WEBVTT - Split Congress and Its Impact on Restaurants 0:00:01.240 --> 0:00:07.160 Welcome to Bloomberg Intelligence. BI provides research on industries, companies 0:00:07.160 --> 0:00:10.959 and expert topics, delivering key data from BI analysts and 0:00:11.000 --> 0:00:20.400 they're given industry. Now Here is your Bloomberg Intelligence research team. 0:00:20.440 --> 0:00:23.000 Welcome to Chopping It Up Episode nine. I'm your host, 0:00:23.079 --> 0:00:25.639 Mike halon On, the senior restaurant and food service analyst 0:00:25.680 --> 0:00:29.400 at Bloomberg Intelligence. My pleasure to introduce my guest today, 0:00:29.440 --> 0:00:32.320 Joe key Faver. Joe is a founding partner of Aligned 0:00:32.320 --> 0:00:36.360 Public Strategies of Full Service Public Affairs and Creative Firm, 0:00:36.400 --> 0:00:39.320 and he's the host of the Weekly Working Lunch podcast. 0:00:39.360 --> 0:00:43.160 So you can find Joe's weekly restaurant pod on SoundCloud 0:00:43.200 --> 0:00:47.600 and Restaurant Business. Thanks for doing this, Joe, Mike did 0:00:47.600 --> 0:00:50.720 to be your pa, did to talk to you. Happy news, 0:00:52.560 --> 0:00:55.440 Happy New Year to you as well. Um so Joe's 0:00:55.520 --> 0:00:58.319 might go to guy when it comes to politics. Uh 0:00:58.360 --> 0:01:00.880 So that's what we're gonna get into today. So you know, 0:01:00.960 --> 0:01:03.160 let's start out by asking what happened to the red wave? 0:01:05.240 --> 0:01:08.039 And the red wave we're talking about an EBB tide. 0:01:08.400 --> 0:01:13.200 There was no red wave. Um, you know, I think, um, 0:01:14.000 --> 0:01:16.399 you know, we were gonna we're in a kind of 0:01:16.120 --> 0:01:21.080 a big political transition in the country where UM UM, 0:01:22.640 --> 0:01:28.440 the technology of detecting voter moods and voter intensity has 0:01:28.520 --> 0:01:33.759 not kept up, and so polling is is probably as 0:01:34.240 --> 0:01:39.919 UMS inconsistent over the last five years has ever been UM, 0:01:39.959 --> 0:01:43.720 and the technology really hasn't caught up to to UM, 0:01:44.000 --> 0:01:46.959 you know, actively measured voter attitude. So what happens is 0:01:47.280 --> 0:01:50.760 no one really knows right. And it's funny how everyone's wrong, 0:01:50.880 --> 0:01:53.200 but everyone's saying, well, my polls are right with everybody else. 0:01:53.240 --> 0:01:56.080 The poles are rocks. This is crazy that UM. You know, 0:01:56.160 --> 0:01:59.360 I think it's difficult. It's going to be increasingly difficult 0:01:59.520 --> 0:02:04.600 for the publicans two, you know, whether whether they win 0:02:04.800 --> 0:02:08.480 here or win there, to create a working majority. You 0:02:08.560 --> 0:02:12.040 see what's happening this week in Congress. I mean, they 0:02:12.080 --> 0:02:16.160 can't even get a leader that I doesn't even sworn 0:02:16.240 --> 0:02:18.799 in yet. And you know, I'm not I'm not trying 0:02:18.840 --> 0:02:21.639 to be partisan, but you can't help being part of 0:02:21.639 --> 0:02:24.200 that when you're talking about this stuff. It's you know, 0:02:24.280 --> 0:02:27.640 it's it's they find themselves in a position where if 0:02:27.639 --> 0:02:29.800 you get remember, you know, for the first time, and 0:02:29.840 --> 0:02:32.760 I think American history a major political party did not 0:02:32.880 --> 0:02:35.320 have the political platform and an election cycle. The Republicans 0:02:35.360 --> 0:02:37.680 had no platform, you know, and that doesn't give you 0:02:37.720 --> 0:02:41.200 a blueprint for governance, right, And so they've they've they've 0:02:41.280 --> 0:02:43.480 kind of become the anti governments part of you seeing 0:02:43.520 --> 0:02:45.760 that playoff in Washington right now. So what that means 0:02:45.880 --> 0:02:48.800 is for voters, to answer your question, there's not a 0:02:48.840 --> 0:02:52.519 lot to glomb on to except for, well, that is 0:02:52.600 --> 0:02:55.040 the other guy, right, and that is not a that's 0:02:55.040 --> 0:02:57.600 not a