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A small business by any other name is still a small business

  • entrepreneurs
  • Franchising and Franchisees
  • legislation
  • small business

One of the great rewards of creating a franchise such as Edible Arrangements® is that it has given so many people the opportunity to go into business for themselves, and chase their own version of the American Dream. In some areas of the country, however, that dream is under attack.

From the outside, a chain such as Edible Arrangements appears to be a large global operation, whose reach extends around the world. In reality, however, the Edible Arrangements franchise network is made up of hundreds of small business owners.

That’s why it was disturbing to learn about recent action by the city council in Seattle as well as legislation currently under consideration in other cities to treat individual franchisees as large, national brands and not locally-owned small businesses.

The issue has been raised as part of local laws related to increasing the minimum wage. The potential danger, however, really has nothing to do with raising the minimum wage. It’s one thing for everyone — big business and small — to be paying a higher rate, but being forced to pay a higher rate without requiring the same of non-franchised small businesses creates a lopsided playing field that could destroy franchisees. It gives other small business owners an unfair advantage. Franchisees are being punished simply because they chose to operate their small businesses as a franchise.

There are obvious benefits of purchasing a franchise rather than going it alone, of course. We provide guidance and training to help franchisees avoid making the same mistakes I made when I was starting my own small businesses. And there is the brand awareness and marketing support that comes with being a part of a national chain. For this support, however, franchisees are required to pay royalties.

The fact is that when they unlock their doors each day, our franchisees are the ones on the front line, competing against other small businesses in their market. They are the ones that ultimately determine their success.

As one Seattle franchisee told local media, “It’s insulting to suggest that I am not my own boss.”

The International Franchise Association (IFA) is trying to help Seattle franchisees convince the city council to treat franchises as small businesses. I have no doubt that if the Seattle ordinance remains unchanged and similar ordinances are implemented nationwide, it will put many franchisees out of business and could also severely damage a franchise business model that has been responsible for creating small business opportunities for millions of Americans.

It’s tough enough being a small business owner. Hopefully, leaders in Seattle and other cities considering similar legislation will not make it any tougher.

 

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