AUBURN – U.S. Rep.-elect Frank Guinta promised on Tuesday to work with franchise owners in New Hampshire to counter an expected final decision by the National Labor Relations Board that the business owners say will severely restrict their ability to run their businesses in the best interest of their customers and their employees.
Guinta, following a discussion at Visiting Angels, a senior, elder and respite care franchise, said he is concerned about the NLRB decision in a case that directly involves McDonald’s restaurant franchises but franchise owners fear could set a precedent for franchises of all businesses.
Guinta said the anticipated decision “fundamentally changes the relationship” between franchises and their corporate partners.
Based on a preliminary decision handed down last July, it would make the corporate entities in effect “co-employers” with franchisees. The meeting and news conference in Auburn was part of a nationwide effort led by the International Franchise Association’s Franchise Action Network.
While supporters of the decision say it would counter “the low-wage franchise model,” Guinta said, “It will certainly have a negative impact. It will take away the authority of the small business owner here in New Hampshire to effectively run their business.”
Guinta said 90 percent of the New Hampshire economy is driven by small business, “franchisees represent about 40,000 employees and is a $3.8 billion economic impact in the state. That’s something we can’t afford to lose.”
Participating in the discussion was state Republican National Committeeman Steve Duprey, the owner of four hotels in Concord – three of which is affiliated with Marriott and one with Choice Hotels.
Duprey said when he opened the Comfort Inn in Concord 26 years ago, hotels and motels in the state were independently-owned and were not franchises.
He said that by becoming a franchise, “I got a great name, I got an ‘800’ number and when I put my money into marketing, it is pooled with others to get that national brand. And they sort of taught me brand standards – here’s how clean your rooms should be, here’s the food you have to serve, all the things I didn’t know.
“But not once in 26 years has Choice Hotels ever talked to me about how many people I employ, what do I pay them, what are the benefits, what are the job descriptions,” Duprey said. “I’ve been able to make those decisions for 26 years, and if an employee is unhappy, we can deal with that. That is the essence of a small business.
“But my labor costs are the single largest cost of doing business,” he said. “And if all of a sudden the real employer is the corporate parent and they are dictating to us, then who’s running the business? If I can’t control that cost, how will I ever run the business and how will I make a profit?”
Duprey said that if he suddenly becomes “subject to a collective bargaining agreement that’s negotiated in Washington with a corporate parent, and I can’t control my cost, I might as well not be in business. I think it end that way of doing business.”
Duprey said he has more than 200 employees whose jobs will be at risk if the decision is finalize and not addressed by congressional action.
“This is not intended to be anti-union,” Duprey said. “There are unions that have done tremendous things for men and women, and there are situations where they can make a real difference, but when you take the control of doing business away from the local business person and put it on the corporate parent, that will fundamentally affect how we do business.”
The decision “will make it easier for a union to negotiate an agreement with a corporate entity that would then be applied to everyone,” he said.
Guinta said the NLRB decision “would fundamentally change Steve Duprey’s business model to the point where he probably would not be in business anymore.”
Visiting Angels of Auburn co-owner Debra Desrosiers said if she and other Visiting Angels franchise owners lose control over the hiring and credentialing of employees, “that’s going to affect the care of families in New Hampshire. Our costs are going to go up and we are going to lose the local control of getting to know each employee.
“The control of our employees is very important for our industry,” she said. “We are already heavily regulated by the health care industry.”
Louise Murphy, owner of the Visiting Angels office in Nashua, said that access to the national Visiting Angels brand “allows us to focus our time on helping our employees and focusing on our clients, who are an at-risk group of people. We don’t want to send just anybody into a home.
“If you eliminate the franchise system, which provides guidance on how employees are screened, “you are going to to have some maybe not so savory characters going into elderly homes.”
Franchises in the state and throughout the country “are really trying to fight for the right to run their own businesses,” Guinta said.
He said that to counter the anticipated decision, “There is either a legislative solution or a solution through the appropriations process, which starts early next year. Once the decision is public, I’ll get engaged to try to provide the autonomy to the franchisees they’ve enjoyed for so many years.”