winning long term strategy. It wasn't a winning 0:02:57.600 --> 0:03:00.440 long term strategy this time. And I think what what 0:03:00.520 --> 0:03:02.640 they're finding and whether you know, who knows what in 0:03:02.680 --> 0:03:07.639 the back room, what's going on. But you know, Americans, 0:03:07.960 --> 0:03:09.880 you know, for better for worse. We can talk about 0:03:10.040 --> 0:03:11.800 we want limited government, we want this, but they like 0:03:11.880 --> 0:03:16.680 to see Congress legislating. They like, you know, polling after polls, 0:03:16.720 --> 0:03:20.320 polling for you know, generations, they wanted to see Congress legislating. 0:03:20.720 --> 0:03:23.519 And Congress, whether you're whether you agree with or not, 0:03:23.520 --> 0:03:25.280 I agree with what they did in the last two years. 0:03:25.400 --> 0:03:28.160 They were legislating. And so I think there was a 0:03:28.760 --> 0:03:34.760 well spring of support out there um that punditry didn't acknowledge. 0:03:35.080 --> 0:03:37.320 And I think the Republicans you know, just ran some 0:03:37.560 --> 0:03:41.000 terrible candidates to just ran some terrible candidates, and these 0:03:41.080 --> 0:03:44.119 races can can can be very personal, you know, and 0:03:44.080 --> 0:03:46.480 and a real popular person that doesn't have real popular 0:03:46.560 --> 0:03:50.440 views can can win, and an unpopular person that has 0:03:51.080 --> 0:03:53.400 you know, popular views can lose. And I think they 0:03:53.440 --> 0:03:56.080 just combination of all those things. Mike, So that the 0:03:56.240 --> 0:03:59.280 long winded answer to a short question. But um, there 0:03:59.360 --> 0:04:01.800 was no way and as such, there's no politt there's 0:04:01.800 --> 0:04:04.280 no mandate to govern going forward, which is difficult for 0:04:05.080 --> 0:04:09.400 your you know, your clientele, the business community, restaurants, you know, 0:04:09.440 --> 0:04:11.880 they want to manage risk, right, they want it. They 0:04:11.920 --> 0:04:15.760 want some level of clarity, good or bad, and different 0:04:16.440 --> 0:04:18.920 as to how to plan for what's coming after them 0:04:19.040 --> 0:04:23.400 in this current environment does not allow restaurants executives to 0:04:23.520 --> 0:04:27.039 have any sense of certainty about what the next couple 0:04:27.080 --> 0:04:31.919 of years looks like. That's great, thanks, And you know, 0:04:31.960 --> 0:04:34.600 I guess that leads me right in my next question. Right, So, 0:04:34.760 --> 0:04:38.320 what does the Republican House and a democratic setting me 0:04:38.560 --> 0:04:42.320 for restaurants as stimulus done, and and what what can 0:04:42.360 --> 0:04:45.800 we expect over the next two years? Well, you know, 0:04:46.640 --> 0:04:49.960 it remains to be seen certainly, certainly in the first 0:04:50.400 --> 0:04:52.440 you know, let's say that's the bude up in the quarter. 0:04:52.520 --> 0:04:55.560 So the first six months of the new Congress, you're 0:04:55.560 --> 0:05:00.599 going to see especially if um, if McCart he pulls 0:05:00.600 --> 0:05:04.400 out this, you know, he is contorting himself and conceding 0:05:04.480 --> 0:05:07.400 by the minute and depending on what he gives away. 0:05:08.000 --> 0:05:09.560 You know, I think what you're gonna see from the 0:05:09.600 --> 0:05:12.320 Republican House is just investigations. They're not gonna be in 0:05:12.640 --> 0:05:16.400 the governing and legislating and talking about the tax law. 0:05:16.920 --> 0:05:19.280 The Senate will be pushing those types of things. Obviously 0:05:19.320 --> 0:05:20.880 the White House wills, but I think you're gonna see 0:05:20.880 --> 0:05:24.440 a stalemate. I think the big pieces for a restaurant 0:05:24.680 --> 0:05:29.440 is the activism of the Biden administration. At the regulatory level. 