be sure, and we all got an undeniable feel-good rush from overthrowing and killing him (and his raping and murdering sons). But Bush and his henchmen, due to their ignorance of history and reality, or perhaps in disregard of it, opened a can of worms that, in the end, resulted in vastly more violence and cost many more lives than if they had let well enough alone.
Let’s start with the fact that Saddam was NO THREAT to the United States or the American people. None, nada, zip, zero. He did not have WMDs; but even if he had them, he had no means of delivering them to the North American continent; but even if he had such means, he had no intention of doing that. All of his threats and bluster were designed to intimidate his Arab neighbors. Saddam’s goal was to acquire hegemony over the Arab world under his dictate — sort of a mini-Soviet Union with its satellite states.
Lying underneath that was the fact that Iraq is not, and never has been, a country. Its borders were artificially drawn by the British for their own colonial convenience, and those borders happened to enclose three tribal groups who don’t like each other and have never gotten along — Shiites, Sunnis, and Kurds. The only way it was possible to keep these groups together under a common flag — and keep them from going after each other’s throats — was by a thug like Saddam running a brutally repressive regime. As one U.S. State Department official steeped in realpolitik put it, “Why do we care which thug is in power in Baghdad?” Sure, Saddam (and preceding thugs) killed a significant number of his own people, but there really wasn’t much of that going on anymore when Bush invaded Iraq; and the main point here is that a lot more Iraqis would have been dead if a brutal thug like Saddam hadn’t killed some of them in order to cow the rest of them into submission — as later events were to prove. Bush’s war to rid Iraq of Saddam cost far more Iraqi lives than Saddam ever took.
I’m sure the Iraq specialists in the CIA and State Department knew and understood all this, and it’s completely unreasonable to assume they didn’t advise the political decision makers about it, so we have to assume that Bush deliberately disregarded the known facts of life about Iraq because they didn’t jibe with his policy preferences.
I repeat, Saddam was not a nice man, and nobody should mourn him; but if he were still in power in Baghdad, they were be no ISIS gobbling up Iraqi territory and chopping off Christians’ heads with swords. There would be no civil war in Iraq killing vast numbers of Iraqis. And, of course, there would be no nuclear weapons sitting on ICBMs aimed at American cities reposing in Iraqi missile silos.
There also didn’t have to be a hegemonistic Saddam running or bullying the Arab nations. An intelligent policy would have been to contain the bastard to his own realm. This would have been an incredibly easy and low-cost policy to implement, because we had already implemented it — most of his army was destroyed, what was left of his air force was parked in Iraq, we controlled the airspace to the point where he couldn’t commute to work in a helicopter in his own capital city, and his activities were limited to small-scale domestic murders — a few hundred villagers here, a few hundred there, a few political opponents being tortured. Not a country I would want to live in, but manageable in terms of our interests, and it was completely stupid to rip the scab off that minor sore and unleash the mayhem that came boiling out.
Stupid, stupid, stupid. That’s the only way you can characterize the Republican policy that transformed an irritating little tinpot dictator into a major humanitarian and military problem. It was analogous to shooting the governor of Nevada so Cliven Bundy and his militia could take over. No, wait, it was MUCH worse than that! How could anyone be so stupid?
Well, because they’re Republicans, that’s why. Republicans are just plain stupid. Not in any ordinary sense, but in the sense they’re people who put stupidity on a pedestal and worship it. Sarah Palin understands this. She knew perfectly well how to pander to Republican voters — you must pretend to be a dummy who doesn’t know where Russia is, and clowns for TV cameras in a selfie featuring a guy in the background shoving turkeys head-first into a machine that grinds their heads off. Republican voters insist on similar willful stupidity in their leaders. By hook and crook, they inflicted such a leader on us, and that’s how we got 4,000-plus American dead, a trillion-plus dollars up in battlefield smoke, hundreds of thousands of Iraqi dead, and a gang of medieval Anti-Crusaders who now must be bombed by our planes to prevent them from cutting off the heads of Christians who are now abandoning their homes and running for their lives.
If you vote for Republicans, you are one stupid fucker, and their blood is on your hands.
correction @12: should read “what was left of his air force was parked in Iran, …”
12
Actually, I voted with write-in choices for the presidential elections of 2008 $ 2012.
