What Do Franchisees Do? Vertical Restraints as Workplace Fissuring and Labor Discipline Devices

Callaci, Brian

doi:10.5070/lp61353764

Cited by 5 publications

(7 citation statements)

References 39 publications

(45 reference statements)

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“…Recent analyses of US franchising agreements strongly suggest that the constraints placed on franchisees by lead firms precludes many alternate profit-making strategies other than by extracting effort from a precarious workforce (Callaci, 2018(Callaci, , 2019. While not illegal, limited access to union protection makes such employees extremely vulnerable to the actions of franchisees already facing pressure to extract profits through minimizing labour costs (Bennett, 1994;Weil 2009Weil , 2011Weil , 2014.…”

Section: A Workforce Vulnerable To Weak Enforcementmentioning

confidence: 99%

“…Canadian data on the characteristics of franchisee employees are scarce. However, based on Callaci (2019), and on the demographics of the precariously employed in industries where franchising is prevalent, many are likely to be female, young workers, racialised, recent immigrants, or have low levels of education (Noack and Vosko, 2011;Lewchuk, 2017;Vosko et al, 2020). Several major franchised brands also recruit employees through Canada's Temporary Foreign Worker Program (Polanca and Zell, 2017: 270).…”

Section: A Workforce Vulnerable To Weak Enforcementmentioning

confidence: 99%

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Are franchisees more prone to employment standards violations than other businesses? Evidence from Ontario, Canada

Easton¹,

Noack²,

Vosko³

2023

Preprint

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<p>Using an administrative dataset from the Ontario Ministry of Labour, we investigate three hypotheses about employment standards violations among franchised businesses: (1) franchisees have a higher probability of violating employment standards than other businesses, (2) franchisees have a higher probability of monetary/wage-related ES violations than other businesses, and (3) franchisees have a lower probability of repaying monetary/wage-related violations than other businesses. The results of our statistical models suggest that overall, franchisees are indeed more likely to violate ES, have a higher probability of monetary/wage-related violations, and are less likely to repay such violations. However, the results vary substantially by industry. While franchisees had only marginally higher probabilities of an ES violation in two of the seven industry-groups examined, five of the seven industries showed substantially higher probabilities of a monetary violation. The results also show that franchisees in three industry groups (retail, accommodation and food services, and education, public administration, healthcare and social services) are particularly prone to monetary violations. </p>

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Section: A Workforce Vulnerable To Weak Enforcementmentioning

confidence: 99%

Section: A Workforce Vulnerable To Weak Enforcementmentioning

confidence: 99%

Are franchisees more prone to employment standards violations than other businesses? Evidence from Ontario, Canada

Easton¹,

Noack²,

Vosko³

2023

Preprint

View full text Add to dashboard Cite

show abstract

“…More recently, Brian Callaci (2021a) examined the continuum between employment and franchising by contrasting the legal and economic relations that ideally characterize markets and firms, and then specifying those relations in franchising. In markets, Callaci writes, economic relations between the parties are notionally equal and discrete, and legal relations between the parties are contractual.…”

Section: IImentioning

confidence: 99%

“…Franchisors as rentiers must secure, protect, and sweat the asset in order to maximize the profit that can be appropriated from it. This drives them to impose extensive vertical controls on franchisees to protect the asset's value and maximize their rents by ensuring that franchisees live up to their obligations (Christophers 2020, 40;Callaci 2021a). 5…”

Section: IImentioning

confidence: 99%

Franchising and the Extraction of Surplus Value: Excavating the Legal Boundary Between Franchisees and Employees

Tucker¹,

Bartkiw²

2023

JLPE

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Nearly one in ten Canadians in the private sector works in the franchised sector of the economy. For the most part, franchisors operate as rentiers, extracting value from franchisees for the use of their brand. Research has demonstrated that this arrangement puts additional pressure on franchisees to extract surplus value from their employees that tend toward substandard and unlawful working conditions. In this scenario, franchisors benefit from but are only indirectly involved in the extract of surplus value. In some cases, however, the vertical controls exercised by "franchisors" over "franchisees" are so extensive, and the financial contribution of "franchisees" is so limited, that the franchisor becomes involved in directly extracting surplus value from franchisees. We explore this latter phenomenon through an excavation of the history of the legal distinction in Canadian businessformat franchising in Canada and detailed studies of two recent Canadian cases in which "franchisees" successfully claimed employment status.

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“…The criteria for inclusion are that the chains had to have at least 80 locations nationally, and had to have filed their FDD in Wisconsin, indicating at least some presence in that state. SeeCallaci (2021b) andCallaci et al (2023) for further details on the FDD data.7 This could be regarded as an outgrowth of the overall paradigm shift in labor economics described byCard (2022), since previously the maintained assumption was that the vast majority of labor markets are highly or even perfectly competitive, particularly for low-wage workers.…”

mentioning

confidence: 99%

The Effect of Franchise No-Poaching Restrictions on Worker Earnings

Callaci¹,

Gibson²,

Pinto³

et al. 2023

SSRN Journal

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What Do Franchisees Do? Vertical Restraints as Workplace Fissuring and Labor Discipline Devices

Cited by 5 publications

References 39 publications

Are franchisees more prone to employment standards violations than other businesses? Evidence from Ontario, Canada

Are franchisees more prone to employment standards violations than other businesses? Evidence from Ontario, Canada

Franchising and the Extraction of Surplus Value: Excavating the Legal Boundary Between Franchisees and Employees

The Effect of Franchise No-Poaching Restrictions on Worker Earnings

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