0:05:29.839 --> 0:05:33.360 We will go full on, and you know they are 0:05:33.400 --> 0:05:37.000 doubling down. You saw this week he re nominated a 0:05:37.000 --> 0:05:40.960 whole splew appointees to the e o C and other 0:05:41.360 --> 0:05:45.120 other other governing bodies. Um not Jessica Lumin to wage 0:05:45.120 --> 0:05:47.440 an hour, but we expect that any any time now. 0:05:47.520 --> 0:05:51.159 She's fairly you know, for that position, she's fairly uncontroversial. 0:05:51.520 --> 0:05:54.839 Into Republicans. Um, So they're gonna they're gonna double down 0:05:54.960 --> 0:05:57.640 and there you know, they can't govern legislatively, They're gonna 0:05:57.640 --> 0:05:59.719 govern regulatorially. And we've already seen that in the first 0:05:59.680 --> 0:06:01.719 few year the Biden administration. But with this n LYB 0:06:02.080 --> 0:06:06.440 National Relations Sports and Doing is some pretty unprecedented stuff. 0:06:06.480 --> 0:06:08.039 I mean, they have been pedal to the metal and 0:06:08.120 --> 0:06:12.520 that's not gonna abb anytime soon. Is there any regulations 0:06:12.560 --> 0:06:16.800 on restaurants, um, you know outside of the n l 0:06:16.920 --> 0:06:20.440 RB and and kinda. Um, the change the changes we 0:06:20.480 --> 0:06:22.400 may see in franchise law will get to that later, 0:06:22.440 --> 0:06:26.000 but are there any regulations that the restaurant industry should 0:06:26.000 --> 0:06:28.560 be particularly concerned about right now? Yeah, we're in the 0:06:28.560 --> 0:06:30.960 middle of a rulemaking process on a joint employer at 0:06:30.960 --> 0:06:33.599 a number of agencies, and the restaurant industry estarch, the 0:06:33.600 --> 0:06:37.920 franchise business community needs to watch that very very closely. Obviously, 0:06:38.000 --> 0:06:42.839 the the powers that be want to um, you know, 0:06:43.360 --> 0:06:48.479 have shared responsibility between Mike Talent franchise Z and Company 0:06:48.640 --> 0:06:55.640 X franchise or on workplace violations, labor protocols, unfair labor practices. 0:06:56.160 --> 0:06:58.479 Right now. You know, in our current world, you know, 0:06:59.080 --> 0:07:01.360 the company's kind of field that have from the franchise z. 0:07:01.800 --> 0:07:05.800 The current administration wants that wants to remove that shield 0:07:05.839 --> 0:07:08.240 and make that joint liability because it's easier to go 0:07:08.320 --> 0:07:11.320 after make it up McDonald's corporately than it is to 0:07:11.360 --> 0:07:14.120 go after my kalon the you know, three unit franchise 0:07:14.160 --> 0:07:17.760 z UM. So you're gonna see in every different every agency. 0:07:17.800 --> 0:07:21.200 It was the Department of Labor, National Labor Relations Board. Uh, 0:07:21.240 --> 0:07:24.000 you know, other agencies will have their own joint employer rules. 0:07:24.040 --> 0:07:26.800 So this is a you know, this is three or 0:07:26.800 --> 0:07:29.520 four agencies were playing this. We obviously independent contractor and 0:07:29.520 --> 0:07:32.720 the restaurants don't employ a lot of independent contracts and 0:07:32.720 --> 0:07:35.840 stuff when it comes to some stared services maintenance services, 0:07:35.880 --> 0:07:38.560 the building and so forth. But all the laws around 0:07:38.680 --> 0:07:42.680 independent contractors are getting rewritten. I think other pieces that 0:07:42.720 --> 0:07:45.000 are important to restaurant tours. You know, we talk about 0:07:45.000 --> 0:07:50.280 the A twenty rule and and and regulations around work, 0:07:50.480 --> 0:07:52.480 you know, off the kind of off the clockwork, but 0:07:52.600 --> 0:07:55.800 non skipped work for tipped employees and where is that 0:07:55.840 --> 0:07:58.640 where is that guiding line? So there's gonna be more 0:07:58.800 --> 0:08:02.440 energy in that space. Well, so it's a very you know, 0:08:02.960 --> 0:08:05.560 labor is number one for these for this administration, and 0:08:05.920 --> 0:08:08.480 we're the number one labor intensive industry. So there's there's 0:08:08.560 --> 0:08:12.520 really nothing that you know, the Labor Department and its 0:08:12.760 --> 0:08:14.880 sub agencies where it's OSHA, whether it's you know that 