Legislation could add to regulations, costs for fast-food franchises
Matt Haller, president and CEO of the International Franchise Association (IFA), continues to sound the alarm regarding the FAST Act, aka California Assembly Bill 257. The proposal was narrowly defeated during the state’s last legislative session but is expected to be introduced to the state’s assembly again this year.
If the FAST Act were to become state law, it would lead to creation of an appointed – not elected – body called the Fast Food Sector Council. Under the legislation, this council has the authority to establish new workplace policies in California’s fast-food restaurants and create joint liability between franchisors and their California-based franchisees.
In rallying opposition to the bill in a Capitol Weekly editorial, Haller writes that:
- The FAST Act, sponsored by the Service Employees International Union (SEIU), would replace existing labor laws with rules put in place and enforced by 11 political appointees to the Fast Food Sector Council.
- The legislation would create a second layer of local unelected councils in cities larger than 200,000 residents.
- It requires franchisors to strip franchisees of autonomy thus changes the status of franchisees from independent business owners to corporate middle managers.
Haller also points out that many restaurants already are on shaky ground because of the pandemic, which has led to a decline in indoor dining because of the perception that it is risky, plus laws/ordinances (mask mandates, employee Covid-19 testing requirements, etc.) that have heightened operational challenges for restaurant owners as compared to 2019 and previous years. Other exacerbating factors include an increase in food prices, supply-chain disruptions and a labor shortage.
The editorial by Haller further says that the FAST Act puts franchises “under attack” and expresses his belief that the FAST Act’s regulatory changes affecting fast-food restaurants – many of them franchises, of course – will open the door to new regulations in other segments of the franchise industry. Haller’s editorial emphasizes that franchising is a proven route to business success and that franchisees bring economic benefits to their communities in ways such as creating jobs, paying taxes, and supporting local civic organizations and charities.
Through lobbying efforts by the IFA and the grassroots efforts it has inspired, leaders of the franchise industry such as Haller hope they can persuade California lawmakers to vote down the bill for a fourth time.