How McDonald's puts the squeeze on both franchise owners and workers

A new rule could give workers at the ground level more power to push back against the mothership

McDonalds workers strike.
(Image credit: Scott Olson/Getty Images)

Late last week, the National Labor Relations Board issued a ruling that capped an ongoing struggle between franchises and organized labor in the fast food world.

The way franchising works in a nutshell is the you have the franchisor, which is the central company. That central company owns a certain amount of units — individual storefronts or restaurants or whatnot. But then you also have the franchisee, who can separately own one or multiple units, and who pays a fee to the central company along with certain other obligations. In exchange, the franchisee gets the benefit of the franchisor's brand, proven business model, advertising, etc. Fast food and hotel chains tend to be the biggest players in the franchise world, though other services like car repair and janitorial work are also taking advantage of the franchise model in growing numbers.

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