0:08:15.200 --> 0:08:18.080 are doing that doesn't directly affect restaurant tours. I think 0:08:18.120 --> 0:08:20.280 some of your bigger business model issues that we've seen 0:08:20.320 --> 0:08:22.360 that the industry has worked on in the last couple 0:08:22.360 --> 0:08:25.560 of years paid leave, for example, nothing's going to happen 0:08:25.640 --> 0:08:32.080 federally at you paid leave. The Republicans have pivoted, not 0:08:32.240 --> 0:08:37.880 insignificantly on this issue. There's a model that both um UH, 0:08:38.440 --> 0:08:42.920 Vermont and New Hampshire have adopted with Republican governors and 0:08:43.000 --> 0:08:47.280 Democratic legislatures. That's kind of a shared responsibility type of 0:08:47.320 --> 0:08:52.400 model between employees and employers and and having private interests 0:08:52.440 --> 0:08:56.960 bid on running those kind of those uh those those 0:08:57.000 --> 0:08:59.800 insurance funds is paid leave funds. I think that's a 0:09:00.040 --> 0:09:03.640 model that if anything happened in the federal level, which 0:09:03.679 --> 0:09:06.560 is highly unlikely, it would be something like that you've 0:09:06.600 --> 0:09:11.480 seen on the far political right. Instead of opposing paid 0:09:11.559 --> 0:09:14.080 leave and this is kind of post pandemic, but opposing 0:09:14.080 --> 0:09:18.079 paid leave from a business perspective. They're embracing paid leave 0:09:18.120 --> 0:09:21.160 as a pro family issue. So there's energy on the 0:09:21.280 --> 0:09:24.080 right for the first time in a number of different ways. 0:09:24.080 --> 0:09:26.400 In the paid lead issue. I don't think there's a 0:09:26.440 --> 0:09:29.360 window in this particular Congngress for that. Um. But you'll 0:09:29.400 --> 0:09:32.720 see states you know existing, You'll see states that have 0:09:32.880 --> 0:09:36.040 paid lead programs to make them more robust. Um. I 0:09:36.080 --> 0:09:38.040 don't think there's gonna be any accent on minimum wage 0:09:38.120 --> 0:09:41.920 at the federal level, um um. You know, issue enough 0:09:41.920 --> 0:09:44.679 to go back historically over the last three years for 0:09:44.920 --> 0:09:48.640 many of the minimum wage uh increases, we've had Republicans 0:09:48.720 --> 0:09:51.240 in charge of you know, one House of Congress or 0:09:51.280 --> 0:09:53.600 the White House when they've happened. So never say never, 0:09:53.679 --> 0:09:56.520 but highly unlikely on the wage stuff. I think. I 0:09:56.559 --> 0:10:00.199 think the regulatory piece is where companies really need to 0:10:00.240 --> 0:10:02.120 be watching, and they have been for you know, the 0:10:02.200 --> 0:10:03.520 last two years have been a good lesson than that, 0:10:04.880 --> 0:10:07.320 gotcha all right? So there's been some back and forth 0:10:07.360 --> 0:10:10.000 in California over the last week regarding the fast acts. 0:10:10.000 --> 0:10:13.400 So where does that stand right now? So there's gonna 0:10:13.400 --> 0:10:17.720 be a hearing so to bring the audience up to speed. Um. 0:10:17.760 --> 0:10:24.840 Just before the new year. UM, the the the state 0:10:25.280 --> 0:10:28.280 UH said hey, we're going with this regulation as of 0:10:28.360 --> 0:10:30.320 January one. We're gonna started forth in it. And the 0:10:30.320 --> 0:10:33.480 business from you said, hey, wait a minute. We were 0:10:33.520 --> 0:10:37.120 told by current law and validated by you the state, 0:10:37.240 --> 0:10:41.880 that if we uh uh submitted the appropriate number of 0:10:41.920 --> 0:10:45.160 signatures that this basically creates to run our own ballot 0:10:45.200 --> 0:10:48.000 initiatives on winding this law, that it creates a stay 0:10:48.080 --> 0:10:50.679 situation where this law will not go into effect. That's 0:10:50.720 --> 0:10:53.120 the guidance you've given us. That's the guidance we've had, 0:10:53.800 --> 0:10:57.880 you know, forever in this state. And for reasons not 0:10:58.000 --> 0:10:59.880 yet clear, we can speculate and we'll go into that 0:11:00.120 --> 