At the annual gathering of DDIFO, an independent franchisee association for Dunkin’ Donut franchise owners, well-known attorney Robert Zarco of Zarco Einhorn Salkowski Brito took the stage and gave a speech that some would consider heresy. As first reported by Scott Van Voorhis on Blue MauMau, Zarco explained how the National Labor Relations Board’s decision, which found that Browning-Ferris Industries is a joint employer with a company that provided staffers for one of its recycling centers, is not the start of the apocalypse as so many franchisees believe. In fact, Zarco suggested to his audience that the decision could be the “greatest benefit you guys ever had.” Mr. Zarco’s opinion mirrors the view of AAFD Chairman, Robert Purvin, who has been advising franchisees to use the NLRB position to push for renegotiated franchise agreements that empower franchisee ownership in rights in a manner that would not trigger a ‘joint employer’ claim.
According to the Blue Mau Mau article, Zarco explained that the Brown-Ferris decision actually reveals a considerable vulnerability in most franchise agreements that give franchisors too much power over their franchisees. This uneven power dynamic can leave the franchisor open to considerable vulnerability now that the Browning-Ferris decision has indicated that such a controlling franchisor might be considered a joint employer.
“Franchisors, many of them have crossed the line,” the Blue Mau Mau article quotes Zarco as saying. “They have crossed the line from giving you guidance and recommendations and suggestions to dictating, mandating and requiring what you should do as an independent business owner.”
Time for a New Franchise Agreement
A franchisor’s vulnerability could be a franchisee’s gain, Zarco argued to DDIFO. He suggests that franchisees may now have the legal backing to re-negotiate their franchise agreements to take back more control over their businesses. “You can use this time, this law, as a bargaining chip to change your contract,” Zarco said.
Ironically, franchisors and other interest groups have been very good about convincing franchisees (most of whom have not actually read the Browing-Ferris decision) that the decision could spell doom for franchising as an industry. They are actively recruiting franchisees to fight against the decision.
We Couldn’t Agree More!
Robert Purvin, Chairman and CEO of the AAFD, agrees with Robert Zarco’s interpretation of the Browning-Ferris decision. Like Zarco, we believe that this decision represents a watershed opportunity for franchisees to take back many of the rights that have slowly been eroded out of franchise agreements over the last five decades.
We encourage franchisees to use the ruling of the National Labor Relations Board to actively reach out to their franchisors to renegotiate their franchise agreements. The time for Total Quality Franchising is now!
(Read Blue MauMau’s full article on Robert Zarco’s talk to the DDIFO.)