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SEIU to petition FTC for probe into franchisors’ practices

The Service Employees International Union said Monday that it would petition the Federal Trade Commission to look into alleged abusive practices by prominent franchisors, including McDonald’s and 7-Eleven.

In its petition filed with the FTC Monday, the SEIU highlighted five U.S. franchisor behaviors it deemed “particularly harmful” among 14 of the nation’s largest franchise systems. Those practices include: unfair termination or nonrenewal of franchise agreements, misleading or incomplete financial performance information presented to potential franchisees, retaliation against independent franchisee organization members, unreasonable demands for capital expenditure and denial of franchisee requests to transfer or sell their business.  

McDonald’s franchisees have recently said that the company’s requirements for renovations and remodels have saddled them with sizable debt. In addition, many have complained about the company’s turnaround efforts, including the customizable Create Your Taste menu, for which equipment will reportedly cost between $120,000 and $160,000.

The SEIU is also currently supporting a three-year campaign to boost wages for fast-food and retail employees.

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