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JUNE 2025
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The law of unintended consequences holds that regardless of whether any new rule has the impact you want, it will have at least three other effects you didn’t expect. Government Regs Don’t Always Work As Intended Red Tape Roulette
That adage holds true for much of what has been happening in Washington.
to franchisees on workforce size and scheduling, they are simply not employers of those restaurant workers . The NLRB’s decision to stick to the Trump administration’s narrower 2020 rule is a relief for franchisors and franchisees alike. If all this sounds as if I’m a fan of all kinds of deregulation, I’m not. In other areas, I believe the current rush to deregulation is certain to deliver dire consequences on a larger scale. As a society, I think we are bordering on hubris by walking away from regulating water quality, emissions, and climate change. Neglecting our duty to care for these quality-of-life issues could come back to haunt us all. But even in areas where I agree with the government’s goals, its best-intentioned efforts can have ridiculous effects. For example, many people would agree that expanding internet access to rural areas is a worthwhile public goal, to give folks all across the country more equitable opportunities. But even though the Biden administration’s 2021 infrastructure law mandated billions of dollars to accomplish that goal, bureaucratic infighting delayed the work for so long that Biden had nothing to show for it when he left office. Given those outcomes, it makes sense to wonder whether any of the current administration’s recent policy initiatives will have the intended effect. So far, Trump’s tariffs have helped trigger near-panic among small business owners, and some fast-food chains are seeing the sharpest drops in customer traffic since the pandemic. It’s safe to say the president didn’t intend those outcomes. Do more unintended consequences lie ahead?
Consider the sweeping staff cuts at the IRS. Who isn’t relieved that we all probably face a lower possibility of being audited? On the other hand, it seems obvious that the U.S. could collect more revenue if it were more serious about forcing all taxpayers to ante up what they actually owe under the law. None of my fast-food clients would survive if they failed to collect revenue they were owed. To me, shrinking the IRS is comparable to a small business firing its billing clerk. Just as the IRS cuts are having ripple effects, other well- intentioned policies have threatened to cause complications. Not many people would argue with the notion that the Treasury Department needs to prevent criminals from using American businesses to launder money. But the government tried to accomplish that by requiring all businesses to report details about each of their “beneficial owners” to the feds, bogging my clients down in red tape. Fortunately, that particular example of federal overreach, as required by the 2021 Corporate Transparency Act, is going away under Trump. Another aggressive proposal by a different agency, the National Labor Relations Board (NLRB) was intended to prevent employers from dodging payroll taxes. But in practice, it threatened to cost jobs and tie the hands of the entire franchising industry — a cornerstone of small business success that employs nearly 9 million people. The 2023 Joint Employer Rule would have tightened limits on classifying employees as independent contractors. But expanding it to cover franchisors and franchisees, as the NLRB tried to do, would have been a major misfire. Although franchisors sometimes make recommendations
– Nate Riordan
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Build Your Business Muscles Protect Your Company’s Credit Score Building a business can require long hours growing sales, putting out fires, and driving ideas to fruition. Checking your business credit score might not be the first thing that comes to mind, but it can make a difference in your ability to achieve those other goals. A low credit score will inflate your borrowing costs and make attracting strong business partners and vendors harder. To establish business credit, register for a Dun & Bradstreet Data University Numbering System or D-U-N-S number. Your payment history, the age of your business credit accounts, the size of your debt, and trade credit extended by suppliers all affect your score. To put your best foot forward, check your score frequently with Dun & Bradstreet, Equifax, and Experian. Ensure your business and financial information, revenue figures, and industry classification are accurate. Mixups happen more easily with business credit scores than personal ones because identifying information is indexed only to your business name and address. If your DBA is similar to another company’s, your business might be confused with theirs. Also, pay your bills on time or, preferably, before they are due. The clock runs faster on business credit than on personal loans. While consumer debt typically isn’t treated as late until 30 days after invoicing, business debt payments are considered “late” if only one day overdue. Your payment history determines your Dun & Bradstreet Paydex score and serves as the primary source of information for vendors. Paying your bills on their due date will earn you a Paydex score of 80 on a scale of 100. To achieve a higher score — closer to 100 — you’ll need to pay your bills before the due date. Also, segregate your business and personal borrowing as much as possible. When starting a business, maxing out a personal credit card is a common but ill-advised strategy. Businesses typically use far more credit than consumers and can access far more credit. Following these basic rules can help you demonstrate your trustworthiness to prospective business partners and lenders, increasing your financial flexibility and opening up new opportunities!
Kids’ Fast Food Makes Parents Smile Too Adult Happy Meals
The fast-food industry is cashing in on a new marketing strength: nostalgia.
From Gen X to Gen Alpha, successive generations of children have grown up with fast food. Many Americans under age 60 consumed a lot of burgers and fries from bags and boxes when they were kids, from Burger Chef’s Fun Meals to McDonald’s Happy Meals.
The trend has reached the point where promotions for kids’ meals are almost as appealing to nostalgic parents as to their children.
McDonald’s newest cultural phenomenon is the Minecraft Movie Deal, which includes 1 of 12 figurines inspired by “A Minecraft Movie.” In a recent article, Forbes credits the chain with accomplishing a “generational crossover” among millennials, Gen Z, and Gen Alpha (those born since 2010). Parents who embraced “Minecraft” around its initial release in 2009 may like the promo almost as much as their kids, for whom “Minecraft” is a primary form of entertainment.
