"From Antimonopoly to Union-Busting: Franchisees Since 1980"

Beginning in the 1960s, franchisors, through their trade association the International Franchise Association (IFA), engaged in a campaign of lobbying & litigation to overturn antitrust restrictions on vertical restraint contracts such as territory restrictions, exclusive supply contracts, and vertical price-fixing. Franchisors depended on these contracts to control franchisees and integrate them into uniform branded chains, but franchisees viewed them as unfair restraints on their business autonomy. Invoking the rhetoric and symbols of the antimonopoly movement long after Richard Hofstader had declared it dead as a social movement franchisees resisted vertical restraints in courts and legislatures.
However, by the 1980s, franchisees had lost their antimonopoly battle against franchisor domination. Franchisors sought to take advantage of this new reality, seeking to defuse tensions between franchisors and franchisees by allying with franchisees against workers and the welfare state, joining with franchisees in lobbying campaigns against the minimum wage, unionization, and taxes.
This alliance proved enticing to many franchisees, for whom it no longer seemed possible to improve their position by winning antimonopoly struggles against franchisor control. The structure of franchising, which foreclosed virtually all paths to franchisee profitability other than by controlling labor costs, had always placed small franchisee capital in conflict with labor. Franchisors learned to harness this conflict in furtherance of their own interests. The solution to franchisee antimonopoly militancy turned out to be coopting franchisee rage: the IFA welcomed franchisees into the organization in 1993, while rolling out new programs to use the IFA’s lobbying muscle and savvy—until then deployed against franchisee struggles for autonomy—to aid franchisees in franchisor-franchisee shared goals of fighting minimum wages, taxation, and regulation. The IFA successfully redirected much of franchisee associational energy away from distributional struggles between franchisors and franchisees, into struggles that united franchisors and franchisees against labor and an overreaching state.