IBD
Grant Chen’s Seattle restaurant netted just $8,856.57 last year after he had to start paying a minimum wage of $11 an hour. Starbucks (SBUX) raked in about $2.8 billion.
So here’s a puzzle: How can it be that the city’s minimum-wage
law puts Chen, a decidedly small-time restaurant owner, in the same
large-employer category as Starbucks CEO Howard Schulz?
You might call it guilt by association. Chen, a second-generation
Chinese American, pooled together retirement savings with a few friends,
along with loans from family members, and used the money to buy a
franchise of a fast-casual chain that could provide the stability of a
familiar brand, training and procedures that wouldn’t require them to
reinvent the wheel.
Yet now national chains like McDonald’s (MCD)
that use the franchise model are under political and legal attack on
multiple fronts. Small businesses — many of them minority-owned — are
suffering collateral damage.
Under the Seattle law, and potentially to a much greater extent under
New York state’s minimum-wage hike for fast-food outlets,
small-business owners are being penalized for their association
with large corporations that license out their brands... READ MORE
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