"Obama, We Deserve a Break Today!" - McDonald's

Obama with AFL-CIO Union Pres. Dick TrumpkaJust when you think Obama is done tearing down all of the
  basic structures within this country, now you can also count on your Big Mac cheeseburgers, crispy Chicken McNuggetts, French fries and sodas costing more money to buy--just "Look for the Union label" on your check!

The National  Labor Relations Board, NLRB, begins an attack on the franchising business model. The franchiser/franchisee relationship is built upon a division of roles and responsibilities. Due to this unique system in which the franchiser licenses its exclusive brand, the franchisee operates as an independent business at one or more locations.

Generally, after an initial licensing fee, a royalty off the top-line or gross sales is levied to compensate the franchiser, not a share of the franchisee profits. It is up to the franchisee who generates the bottom line, the net profits, to determine how efficiently he manages his direct and indirect costs. These can either make or break a business start-up and possibly discourage a business investment before it is even started. So what would cause those actions?

Since a tremendously large group of franchisees are in the 'fast food' industry, the obvious overhead costs are the building lease and improvements, equipment, furniture, packaging supplies, uniforms and of course, the food and beverage provisioner. All of these items affect the bottom line, but they remain fairly consistent predictable percentages at fluctuating sales volumes. The truly onerous outlier cost is labor. The ability to balance the personnel levels with the proper service levels for consistent customer satisfaction is paramount to maximizing profits while assuring return patronage. 

Currently franchisees choose who they hire, how many are hired, their wages and benefits, their training, the labor practices as union or non-union employees, how to conduct employee evaluations for decisions on promotion, discipline or separation. Franchisers are not directly involved in any personnel decisions in practice nor do they have the contractual authority. The franchisees act in daily operations, under legal terms, as solely independent small businesses.

McDonalds received a devastating decision this week which may affect all franchiser/franchisee relations.

The National Labor Relations Board, NLRB, ruled that McDonald's could be treated in labor complaints as a joint employer of its franchisee workers which affects every small business owner. Now, the franchiser would have to monitor and review all franchisee labor decisions which would add cost to the franchisee.

NOTE: Up to now, this labor mechanism is what makes or breaks the franchisee since the franchiser takes his cut from the top gross sales figures; so then after labor costs are deducted, the franchisee takes his cut or income from the bottom line net profit.

By U.S. government agency fiat the franchisers find themselves unable to now control their increased overhead costs of their added labor management oversight unless by lowering employee wages to create any net profits for the franchisee. The lower wages invites in union organizers to strike for higher worker wages as unions have always dreamed of unionizing restaurant workers nationwide.

The current AFL-CIO union membership is 12 Million and shrinking while desperate for any new blood. All federal, state and local fair labor practices and laws are in effect now, not like in the old days that the unions once battled--those fights are over. The old unionization days are in the past for many experienced workers today that see no future in paying dues as free market pricing and labor wages have reached parity with competitive employment to bid up income with benefits to acceptable levels. 

The big downside is many franchisee businesses with entry low-level jobs will become unprofitable due to union wage hikes and Obamacare as jobs are cut back or lost as they shut down as unskilled workers will be hurt by NRLB regulations.

The AFL-CIO and Obama have the most to gain with added union membership dues and contributions. Historically union members overwhelmingly vote a democrat ticket, so dues are disproportionately directed into the democrat party political fundraising coffers. 

The Dues Scam: The dues monies are profits unjustly fleeced from the pockets of the small business owners, paid to the union members as higher taxable wages, paid to the union as membership dues and paid to the Democrat National Committee, DNC party machine as political contributions. Note: Employee wages are subject to any local, state and federal taxes and the Democrat political contributions are non-taxable donations to DNC. They pay NO taxes for the dues money.