West Coast Franchise Law - July 2022

West Coast Franchise Law - July 2022

July 2022

600 Stewart Street #1300, Seattle, WA 98101 | westcoastfranchiselaw.com | 206-903-0401

An American Dream

One of the best things about being a lawyer is having the ability to make an enormous difference in another person’s life. It’s the reason why I used to volunteer at the Northwest Immigrant Rights Project here in Seattle. The process of helping asylum seekers with their cases was different from anything else I’ve ever done. My work was pro bono, and I met many people who would have otherwise never crossed my path.

Washington, where I met him and agreed to take his case. My first order of business was to get him out of detention on bond — which required $10,000. Jesus didn’t have $10,000. But members of the Venezuelan community, who didn’t really know him, managed to collect the necessary money. They called me to ask how to use the funds to help Jesus. I provided my account

a triplicate form, tore off the pink page, and handed it over to Jesus and me.

Jesus asked me what had just happened. I explained that he’d won his case and that crappy pink paper was his green card. I’ll never forget the moment the realization washed over his face: He could stay. He was safe. He could start his new life in America. After gaining his permanent residency, Jesus started a landscaping business. He eventually had employees and successfully helped others build a life, too. He also got engaged and had plans to be married. So, I was deeply saddened to learn from his fiancée that Jesus died in December from a heart attack. People like Jesus remind me why I still love this country — despite its faults, people will walk here from Venezuela. They’re the ones who make America great because they have the bravery and initiative to give up what they know and start over. Jesus put his faith in himself, his community, and perfect strangers, and he managed to build something new. On July 4, I remember him and everyone else who risked it all to come to the land of the free. Though he never gained citizenship, Jesus embodied the American spirit, and he continues to inspire me over and over again. His story makes me proud to be an American.

information so they could make a deposit. Of course,

Jesus Figueroa Martinez stands out in particular. He was born in Venezuela and sold

I was a total stranger to them. But someone

walked into a Chase Bank in Southern California and deposited money with the knowledge that they’d never meet me and blind hope that I wasn’t a scam artist.

clothing for a living. But then he began speaking out against Hugo Chavez and organizing protests. Soon, the government targeted Jesus for harassment. Eventually, harassment turned into beatings. And finally, his enemies shot him during a protest. He felt that if he stayed in Venezuela, he would die. So, after he recovered from the shooting — with the bullet still lodged in his body — he walked past the Venezuelan border, up through Central America, into Mexico, and then finally to the United States, where he surrendered to immigration authorities in San Diego.

After Jesus’ release, he found a job, and I began working on the evidence he would need to gain asylum. These cases go through an administrative hearing, and a judge decides them in a relatively informal context. Still, the process contained a lot of legalese, and English was not Jesus’ first language. During the hearing, I showed the X-ray of the bullet that injured Jesus. I also presented letters from people in Venezuela who attested to his character, outlined his struggles with the government, and explained that they would likely kill him if he returned. At the end of the hearing, the judge signed and stamped

– Nate Riordan 1 206-903-0401

U.S. Immigration and Customs Enforcement flew him to a detention center in Tacoma,

Oceanside Activities the Entire Family Can Enjoy The summer season is officially underway and many Americans are planning to take a trip to the beach to celebrate the occasion. If you’re going on a family vacation to the ocean for an extended period of time, you may be worried about keeping everyone entertained. That’s why we put together a list of some of our favorite oceanside activities to try this summer. Your summer vacation will be filled with fun and excitement after trying some of these great activities! Get active. There’s nothing more relaxing than sitting on the beach and listening to the calm repetition of the waves, but maybe you want a little more excitement by the ocean. If that’s the case, there are plenty of sports to try. You can bring a football and throw it around in the water or on the beach. You can buy a net and set up a game of beach volleyball to get everyone involved, or you can try one of the many new beachside sports hitting the market like TidalBall, pickleball, and Spikeball. TidalBall is the beach version of cornhole, so if you haven’t played it yet, you definitely want to check it out.

