Despite evidence to the contrary, fast-food franchisees say wage hikes will affect their bottom line.
Patrick Pipino has been in the restaurant business nearly his whole life, washing dishes at the age of 12 and waiting tables as a teenager, before working his way up to manager of a Ben & Jerry’s in Saratoga Springs, N.Y. In 1996, he purchased that store and, by 1999, he owned three locations of the ice cream chain. The dream of being a multi-unit franchisee was short-lived, though. Just ten years later, he was back down to one location; he was forced to sell the other two because of high franchising costs. “It’s very, very difficult to make any business go, but certainly a franchise business, where you have an advertising fee, a royalty fee,” he says.
Today, Pipino says he is struggling to keep his remaining location open. Still grappling with franchise costs, Pipino and other fast-food franchisees are faced with a new set of numbers brought on by phased-in minimum wage hikes. Two states (New York and California) and the city of Seattle have so far approved a $15 per hour minimum wage. With lawmakers in several other states and cities proposing similar measures, the Fight for $15 movement shows no sign of slowing down. Though it’s intended to help low-income workers earn a living wage, franchisees say it could force their hands in cutting jobs and reducing hours.
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