And so we come to the ultimate affront to franchising. Responding to strong lobbying efforts by the Service Employees International Union (SIEU), the California legislature passed the Fast Food Accountability and Standards (FAST) Act late this summer. Governor Newsom signed it into law on September 5th. The SIEU’s transparently characterized the FAST Act as part of a multi-year effort to unionize the restaurant industry in California.

Some might take solace in the fact that Act applies only to the largest franchisors, but as reported in the Wall Street Journal, that includes “16,753 franchise locations . . . run by 5,820 franchisees – that is, small businesses.” The Act creates a Fast Food Sector Council (the Council) comprising two representatives of quick service restaurant (QSR) franchisors, two representatives of QSR franchisees, two representatives of QSR employees, one representative of the governor’s Office of Business and Economic Development, and one representative of the California Department of Industrial Relations. The Governor appoints all members of the Council, except for the employee advocates, who are appointed by the Speaker of the California State Assembly and the Senate Rules Committee.

Remarkably, the Council has the authority to promulgate wide-ranging regulations governing businesses subject to the FAST Act on its own, without legislative action, establishing fundamental work rules. These include, for instance, wages, hours, working conditions,...

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