Experience nature. The wildlife and environment of the beach are most likely drastically different from what you can experience back home, so make an effort to see all you can. At many beaches, you’ll be able to see dolphins, whales, and sea rays from the shore. You can also look in the sand for crabs and small crustaceans. By simply standing still and taking in all of the sights and sounds of the ocean, you’ll gain a greater appreciation for the surroundings. Ride the waves. You don’t need to be an experienced surfer to venture into the water on a board. Of course, you can take surfing lessons at many beaches, but you can also get in the water on a bodyboard for a thrilling experience. Additionally, you can rent kayaks or paddleboards if you want to be on the water, but not necessarily in it.

Keeping It Above Board

WHAT TO KNOW ABOUT TIPPING LAW

Tipping service workers is hotter than ever, but failure to understand employment law can land franchisors in hot water. Allowing tips makes workers happy and leaves customers feeling like they’ve done something good, but the process requires careful management. If your business lets customers tip, you need to know how to keep everything above board. Laws vary by state, but it’s helpful to know the federal basics and what pitfalls to avoid. The primary federal law governing tipping is the Fair Labor Standards Act (FLSA), which also covers rules regarding minimum wage, hours, overtime, and other work-related conditions. First and foremost, it makes clear that tips belong to employees, not business owners. Employers cannot keep tip money, share it with managers, or use it to offset the cost of doing business.

The law allows for a tip credit, which entitles businesses to pay their employees $2.13 per hour, so long as the worker’s full wages with tips total minimum wage or higher. Generally, only full-service restaurants use the tip credit. But if you do, you should know that the Department of Labor created new rules in 2020. Businesses that use the tax credit can only include tipped workers in a tipping pool and cannot use it to pay back of house staff. Tip pools involve all tips being combined into a single pot and split evenly among a group of employees. It is often the easiest and most equitable way to distribute tip money in restaurants with counter service. This way, workers won’t need to fight over whether to work the counter or the grill, and each contribution to the customer’s experience is considered roughly equal.

As cash tip jars fall by the wayside, employers have developed new concerns about credit card processing fees. The Department of Labor has determined that businesses may withhold the amount of the processing fee from the tipped employee. Some states, like California, have stricter laws mandating that the employer cover the processing fee and provide workers with the entire tip. More rules and regulations apply. Tip pools must distribute tips at least as often as they pay wages, and businesses that do not take the tip credit still have record- keeping requirements. Allowing tipping in your establishment has numerous advantages, but the process comes with many responsibilities. Make sure you’re up to date on your state and federal obligations to avoid an investigation — or worse.

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Up and Up and Up They Go Where Food Prices Are Headed, Nobody Knows

Rising food prices have become a burden to everyday Americans and restaurant owners alike. Dining out is getting more expensive, and more franchisors are considering how to serve food people can afford while still making a profit. In April, the U.S. Department of Agriculture (USDA) predicted that restaurant prices will climb 5.5%- 6.5% this year, outpacing 2020 and 2021. Inflation and higher commodity prices are behind the expected increases, and popular franchise products are some of the most deeply affected. The USDA expects wholesale beef prices to rise 4%- 7% this year. Meanwhile, they predict poultry prices will increase up to 12% — after a 26.5% rise since 2021. Cooking oil will probably face the largest bump, with possible 30% increases forecasted. The culprit continues to be inflation, rising labor costs, and supply chain issues. Shutdowns due to COVID-19 have impacted production, transportation costs continue to climb, and workers are demanding higher wages than in previous years. Even Russia’s invasion of Ukraine is taking a toll on food costs; Ukraine is a major wheat producer, and flour prices might rise 15% in 2022. Restaurants have been finding ways to adapt, but the calculus is a bit trickier for franchise-operated businesses. Customers at quick- serve and fast-casual restaurants won’t tolerate “market price”

listed on a menu, and it’s much easier to update an independently run restaurant’s QR code menu than large menu boards. Further, consumers are only willing to pay so much for the breakfast sandwich. Still, some strategies may prove helpful. Some restaurants are slimming down their menus, cutting items that are less popular or have slimmer margins. It’s a trend that has even spread to Darden Restaurants. The move will help you control costs while also making preparation easier on your staff — an important consideration when you might be running short-handed.

