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Franchise group to sue over Seattle's $15 minimum wage

Franchise owners are required to pay workers the $15 minimum wage regardless of the number of employees under the new ordinance passed Monday by the Seattle City Council. (AP)

A group representing franchises says it will sue over a provision in the $15 minimum wage measure passed Monday by the Seattle City Council.

The Washington, D.C.-based International Franchise Association says the ordinance is discriminatory because it requires franchise owners to raise their minimum wage as quickly as any other big business rather than under the rules passed for other small businesses.

"The City Council's action today is unfair, discriminatory and a deliberate attempt to achieve a political agenda at the expense of small franchise businesses owners," says IFA President and CEO Steve Caldeira.

Under the new measure, businesses with fewer than 500 employees have seven years to phase in the $15 minimum wage. Big businesses and franchises - regardless of employee count - must raise their minimum wage to $15 within three years, or four years if they provide health insurance.

City Councilmember Kshama Sawant, a leading supporter of the $15 minimum wage effort, has said repeatedly that franchise owners are wealthier than other small business owners and can afford to pay the higher wage sooner even if they have a small number of employees.

Councilmember Tom Rasmussen says the suit has no merit and he's not surprised by the threat.

"We know that we're facing McDonald's. We know we're facing huge national and international corporations that want to keep wages low so they can continue to reward their CEO's tens of millions of dollars ever year," he says.

But Caldiera says most franchise owners are small business people who have often put all of their life savings into their businesses.

"The franchisees own the stores, not the big businesses, so this would put them at a significant disadvantage against non-franchise businesses."

The IFA says there are approximately 600 franchisees in Seattle who together own 1,700 franchise locations and employ 19,000 workers.

"These hundreds of franchise small business owners are being punished simply because they chose to operate franchises," Caldeira says. "We're going to push back hard and we believe there's precedent at the state and federal level to do so."

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