Robert L. Purvin, Jr., Chair of the Board of Trustees
Several AAFD members have reached out to the AAFD for guidance on our position on President Biden’s nomination of Professor David Weil to again serve as the Administrator of the Wage and Hour Division of the Department of Labor (DOL). Weil held this position previously in the Obama administration and he created controversy by announcing that franchisors that exert excessive control over their franchise networks may be classified as joint employers of franchisee employees.
Some of our members have been urged by their franchisors to oppose this nomination under guidance of the International Franchise Association (IFA) and the Coalition of Franchisee Associations (CFA) who have claimed that Professor Weil is anti-franchising as well as pro-union. While the AAFD has not taken a formal position on this nomination, I am personally supporting Professor Weil, as I have long argued that oppressive control by many franchisors have crossed a line to be able to claim an independent contractor relationship.
In fact, Professor Weil is a strong supporter of protecting franchisee rights and fighting against the very oppressive control exercised by many franchisors that have led to the formation of franchisee associations and AAFD chapters. I fear the other organizations have misunderstood Weil’s positions regarding franchisee rights and have perhaps ‘bought’ the IFA line that he is anti-franchisor. Weil is only a threat to those franchisors who have so ‘encroached’ franchisee rights and equity as to blur (or eradicate!) the line between independent contractor and ‘indentured’ servant.
Weil’s concept of the ‘fissured workplace’ that focuses on ‘gig economy’ workers like Uber drivers and other groups that are historically protected as employees closely mirrors the argument I made in my book, “The Franchise Fraud: How to Protect Yourself Before and After You Invest.” The premise of my book was that modern franchise agreements so totally control franchisee operations as to cease to be business ownership. Weil similarly claims that franchisors that unduly control franchisee operations should be deemed to be ‘joint employers’ of the franchisee’s employees. The good news is that is that the threat of ‘joint employer’ classification should put pressure on franchisors to extend franchisee authority, equity, and discretion, as well as to encourage the negotiating leverage of franchisee associations.
Weil has made clear that a traditional franchise wherein a franchisee retains vital rights and authority should have no fear or threat of a joint employer classification. In this regard, Weil is a great friend of franchisees, and his appointment will place valuable pressure and influence on franchisors to dial back excessive controls—and hopefully be more accepting of negotiating franchise agreements with owners’ associations.
While I understand member concerns that Weil is likely pro-union, we need to recognize that the Biden administration is staunchly ‘pro-union’ and any nominee put forward will be an advocate of expanding unions. However, having a voice who will champion franchisee rights will be a refreshing plus that can support franchisee advocates’ efforts to claw back against excessive franchisor controls. In this regard, the AAFD has been pleased to support franchisee protective legislation advanced by pro-union legislators, and we have tried to carefully navigate and distinguish between issues we support and those that we deem problematic.
Similarly, the AAFD has endorsed FTC commissioner nominees that have embraced franchisee rights even though their ‘pro-consumer’ policies may negatively impact franchisees.
We will continue to reach out to franchisee leaders and engage in conversations that can lead to our finding common ground in our joint efforts to support the rights and success of owners of franchised small businesses.