Franchisees Plan to Sue Over Seattle’s Minimum Wage Raise

Workers around the country struggling to make ends meet rejoiced at the unanimous approval of Seattle’s decision to raise its minimum wage to $15 an hour.

However, Seattle’s small business owners are less thrilled. And one particular group of small business owners — those who own a franchise — are planning to take action through their trade organization.

According to a June 3 Forbes article, the International Franchise Association plans to sue the city of Seattle to challenge the law that raised the minimum wage, claiming the law unfairly discriminates against franchisees.

Under the law, Seattle will require big businesses to implement the $15 minimum wage in three years, while small business owners have seven years to increase their wages.

The catch? Seattle’s law considers franchisees as big businesses, even if the franchises are local and independently-run.

In a statement, International Franchise Association President and CEO Steve Caldeira said:

“These hundreds of franchise small business owners are being punished simply because they chose to operate as franchisees. Decades of legal precedent have held that franchise businesses are independently-owned businesses and are not operated by the brand’s corporate headquarters.”

While many small business owners have recognized that it’s nearly impossible to live off the federal minimum wage, it’s also tough on a business to pay all employees $15 an hour, especially when small businesses face tough competition and an unpredictable market, according to a Small Business Trends article.

Currently, it’s too early to see if the International Franchise Association’s lawsuit against the city of Seattle will change the law, let alone strike it down. But the lawsuit marks an important step in recognizing how the city’s minimum wage law affects small businesses of all kinds.