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Franchise model may soon be redefined

Georgia is considered one of the best states to do business in. This is because many business owners and lawmakers alike are passionate about the support and growth of small businesses. However, after a recent federal decision, some are concerned about the future of franchising and what it might mean for local businesses.

The National Labor Relations Board, known as NLRB, has done work that might soon change the basic foundations of the franchise model. It is attempting to define franchises as one large company, but Georgia lawmakers are fighting against this by declaring that franchises are all individual entities.

The NLRB states that they are attempting to make this change in order to protect the rights of workers. By clarifying that the parent company can be held responsible for what its franchise counterparts do, they believe that workers will have more rights when it comes to issues like wage disputes.

However, Georgia businesses and lawmakers alike argue that this type of legislation does not work to further the protection of small businesses or its employees. They believe that it might damage the local economies and change the business model in a negative way, making it more difficult for employers and halt the growth of smaller businesses. Some praise Georgia for the stance that it has taken against the NLRB’s legislation, stating that it is a “critically important” step in protecting the current franchise system and culture.

Dealing with the legal standings on both a state or federal level can make your business climb a bit complex. If you are considering starting a franchise, you may wish to consult with a lawyer to look at your options.

Source: The Daily Caller, “Georgia Fights Feds To Save The Franchise Model,” Connor D. Wolf, May 4, 2016

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