Union Requests FTC Probe of Franchisor Practices

Petition claims that franchisors, including McDonald’s and 7-Eleven, promote harmful practices.

May 20, 2015

WASHINGTON – The Service Employees International Union (SEIU) announced this week that it plans to petition the Federal Trade Commission (FTC) to investigate alleged abusive practices by major franchisors, including McDonald's and 7-Eleven. According to news sources, the petition outlined six U.S. franchisor practices it said appeared endemic and "particularly harmful.''

The SEIU, which has about 2 million members and has been backing a lengthy campaign to improve the plight of low-wage retail and fast-food workers, said those practices include incomplete or misleading financial performance representations, unreasonable capital expenditure demands, retaliation against members of independent franchisee organizations, unfair termination, unfair nonrenewal, and interference with transfers or sales.

This action comes on the heels of a potentially landmark ruling affecting franchisors as a National Labor Relations Board (NLRB) administrative law judge weighs whether McDonald’s Corporation should be responsible for poor working conditions and low pay at its franchise restaurants. If the judge rules affirmatively, it would mark the first time that a major franchisor would be found culpable for labor violations at individual chains. This follows a finding last year by the NLRB’s lead attorney that McDonald’s should be treated as a “joint employer.”

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