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As minimum wage rises, franchises face new challenges

Anyone in Atlanta knows that being a business owner is not without its challenges, especially when it comes to employees. In some cases, the legal matter may have been generated from an employee while in others, it may be the establishment of a new law from the state or city that will affect the employer's relationship with the employee. Even franchise owners are not immune to such issues and they might even be at a larger disadvantage given their much smaller size.

Many states have begun to pass laws that raise the minimum wage to $15, giving businesses a limited amount of time in which to implement the change. In Seattle, Washington, employers with an employee staff of over 500 must make the adjustment over a three to four-year period. The city extended that timeframe to seven years for companies under that size. However, many franchises claim that the seven-year period is unfair, given their much smaller employee base.

Citing that the city's ordinance is harmful to franchise owners and discriminatory, the International Franchise Association along with five franchises recently took their claim to the U.S. Supreme Court. However, they will now need to carefully evaluate their next step as the high court has refused to hear the case. This could leave the more than 600 franchises in Seattle with little choice but to comply with the new law.

Franchises are a popular way for people to become a business owner, rather than growing a company from scratch. However, there are many issues and legal matters that can rise concerning this type of business venture. In such cases, it may be a good idea for people to meet with an experienced attorney.

Source: PBS NewsHour, "Justices reject franchise appeal over Seattle's $15 minimum wage," May 2, 2016

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