0:11:03.040 to why. The state said, math seddle the medal. We're 0:11:03.080 --> 0:11:07.079 gonna enforce this of January one. So the coalition, if 0:11:07.080 --> 0:11:12.040 you will, the Dating Restaurant Association, International Franchise Association, Chamber 0:11:12.080 --> 0:11:16.600 of Commerce, other organizations UH collectively UH filed suit to 0:11:16.840 --> 0:11:20.640 for a stay. Judge granted that day and the first 0:11:20.679 --> 0:11:23.240 hearing and I believe it's January, so the end of 0:11:23.640 --> 0:11:27.520 next week, UM, they'll be kind of first hearing in 0:11:27.600 --> 0:11:32.000 court as to how to proceed here. Um, so you know, 0:11:32.440 --> 0:11:36.360 we would all been speculating as to as to why, um, 0:11:36.600 --> 0:11:39.960 why the state? You know, it was political pressure from 0:11:40.000 --> 0:11:43.120 the STIU, of course it was, But does does the 0:11:43.160 --> 0:11:45.680 state really believe it had legal standing because most of 0:11:45.679 --> 0:11:49.240 the legal minds in the industry they had no legal 0:11:49.280 --> 0:11:52.600 standing here. Um. And it's pro form of you know, 0:11:52.880 --> 0:11:58.199 shameless giveaway to the union just to you know, it's 0:11:58.280 --> 0:12:01.640 done unconscidtable use the taxpayer money if they know they 0:12:01.679 --> 0:12:04.600 have no legal uh laid to stand on, yet they're 0:12:04.600 --> 0:12:06.280 going to drag the state and tax payers into court. 0:12:06.440 --> 0:12:09.080 So who knows what's happening. And maybe you know, they 0:12:09.080 --> 0:12:11.560 have lawyers to maybe they have a pathway. I don't know, 0:12:12.440 --> 0:12:13.959 but it's up in the air and we'll know more 0:12:13.960 --> 0:12:16.559 on January and we'll know how serious they are about 0:12:16.559 --> 0:12:19.240 trying to enforce this and what their cractionales are. But 0:12:19.559 --> 0:12:21.360 for right now, the next week and a half of 0:12:21.480 --> 0:12:25.200 the law is stayed. Um. And you know, my if 0:12:25.280 --> 0:12:26.880 I don't know, you know, you've been covering the industry 0:12:26.880 --> 0:12:29.480 a long time. I've been tivering the industry a long time. Yeah, 0:12:29.559 --> 0:12:32.320 this is this is some pretty big ball politics that 0:12:32.360 --> 0:12:34.280 the industry has been playing the last couple of years. 0:12:34.480 --> 0:12:36.360 You know what what Sean Cannon the n r I 0:12:36.440 --> 0:12:38.920 pulled off with the Restaurant Relief Fund is you know, 0:12:39.360 --> 0:12:43.040 unbelievable by partisan support for this industry, uh during during 0:12:43.040 --> 0:12:46.360 the pandemic and this activity in California is pretty pretty 0:12:46.400 --> 0:12:48.240 epic as well for us to get together as an 0:12:48.240 --> 0:12:51.320 industry raise a kind of money that we did play 0:12:51.400 --> 0:12:54.440 the ballot game, which we don't really play a lot, uh, 0:12:54.640 --> 0:12:57.440 get the signatures, get something on the bout and qualified 0:12:57.440 --> 0:12:59.199 and now we're in the court. So you know, it's 0:12:59.360 --> 0:13:00.840 it's a kind of new your day in the industry, 0:13:00.960 --> 0:13:03.520 and the industry you know, knows that they're against the 0:13:03.559 --> 0:13:07.559 ropes against a very very well funded opponent. We still 0:13:07.559 --> 0:13:10.360 tend to, you know, for you know, you add up 0:13:10.400 --> 0:13:12.679 the market caps of our big corporations, you get an 0:13:12.720 --> 0:13:16.120 astronomical number. We still have very short short crocodile arms, 0:13:16.440 --> 0:13:19.200 alligator arms relatives to our market caps are funding these 0:13:19.280 --> 0:13:20.720 kinds of things. But we're doing a lot better than 0:13:20.760 --> 0:13:24.400 we've ever done traditionally. So we'll we'll know on the 0:13:24.440 --> 0:13:26.600 third teams kind of what what the environment looks like 0:13:26.640 --> 0:13:30.200 where this judge will be. But the broader question for 0:13:30.240 --> 0:13:32.840 the industry is, you