Kids’ meals were not always so brand-savvy. The brainchild
of a Kansas City ad man, the first Happy Meal in 1979 included generic, Cracker Jack-like toys such as circus wagons, tops, stencils, and erasers. McDonald’s later elevated its toys to branded items, including
Barbie, Disney, Hot Wheels, Hello Kitty, Transformers, and “Toy Story.” Some Happy Meal promotions have been so successful that restaurants sold out of the toys. Remember Beanie Babies Happy Meals in the 1990s, or “Star Wars” toys in the 2000s? Longtime McDonald’s fans aren’t just missing the toys — they yearn for Happy Meals snacks too! In a wave of fast-food nostalgia, a McDonald’s menu item from past Happy Meals, the hot apple pie, emerged as No. 1 in a recent fan vote on Reddit as “the discontinued fast-food item you want to come back.” One survey participant wrote that she yearns for the Happy Meal pies “that were molten hot lava and gave mouths third-degree burns!” Where will it all end? With collectors paying $500 and up for those Teeny Beanie Babies from 1990s Happy Meals, the fast- food lovers’ nostalgia trip shows no signs of slowing.
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“There are three ways to ultimate success: The first way is to be kind. The second way is to be kind. The third way is to be kind.”
— Fred Rogers (Mister Rogers)
Drive-Thru Disruptors The Fast-Food Lane Gets a Makeover
Fast-food drive-thru lanes aren’t usually seen as a hotbed of innovation. But a flurry of fresh thinking among leading chains in the $140 billion drive-thru market suggests that pattern is about to change. From a space-themed drive-thru at McDonald’s to drive-thru- only stores at Chick-fil-A, leading franchisors are tossing out old assumptions about what a drive-thru should be. McDonald’s has gotten buzzy media coverage on its tests of a new space-themed drive-thru concept called CosMc’s. The beverage- driven format aims “to boost your mood into the stratosphere” with 10 new “otherworldly beverage creations,” from Sprite Moonsplash to Popping Pear Slush. The concept relies partly on an eye- catching store design, including an outdoor patio and a futuristically tilted version of the Golden Arches. Another ground-breaking drive-thru design comes from Chick-fil-A. Its new drive-thru-only stores have no dining room, and they are streamlined to serve roughly 700 cars an hour. In a retro twist, these units make use of Industrial Age dumbwaiters to drop orders from a second-floor kitchen to be served to customers in cars below.
thru lanes with delivery windows for mobile-only orders. Now operating at about 1,000 stores, Chipotlanes customers will find no speaker box or order-takers here — only a pickup window to serve and send them on their way in 30 seconds or less. Other longstanding holdouts, including Pizza Hut and Shake Shack, are also entering the drive-thru fray. At a Pizza Hut in Plano, Texas, a new Hut N’ Go menu offers ready-made items at a drive-thru window — the first in the chain’s 67-year history. Shake Shack also has opened drive-thru lanes at about three dozen locations. And at Taco Bell, the days of human order-takers in the drive-thru may soon be a distant memory. Parent company Yum! Brands is rolling out AI-powered voice technology at Taco Bell units throughout its system. The fast-food landscape hasn’t changed this rapidly since 1948, when a California burger chain, aptly named In-N-Out Burger, opened the first drive-thru-only restaurant in the nation. Amid slowing industry growth, this latest round of innovations is igniting hopes of a brighter future.
Visit our blog for helpful franchise law insights and industry trends: westcoastfranchiselaw.com/insights
Another industry leader, Chipotle, is breaking its longstanding no- drive-thru policy by expanding its Chipotlanes facilities — drive-
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In This Issue 1
Unintended Consequences: How Government Rules Miss the Mark The Nostalgic Allure of the Happy Meal Steps Toward Building a Strong Business Credit Score Fast Food, Faster Future: The Innovation Race at the Drive-Thru Leading Restaurant Chains Strive for That Human Touch
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Winning Chains Are Elevating the Customer Experience Serving More Than Food
reward customers if employees see them being kind to others. Cava CEO Brett Schulman says people today are yearning for human connection, but find it missing in many of their day-to-day encounters. At Cava, he told analysts recently, “We are focused on creating the authentic human connections consumers are hungry for.” At Chick-fil-A, managers believe an employee’s warm-hearted response to a customer can “come across like beautiful music,” Ryan Magnon, the company’s senior principal operations lead, said on a recent podcast. Whenever a customer at the popular chicken chain says “thank you,” servers are taught to answer, “My pleasure” — and to make clear that it comes from the heart! The simple phrase often lands with surprising warmth, Magnon says. “It is all about the intention on the part of that team member to deliver that great service.”
People will forget what you said and did, but they will never forget how you made them feel, as author Maya Angelou once said. That principle clearly has fans in the restaurant business. Several of the nation’s top-performing restaurant chains are working hard to elevate the brief, emotional experiences when a customer decides how they feel about eating there. Those flashpoints can be as fleeting as being ignored when you enter the store, encountering a rude order-taker, or nearly tipping your drink as you sit down at a wobbly table. At some successful chains, orders to fix those problems are coming straight from the top. Wobbly tables were a hot topic when Chili’s CEO Kevin Hochman met recently with managers at a Minnesota store to hear their complaints and suggestions.
Hochman has held 40 such store-level, in-person meetings to assess customers’ experience, as seen by managers at the grassroots. In those sessions, Hochman does whatever it takes to fix these small annoyances by delegating tasks or putting the responsibility squarely back on the manager, according to Restaurant Business. Fixing small annoyances like that on a chain-wide scale has led to broad improvements in Chili’s customer reviews. “Every time we invest (in customer service),” Hochman said, “good things happen.” Employees at Cava, a fast-growing Mediterranean-style chain, are trained to spread the love by using a “Love Button” on cash registers. The gadget enables employees to reduce customers’ bills if they notice they’re having a bad day, or
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