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Two Years Ago, This Ruling Rocked Franchising To Its Core. Now Everything May Change Again.

Who's the boss, really?

This story appears in the January 2017 issue of Entrepreneur. Subscribe »

In 2014, all hell broke loose in the franchising world. The National Labor Relations Board (NLRB) has a group called the Division of Advice, whose job is to suggest what actions the NLRB should take -- and it had recommended that McDonald’s be considered a co-employer of its franchisees’ workers, when it came to violations of federal labor laws. In other words: The McDonald’s corporation would be at least partially responsible for its franchisees’ employees. At the time, no one was sure whether the NLRB, which monitors labor disputes in the U.S., would adopt or ignore the opinion. So as notices and commentaries filled the pages of business publications, the franchise world kept a watchful eye on the situation, and continued grilling burgers and changing oil. 

Tampa Bay Times/ZUMA wire
Small-business advocates defend the franchise system outside the National Labor Relations Board office in Tampa, Fla.

But then, in December of that year, the NLRB filed 86 charges against a McDonald’s franchisee for unfair-labor practices and named McDonald’s corporation as a joint employer with joint liability. 

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