The next step is to design your menu so customers will feel most enticed by your items with the highest profit margins. An expert with Menu Engineers estimates that diners spend fewer than 90 seconds looking at a menu, even in a full-service restaurant. So, use eye-catching designs to feature the items you want your customers to purchase.

These strategies won’t make the inflation problem disappear, but they might help you endure the ride as we keep our eye out for the light at the end of the tunnel.

SUMMER CRAB AND LEMON CARBONARA

TAKE A BREAK

Fresh crab and lemon make this crowd-pleasing pasta dish perfect for summer.

Ingredients:

Inspired by FoodAndWine.com

• • • •

12 oz bucatini pasta

•

3 oz Pecorino Romano cheese, grated 1/2 cup fresh chives, thinly sliced

1/2 cup olive oil

2 tbsp garlic, finely chopped 1/4 cup drained and rinsed capers, chopped 1 tsp coarsely ground black pepper 6 large egg yolks, beaten

• • • • •

8 oz fresh crabmeat

1 tbsp grated lemon zest 1 tbsp fresh lemon juice

•

Sea salt or kosher salt, to taste

•

Directions:

1. In a pot of boiling water, cook pasta until not yet al dente. Drain and reserve 1 cup cooking liquid. 2. In a large skillet over medium heat, cook oil and garlic until lightly toasted. Add capers and black pepper, then stir for 2 minutes. 3. Add reserved cooking liquid to skillet and bring to a boil over medium heat. Stir in pasta and cook until al dente. Remove from heat. 4. Stirring constantly, pour egg yolks quickly into the mixture. Add cheese and chives, stirring well until sauce is creamy. Add crab, lemon zest, and lemon juice. Toss together and season with salt.

Solution:

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600 Stewart Street #1300 Seattle, WA 98101

westcoastfranchiselaw.com | 206-903-0401

IN THIS ISSUE 1 2 An Unexpected Lesson in Patriotism Oceanside Activities to Try This Summer

Brush Up on Tipping Law Basics Managing Sky-High Food Prices Summer Crab and Lemon Carbonara Don’t Rely on Profit to Measure Success

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Business Is a Never-Ending Game How Do You Play This Infinite Game?

“The Infinite Game” by Simon Sinek is among the greatest motivational books you can get your hands on. He gives readers an inside scoop on the importance of adopting an “infinite mindset” while “playing the game” of business. Let’s look at some of the chapters that can help you and your business.

embody all five of these principles: Victorinox, the creator of the Swiss Army knife, Bill Gates and Microsoft, and the GPS company Garmin.

Chapter 5: Building a Culture of Trust A healthy work culture is based on trust. If your workers sense a lack of trust, that affects efficiency, since no one will feel comfortable voicing their concerns or mistakes. Ford Motor Company is a perfect

Chapter 1: Business Isn’t a Finite Game The first chapter discusses why running a business isn’t a finite game. It focuses on how profit and income aren’t the only ways to measure success. Profit means nothing if you’re unable to survive current and future difficulties. This is why business is an infinite game — you don’t want to create something to “win” (finite); you want to build a foundation that will remain for future generations (infinite). Chapter 2: Essential Practices Sinek explains the strategies you need to play the infinite game. These skills include developing a “just cause,” creating trusting teams, studying your rivals, preparing for flexibility, and showing courage to lead. He follows up with examples of companies that

example. Before 2006, the now-former CEO would reprimand and penalize workers who brought him bad information. This caused an unhealthy work environment and led to lower productivity. Sinek offers tips on how to create a culture where your employees are comfortable and confident. “The Infinite Game” teaches you that business is an endless game where you have to overcome many challenges. Successful businesses play the infinite game, constantly improving the business to become better. Sinek provides tips, solutions, and examples of how your business can thrive while playing the game. To get your hands on “The Infinite Game,” visit your local bookstore or online retailer.

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