Frer Lapin –unless every franchisee opens their books we have no idea how much money they make. why should we take any hardship claims seriously when franchisees keep their books secret? if they TRULY thought the MW law gave a hugeass advantage to nonprofit business, they’d go open bill’s sandwich shop but no, they don’t do that. hmm. probably in terms of threat to their business, the growing concern for healthy authentic organic food or at least food that doesn’t taste like CRAP is a greater threat than going to all of $11 an hour in a few months. they chose to sell a food “product” as part of a near industrialized system, tough. they see it kind of like a gas station or car wash business — get a good location, there’s not that much all to manage, then turn the mill, make revenue, make profit. if they want to be a real small business, they want to open a Roux restaurant or whatever, no one is stopping them. if they want to sue us for making a MW law treating them as big business, ti say we should boycott them — who needs this standardized bland corporatized food product crap anyway?
Low information voting DUMMOCRETINS!
@16 Puddy, if a few more of your Dummycretins in Florida had voted for Al Gore instead of Ralph Nader, the Iraq tragedies would never have happened.
Elections do have consequences.
“Puddy, if a few more of your Dummycretins in Florida had voted for Al Gore instead of Ralph Nader, the Iraq tragedies would never have happened.”
They did win in Florida. The actual answer is that Democrats have to win by a big enough majority so that the election fraud of the Republicans can be so easily exposed that the MSM would have to cover it.
@18 Nationwide, the Democrats need an extra cushion of at least 3 or 4 million votes just to offset Republican voter suppression, dirty tricks, and fraud. When you take that factor into consideration, it has been a very long time since any Republican actually won a popular majority.
@14 In other words, you didn’t vote.
@15 “in terms of threat to their business, the growing concern for healthy authentic organic food or at least food that doesn’t taste like CRAP is a greater threat than going to all of $11 an hour in a few months.”
Absolutely. Changing consumer tastes are a HUGE threat to the long-established fast-food chains; and not only to them, but also to numerous other companies, including such corporate behemoths as Coca Cola, Pepsi, General Mills, and Kellogg. All of these companies are struggling with declining sales of their flagship products. Where are Polaroid and Kodak today? Huge size is no protection against becoming a dinosaur. Companies that don’t keep up with the times disappear, no matter how big and dominating they once were. A growing cohort of Americans is fed up with crappy products, crappy service, and monopoly prices. All the traditional fast-food chains are in danger of market obsolescence, and the biggest of them all, McDonalds, is most in danger.
Full Disclosure: Roger Rabbit owns McDonalds, Coca Cola, and Kellogg stock. Even geriatric cows give milk.
20
No, I voted for the person I want each time. There’s no reason to be limited to candidates who have a massive party apparatus behind them. Diversity is good. Why be limited to only two choices?
But keep in mind that the McDonalds parent corporation doesn’t sell Happy Meals, it sells restaurants. More precisely, it leases them. McDonalds makes the bulk (over two-thirds) of its profits from franchise fees. Thus, recruiting franchisees who are willing and able to pony up a million dollars to become indentured servants is a major focus of the parent company’s business model. (As a McDonalds shareholder, I’ve educated myself about where my dividends come from, and the likelihood of them continuing to come.) Sorta like the Arkansas chicken farmers who borrow $500,000 in order to work 70 hours a week to make $20,000 a year; except the typical McDonalds franchisee does considerably better than the typical chicken farmer income-wise. It’s probably true most McDonalds franchisees live better than most of the rest of us; if you have $1 million of investable funds, it’s hard not to. Even at today’s somewhat inflated stock prices, you can readily assemble a collection of stocks with a portfolio yield of at least 3%, which means $1 million invested in stocks will give you as much income as a 40-hour-a-week job at $15 an hour, without doing any work, and with no commuting, no work expenses, and no boss hassles. Plus, investors and business owners get fabulous tax breaks — no FICA taxes, low tax rates on capital gains and dividends, and juicy deductions and tax credits — that workers never see. It’s almost impossible to have a million dollars and be poor at the same time (unless you’re an Arkansas chicken farmer who paid half a million to a million dollars to buy a job in which poverty wages are guaranteed). It’s ALWAYS better to be a capitalist than a worker.
I understand why people opt in for McDonalds franchises. Most of them make more than decent money, and I didn’t say or imply otherwise in my previous post on this subject. The point I tried to make is these franchisees operate a volume-based business on fairly thin margins and when they crunch numbers they don’t see a lot of room for wage raises or other cost increases in their ledgers, so it’s inevitable that these people are going to react emotionally to any campaign to raise the minimum wage. But, as I also pointed out in my previous post, a higher minimum wage pays for itself to some extent by reducing turnover, recruitment, and training costs; so the situation posed by a $15 wage is not as dire for these business owners as some of them try to make out.