know, what does it look like 0:13:33.000 --> 0:13:38.640 if other states and cities, you know, pursue copycat legislation 0:13:38.640 --> 0:13:41.439 if you will, And and so the industry is mobilized, 0:13:41.480 --> 0:13:44.080 and there's a target. Listen about ten states, by the 0:13:44.120 --> 0:13:48.119 ten states where political winds are right in the political 0:13:48.480 --> 0:13:52.720 environment is right for a fact act type of bill. 0:13:53.080 --> 0:13:55.520 We see some at the municipal level right now. Mineapolis 0:13:55.600 --> 0:13:57.760 is kind of a hot pot where we may see 0:13:57.800 --> 0:14:02.920 some level of fast Act like legislation. We already have 0:14:02.960 --> 0:14:05.319 a similar kind of model in Detroit. The one in 0:14:05.360 --> 0:14:09.240 Minneapolis doesn't directly it's all employers, not a q SR 0:14:09.440 --> 0:14:13.000 specific thing. But this is this is the way man 0:14:13.160 --> 0:14:18.680 and um industry knows. I think soberly that the old 0:14:18.760 --> 0:14:22.840 days of HR twenty two in Congress, you know, it's 0:14:23.880 --> 0:14:27.680 those days have left us, and we're playing ball on 0:14:27.720 --> 0:14:30.160 the ballot in a lot of states, are playing ball 0:14:30.240 --> 0:14:31.920 municipally in a lot of states, and it's gonna cost 0:14:31.920 --> 0:14:35.000 a lot of money. Yeah. Well, it's great that, you know, 0:14:35.120 --> 0:14:37.760 the the industry, which is so fragmented. I think that's 0:14:37.800 --> 0:14:39.640 part of the reason why they haven't been able to 0:14:40.240 --> 0:14:42.800 join hands and and fight some of these regulations, UM 0:14:43.040 --> 0:14:46.160 and legislation in the past. Uh, it's great that they're 0:14:46.400 --> 0:14:48.960 starting to come together to fight for what's best for 0:14:48.960 --> 0:14:52.480 the industry. UM. So you mentioned, you know, Minneapolis being 0:14:52.480 --> 0:14:56.360 a municipality. UM and you also mentioned five to tend states. 0:14:56.400 --> 0:14:59.560 So what states do you think could be fast followers? 0:14:59.680 --> 0:15:01.960 And and are they gonna wait? I guess you know, 0:15:02.000 --> 0:15:03.960 obviously they're gonna wait until next week. But if this 0:15:04.000 --> 0:15:07.280 goes to referendum, are they gonna wait until the referendum 0:15:07.640 --> 0:15:10.160 comes through for them to start pushing harder on this? 0:15:10.520 --> 0:15:14.240 How do you think that's coming? Yeah? Well yeah, so 0:15:14.560 --> 0:15:16.920 let me take it kind of methodical order. You know, 0:15:17.240 --> 0:15:21.000 right after the fact at path in California, right after 0:15:21.080 --> 0:15:24.280 it got in the process, within about half an hour 0:15:24.320 --> 0:15:26.800 of the final vote. Literally, Michael, I'm coming thirty minutes 0:15:26.960 --> 0:15:30.320 of the final vote. UM. The s c I you 0:15:30.360 --> 0:15:34.320 put out on Twitter a you know, Victory laps spiked 0:15:34.320 --> 0:15:36.400 the ball and listed about fish or seven states where 0:15:36.400 --> 0:15:38.400 they're taking their road show too. Next they're the ones 0:15:38.440 --> 0:15:41.160 that first said, hey, ain't saying nothing in the warm 0:15:41.240 --> 0:15:44.160 up that right, So we're we're looking at a lot 0:15:44.240 --> 0:15:48.880 of those traditional you know, blue trifectus states and maybe 0:15:48.880 --> 0:15:52.760 some of the new blue trufector states. Four states, uh 0:15:53.000 --> 0:15:57.800 now have four more states after the elections now have 0:15:58.600 --> 0:16:02.280 total blue control. Uh. So those are you know, Massachusetts 0:16:02.320 --> 0:16:05.280 and Maryland top of that list, but we're looking at Washington, 0:16:05.440 --> 0:16:10.360 We're we're getting our act together in Oregon, Illinois, New York, 0:16:10.400 --> 0:16:13.840 New Jersey area where you are, Maryland, massachusettskind of the 0:16:13.960 --> 0:16:18.320 usual suspects, um, but with Massachusetts and Maryland kind of 0:16:18.320 --> 0:16:21.760 added to that list now because of changing their leadership 0:16:21.800 --> 0:16:24.680 as well. So it's gonna be a busy year. UM. 0:16:24.720 --> 0:16:30.720 I do know that, um Um, the restaurant in you 0:16:30.760 --> 0:16:34.880 know association, National Restaurant Association, I say, are really working 0:16:35.280 --> 0:16:40.800 very well, very much in conjunction, very closely on this issue. 