Franchising is hardly a recent arrival to the American labor landscape, and yet there always seems to be something new and shocking to say about it. In Franchisor Power as Employment Control, Andrew Elmore and Kati L. Griffith weave together insights that have been percolating in legal and social science scholarship and add in some illuminating perspective for a new spin on the franchising model.
Unlike product franchising, which makes occasional appearances in the 1L Torts curriculum, business-format franchising receives little attention outside the work law universe. This has always struck me as odd: Tesla may still be considered a disruptor for selling directly to the public, but the type of product franchising strategy it’s famous for eschewing is now less ubiquitous—and less cultural influential—than the business-format franchising of a McDonald’s or a Domino’s. To a great and growing degree, we live in a franchised world, one where the sign on the door (or on the uniform, or delivery box) encourages us as consumers to see unitary corporate identity where there is none. At the same time, contracts and manuals demand that courts see independent and equally sophisticated actors where there are none. Despite this puzzling and omnipresent set of circumstances, business-format franchising continues to receive little attention in mainstream legal scholarship.
Elmore and Griffith bring some much-needed perspective to this situation, and in the rest of this Jot I’ll outline four ways in which their article contributes to both our understanding of business-format franchising and of work law more generally.
First, and alongside a growing cohort of work law scholars, Elmore and Griffith critique the exceptionally narrow understanding of freedom and control that have come to characterize American work law. Using the language of “direct” and “indirect” control, they show how courts have “often discount[ed] indirect control and require[d] evidence of direct, day-to-day supervision… to support a determination of joint employment.” (P. 1328.) This undue focus on “direct” control—essentially, a negative conception of freedom according to which only affirmative interference in another’s activity triggers liability—is something I’ve noticed in the gig work context as well, but it gets far too little attention in the franchising universe.
Second, and building on this first point, Elmore and Griffith offer nuts-and-bolts insight into how acutely control can be felt in the franchise context despite the absence of direct oversight. For instance, a Domino’s franchisee “stated that Domino’s reduced the score of one of his stores because an employee with an ingrown hair condition ‘didn’t have a doctor’s note’ to justify facial hair longer than an inch.” (P. 1354.) This kind of detail, which is usually only available through ethnographic social science is crucial to dismantling work law’s emphasis on negative freedom or direct control.1
Third, Elmore and Griffith gesture heavily towards the mileage employers get out of claims that they are merely protecting their “brand value.” They note, for instance, that the main purpose of “operations manuals is to ensure that food preparation and ‘brand standards’ are uniformly implemented in franchised restaurants,” and that courts often agree that this focus on brand maintenance changes the implications of franchisor control. (P. 1347.) Although I’ve been struck by the exculpatory power of brand management in the gig context, and although the legitimacy of brand maintenance is often asserted by franchising enthusiasts, this issue has received too little critical reception in work law literature. What remains to be seen is whether law can catch up to the way brand management is understood in business literature—particularly in services marketing scholarship—where brands are recognized as co-created by firms (or franchisors) and workers (or franchisee employees).
Despite these contributions to our understanding of both business-format franchising and other work relationships, the undoubted centerpiece of Elmore and Griffith’s article is its focus on the powerlessness of franchisees. Worker-friendly commentators have tended, quite understandably, to focus on the far ends of the franchise relationship: on the franchisor, or lead firm, and on the individual employee who has no direct contractual relationship with that lead firm. This kind of polar orientation makes sense since the goal of most critical commentary is to argue that the lead firm should incur greater liability than it currently does (somewhere not too far from zero) for the poor working conditions of the individual employee.
But what Elmore and Griffith do to unusual and excellent effect is to focus on the connection between the lead firm and the franchisee, clarifying just how powerless that intermediate actor actually is. “Franchisors’ power to control is embedded into the very structure of the franchising business model,” they write. (P. 1338.) This is unarguably true; even franchising’s supporters describe the model, appreciatively, as “a business form that borders on a dictatorship.”2 From their study of franchising contracts, Elmore and Griffith note that 34 of the 44 contracts “give the franchisor… broad power to terminate,” almost all (41 of 44) “give franchisors the sole discretion to decide whether to renew,” and 38 of 44 “contain a restriction on competitive behavior after contract termination.” (Pp. 1340–44.) This emphasis on the unseen middle of business-format franchising—the franchisee—is powerful. It conveys exactly why franchisors ought to be held responsible for so much of what occurs in their franchisees’ businesses: not only because the individual employees are so vulnerable (although they are) but also because the franchisees themselves are deeply vulnerable vis-à-vis their lead firms.
Altogether, Elmore and Griffith offer a valuable and comprehensive take on a longstanding problem in work law, and they do so in a way that offers ready applicability to other types of labor relationships.
- Robin Leidner, Fast Food Fast Talk: Service Work and the Routinization of Everyday Life (1993).
- William L. Killion, Putting Critical Decision Making Where It Belongs: Scouring the Franchise Agreement of the “D” Word, 24 Franchise L.J. 228 (2005).
