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Read the AAFD’s Comment to the NLRB’s Joint Employer Criteria

Posted on Date: Mar 8, 2019


To all AAFD Members and Subscribers:

We thought you would appreciate knowing that AAFD Chairman, Robert Purvin, has submitted a public comment to the National Labor Relations Board (NLRB) regarding the AAFD’s position and recommendations for the NLRB’s criteria and standards for determining when a franchisor’s control over its franchisees would result in a finding that the franchisor is the ‘joint employer’ of the franchisee’s employees.

Purvin’s public comment stated that AAFD members share their franchisors’ aversion to being determined to be the joint employer of franchisee employees. The AAFD believes that many franchisors exercise too much direct economic control over their franchisees. This control eviscerates franchisee equity in their businesses (their rights to control labor costs, material and inventory costs, equipment costs, costs of their locations and facilities, and even the right to control their bank accounts). The AAFD believes that the NLRB’s criteria should be centered on these issues, which have long been pivotal for the US Small Business Administration in denying small business loans to franchisees who are excessively controlled by their franchisors.

Purvin’s comment rebutted the comment offered by the International Franchise Association (IFA) which represents franchisors. The IFA suggests that the NLRB joint employer rule inhibits a franchisor’s ability to provide services and training to franchisees. The AAFD strongly disagrees that the NLRB’s criteria should include a franchisor’s rights to enforce system standards and offer services and training to franchisees. A franchise system tied to a franchisor’s trademarks is fundamental to franchising, even though such enforcement might indirectly impact a franchisor’s control of its franchise network. The AAFD offers its Franchisee Bill of Rights as providing the correct standard for determining if a franchisor exercises excessive control.

Read the AAFD’s full comment to the NLRB.


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