When I first spoke with my franchise attorney about writing this article, he told me not to. He was concerned that by sharing what we are doing to protect ourselves from being deemed a joint employer of our franchisees' employees, I would be putting a target on our brand; the last thing we want is to draw the attention of the National Labor Relations Board or the U.S. Department of Labor (DOL). As a result, this article is submitted without my name and the name of my franchise brand has been changed to a fake brand named "SuperDuperBrand."
I have been in franchising for over two decades. I have worked for four different franchising companies. All four were business format franchisors that provided a strong brand, operating procedures, marketing, tools, training, and resources to help their franchisees optimize their success. None of these four companies ever exercised any control over their franchisees' employees.
As a CEO focused on supporting franchisees to provide them the best brand, operating systems, marketing, training, tools, and support, I have had to modify what we do and how we provide service and support due to the NLRB and DOL expanding the definition of joint employer.
Our first "wave of changes" occurred in 2014 when the franchising community learned that NLRB was considering expanding the definition of joint employment. My company--like most franchisors--took actions to further ensure that we would not be deemed a joint employer. These changes included modifying our franchise agreement; modifying our operations manual, especially in regards to staffing models to make it clear that such models or guidance were recommendations/best practices rather than directives; drastically reducing training of franchisees on employment and HR matters; adding disclaimers to many documents; changing the "Job Posting" section of the brand website to clearly delineate what is an open position with the franchisor versus franchisees; removing the company logo from the template employee policy manual and job application artwork; and, providing repeated training for all franchisee-facing employees to ensure that they not get involved in any employment/HR advice or support for franchisees. We also required that the "Independently Owned and Operated" disclaimer was not only on the front door of each franchised outlet but also on the customer-facing side of the point-of-sale system and on franchisees' business cards. Finally, we made this disclaimer larger and more prominent on all franchisees' websites.
Then, in August 2015, NLRB expanded the definition of joint employer in a decision in the Browning-Ferris case. For...