0:16:40.920 --> 0:16:45.000 And we're seeing a lot of uh you know, cooperation, 0:16:45.120 --> 0:16:47.320 a lot of money being spent, a lot of money 0:16:47.320 --> 0:16:50.320 being raised, and strategies put in place to really kind 0:16:50.320 --> 0:16:58.080 of bolstress going forward. And you know, it seems that 0:16:58.360 --> 0:17:02.800 SI you seems to have momentum here, but at the 0:17:02.920 --> 0:17:05.240 unit level, you know, what we're seeing is that the 0:17:05.480 --> 0:17:08.679 unionization momentum seems to have slowed at Starbucks. You know, 0:17:08.720 --> 0:17:11.240 the effort seems to be stalling here and about two 0:17:11.600 --> 0:17:14.240 seventy stores, they're not close to a C B A. 0:17:14.840 --> 0:17:17.320 You know, have the Union's lost some of the wind 0:17:17.560 --> 0:17:19.720 in their sales at the unit level or is this 0:17:19.840 --> 0:17:24.400 something that's just unique to Starbucks now? I think I 0:17:24.440 --> 0:17:28.159 think they have, you know, in the Starbucks. It's a 0:17:28.160 --> 0:17:31.720 good question and difficult want to answer. I mean, um, 0:17:31.760 --> 0:17:34.440 you know, with with an attrition rates in this industry, 0:17:34.960 --> 0:17:38.280 it's it's a no brainer for Starbucks to go into 0:17:38.320 --> 0:17:41.399 the old bean Smith four corners, you know, and just 0:17:41.440 --> 0:17:44.639 try to run the clock out on on on the process. 0:17:44.680 --> 0:17:49.439 Because you know, the first Starbucks votes were about twelve 0:17:49.480 --> 0:17:51.840 months ago. It's tweluf thirteen months ago. And if you 0:17:51.840 --> 0:17:54.000 look at those original stores, I bousically see what the 0:17:54.040 --> 0:17:57.040 turnover rates, how many of those those people that voted 0:17:57.040 --> 0:17:59.439 in that union lecture are still there? Right? Uh? And 0:17:59.520 --> 0:18:02.480 even in Starbucks and he does pretty well relative to 0:18:02.480 --> 0:18:05.960 the competitor's net space, it's still just average attrician. You've 0:18:05.960 --> 0:18:07.800 got a whole new cast of characters and in there 0:18:07.800 --> 0:18:10.080 two years later. Starbucks is smart to kind of stress 0:18:10.119 --> 0:18:13.359 the process out. They know the math um and so 0:18:13.400 --> 0:18:15.960 it has kind of dizzled a little bit. Um. But 0:18:16.040 --> 0:18:19.399 you know, it's interesting my dis your question at the 0:18:19.520 --> 0:18:23.920 unit level, it's it's fizzled a little bit. But I think, 0:18:24.040 --> 0:18:27.720 you know, like everybody's business model changes over time. Look 0:18:27.760 --> 0:18:31.320 look at look at Bloomberg's business model now versus twenty 0:18:31.400 --> 0:18:33.919 years ago. I mean night and day, right, the technology 0:18:34.040 --> 0:18:37.040 you guys are into, it's just a whole different company. Right. Similarly, 0:18:37.240 --> 0:18:40.919 the unions you know, for for fifties, sixties, seventy years, 0:18:41.400 --> 0:18:45.400 we're kind of, you know, my awfully focused on collective 0:18:45.400 --> 0:18:50.879 bargain graments c b as were the goal and and 0:18:50.920 --> 0:18:53.040 that's how you measured your success or not. How many 0:18:53.080 --> 0:18:56.920 places could you actually unionize? And over the last ten 0:18:57.000 --> 0:18:59.879 or fifteen years, I mean they have figured out, and 0:19:00.160 --> 0:19:01.960 probably more of the last five or ten years to 0:19:02.000 --> 0:19:04.240 be specific, they have figured out that they don't need 0:19:04.359 --> 0:19:07.679 c b as to win. I mean they're winning the 0:19:07.760 --> 0:19:13.600 conversation there they have they the labor community, I