As for raising chickens for Tyson in Arkansas, I don’t understand why anyone does it. It must be a cultural thing, because there’s no money or job security in it. Tyson makes you take out a huge mortgage to pay for facilities to their specifications, but doesn’t give you a long-term contract. They drop off a consignment of chicks, and six weeks later they pick up the chickens. Your contract is just for that one consignment. They don’t have to give you another load of chicks; they can terminate your business relationship with them any time they want to. It’s like having to reapply for your job eight times a year, with no assurance of being rehired. You do all the work and shoulder all of the business risks; the bankers and the big corporation take all of the profits. You have to be awfully obstinate to sell yourself into that kind of slavery. But the hicks, for some strange reason, do it.
Then they turn around and vote Republican to make sure they’ll have no Social Security, no Medicare, no Obamacare, no public schools or universities for their kids to attend, no parks or libraries for their families to use, no regulation of the vultures who manage their bank accounts and retirement savings for them, no nothing. As I said, it must be a cultural thing, because it sure doesn’t make any damn sense.
@22 If you vote for a third-party candidate, your vote won’t matter. All you’re doing is making a statement — a protest, if you will, against the major party duopoly and/or their candidates. Fine, do that, but if you don’t vote for either the Republican or the Democrat, you’re effectively abstaining because no one else has any chance to win. I’m not saying I like this system; that’s just the way it is.
But then nothing will ever change.
@25 Yes, things have changed. We have a black president now, and we may soon have a woman president. We got out of Iraq, and we’re getting out of Afghanistan. We’ve stopped torturing people. Our economy was saved from the brink and is now recovering. We have a health care reform law in place and being implemented, and medical bankruptcy is no longer the huge threat to American families that it recently was. Our Social Security hasn’t been privatized and turned over to Wall Street. The presidential and congressional candidates I voted for in 2008 and 2012 won, and it has made a huge difference. I voted for change, America got change, and I have hope now. I look back on 1980 – 2008 as a Dark Ages for our country and the vast majority of its people. Sarah Palin asks us, “How’s that hopey-changy thing working for you?” My answer is, “Just fine, and much better than the alternative.” It matters whether you vote for Democrats, for Republicans, or throw your vote away on a third-party candidate who has no chance of being elected. I choose to participate in choosing America’s future. What you do is your business.
And what you do is YOUR business.
One thing I like about mail-in voting is that I can cast my ballot weeks before the election. Then I can watch the campaigning still going on, knowing that it is a moot point, as far as I’m concerned.
We have nobody to blame for the turmoil in the Middle East, except ourselves. The West, with its incessant meddling, is the root clause of Islamic extremism. Just as the corruption and tyranny of the Roman Church led to the Protestant Reformation, so, too, has Western interference and bullying led to the situation in the Middle East.
@29 Bullshit. America and its entire population could vanish from the face of the earth (Raptured up, or kidnapped by UFOs, or wiped out by Ebola, or whatever), and Israelis and Palestinians would still fight. Shiites and Sunnis would still go for each other’s throats. Kurd insurgents would continue to fight for an independent Kurdistan. Egyptians and Libyans and Tunisians would still fight among themselves — over power, money, oil, camels, and women. We didn’t create that mess, we didn’t cause that mayhem, and we don’t keep it going. The British have more culpability than we do, due to their colonial impositions on the region, but ultimately those people fight with each other because it’s what they choose to do.
Jack, you don’t know jack shit about anything.
I see that low self esteem is not a problem for you, Roger.
30
When I say the West is responsible, I include the Brits and others in that group, not just Americans. You said it yourself in a previous post about the creation of Iraq as the British Empire waned after the end of WWI. Of course, when it comes to Iran, we DEFINITELY had a hand in the creation of that mess, helping the Brits maintain their control over Iran’s oil. Just give “Argo” a viewing, Roger. The lead-in to the story does a pretty good synopsis how the Islamic Revolution of 1979 came about.
Yes, I’ve believed for some time that our best strategy in the Middle East is to simply withdraw and let those who live their continue to fight among themselves. We don’t need to be there because we’ve helped make it into a mess.
@33 You get what you “know” about history from movies?
At last there’s hope that greedy businessmen who literally kill innocent people for the sake of profits may go to prison for it.
http://www.aol.com/article/201.....d=webmail1
33
No, I get my history by reading, watching and listening to many sources. The “Argo” reference was just a convenient way to remind everyone that our very own CIA was involved in the overthrow of a democratically-elected prime minister of Iran, who wanted to control his country’s resources rather than being exploited by the British and American petroleum interests.
@33 “Argo” was scripted to entertain. It takes major liberties with history. It’s not very instructive about anything other than how to write a story and shoot a film that keeps audiences on the edge of their seats. Pass the popcorn, please.