The franchise model, whereby a brand and business are developed by a franchisor and a franchisee pays for the right to distribute products and services based on the model, is a time-honored way of achieving success.
From auto repair (Meineke Car Care Centers) to childcare (Kiddie Academy), the franchise model meets the needs of a community with a known and trusted brand.
Less acknowledged but equally important, local franchisees deliver a large share of economic benefits to their nearby community.
Local franchisees pay taxes and fees and support countless civic organizations. Franchisees are also known to give women, members of the LGBTQ+ community, new immigrants, and people of color unprecedented business-owning opportunities (60% of California restaurants are owned by people of color).
Nationally, approximately 7.5 million people work for a franchised business. Workers, many of whom are entering the workforce for the first time, can maintain flexible schedules and work part time in order to manage home and family obligations.
In fact, new research shows franchises offer better pay and more opportunity than similarly situated non-franchised businesses; paying 2% to 3% higher wages, offering more than 65% of employee’s health insurance and 76% of franchise employees are offered vacation, holiday and sick leave.
But today, the franchise system in California is under attack. At the forefront is the so-called “FAST Recovery Act.” The legislation (AB 257), which failed to pass the California Assembly in 2021, is expected to be reintroduced.