How Franchise Restaurants Opened the Door to the Gig Economy

When the fast food industry began booming in the 1950s, it did so via a new business model known as the franchise. This model allowed independent operators to license trademarks from a business like McDonald's or Dunkin Donuts, and it soon spread across the country, with huge consequences for how Americans are employed. Legal battles fought by franchises eventually opened the door to what's now known as the gig economy, allowing Uber drivers to be treated in much the same way as the operator of a local Chick-fil-A. To better understand the history of the franchise model, we speak with Brian Callaci, chief economist of the Open Markets Institute, and author of the book Chains of Command: The Rise and Cruel Reign of the Franchise Economy. Callaci helps break down how the franchise model works, how franchise contracts are structured to precisely dictate how franchisees are supposed to run their businesses, the relationship between the franchise model and gig work, as well as how franchises pioneered worker surveillance.

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