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The SEIU Petitions the FTC to Investigate the ‘Abusive and Predatory’ Franchise Industry

May 26, 2015

By Kate Taylor

The Service Employees International Union is redoubling its efforts against the franchise industry from a pro-franchisee front.

On Monday, the SEIU petitioned the Federal Trade Commission to launch an investigation into the franchise industry, citing an imbalance of power that vastly favors franchisors over franchisees.

“The relationship between big corporations like McDonald’s and their franchisees can best be described in two words: abusive and predatory,” Scott Courtney, assistant to the president of the SEIU, said in a press call regarding the petition.

The SEIU points to a number of franchisor practices that can potentially hurt franchisees while boosting corporate profits. These include franchisors providing incomplete or misleading financial information to potential franchisees, demanding unreasonable spending when it comes time to renew franchise agreements and arbitrarily denying franchisees’ requests to sell or transfer their businesses. The union also said that franchisees feared retaliation from their franchisors if they joined franchisee associations and unpredictable termination or non-renewal of franchise agreements.

The press call also served to highlight negative experiences of current and past McDonald’s and 7-Eleven franchisees who felt their hard work had been taken advantage of by franchisors… READ THE FULL STORY HERE!

 

 

Originally posted: http://www.entrepreneur.com/article/246373