want 0:19:13.680 --> 0:19:16.520 the unit I'll say the labor community is a nonprofits 0:19:16.520 --> 0:19:18.439 and naturals groups, all the kind of stuff. They have 0:19:18.600 --> 0:19:20.879 won the conversation around our business model. Look at our 0:19:20.880 --> 0:19:23.240 business model now whis flat years ago? I mean, we 0:19:23.320 --> 0:19:26.160 used to laugh, we have bully laughed about fifteen bucks 0:19:26.200 --> 0:19:28.720 of that I'm crazy that was Now you can't get 0:19:28.720 --> 0:19:32.120 anybody fifteen bucks now, right, And this is happening before 0:19:32.119 --> 0:19:35.920 the pandemic. Obviously pandemic excited. But they've won the national 0:19:36.040 --> 0:19:40.959 conversation on our model. Most people don't think our business 0:19:40.960 --> 0:19:44.720 model is a great model, right, Um, And so whether 0:19:44.760 --> 0:19:48.520 it's paid leaves that they are, we're exposed in the 0:19:48.600 --> 0:19:51.560 pandemic and a lack of paid leave policies. Obviously the 0:19:51.600 --> 0:19:54.159 wage stuff is worse than from us. So they have 0:19:54.280 --> 0:19:58.320 forced so many changes to the business model this industry 0:19:58.400 --> 0:20:01.720 outside of a cb A that you know, by any 0:20:01.800 --> 0:20:05.119 means except for dues revenue they have they can be 0:20:05.160 --> 0:20:08.160 spiking their football and I don't know of any time 0:20:08.520 --> 0:20:11.840 you think about historically the relationship between the unions and 0:20:11.840 --> 0:20:14.560 the Democratic Party, you can go back and you can 0:20:14.760 --> 0:20:17.480 see George me you know, sitting at the desk of 0:20:17.760 --> 0:20:20.399 f d R right and and the unions have always 0:20:20.400 --> 0:20:23.920 had a close association with Democratic Party. But for most 0:20:24.080 --> 0:20:26.719 of the last hundred years the Democratic Party has been 0:20:26.800 --> 0:20:31.360 run by Southerners, and um, they don't have any relationship 0:20:31.359 --> 0:20:35.159 with unions. At all. The the union lack of a 0:20:35.200 --> 0:20:38.600 better term, dominance ownership of the current Democratic Party and 0:20:38.640 --> 0:20:43.160 the progressive direction of it is unprecedented. I mean they 0:20:43.200 --> 0:20:48.159 have one. They have they have literally intellectual uh control 0:20:48.480 --> 0:20:52.160 over a big swath agenda of one of the two 0:20:52.200 --> 0:20:54.959 major governing parties in the in the country. I think 0:20:54.960 --> 0:20:58.040 it's fascinating to watch. They've always been a big interest group. 0:20:58.119 --> 0:21:01.119 They've always been a big you know, every president is 0:21:01.160 --> 0:21:03.439 always addressed the NFL, A meeting everyhere, you know. I mean, 0:21:04.560 --> 0:21:07.520 but they run the show now, I mean they run 0:21:07.600 --> 0:21:09.119 the show and a bunch of states that used to 0:21:09.160 --> 0:21:11.920 be when I when I first started this industry that 0:21:12.040 --> 0:21:14.040 number one, I did it. I did it. The true story, Michael, 0:21:14.040 --> 0:21:16.280 I did an assessment when I was a Walmart Uh, 0:21:16.680 --> 0:21:19.399 how most powerful five most powerful unions need state capital 0:21:19.840 --> 0:21:23.359 and about going back, you know, twenty plus years. But 0:21:24.119 --> 0:21:26.480 in so many of them, the vast majority was the 0:21:26.560 --> 0:21:30.760 teachers Union. And now that the sd I you and 0:21:30.880 --> 0:21:34.000 some of the unions that that touch our industry the most, 0:21:34.320 --> 0:21:37.560 have resided prominence in so many state capital Sacramentos and 0:21:37.600 --> 0:21:39.880 the tip of the Iceberg, and they have really won 0:21:40.440 --> 0:21:43.160 the conversation. So it's at the unit level. You're Mike, 0:21:43.200 --> 0:21:46.640 you're my Kalent franchise d X. Your business model looks 0:21:47.080 --> 0:21:48.760 I don't know how it could look any different if 0:21:48.760 --> 0:21:51.440 you were unionized for five years ago versus not being 0:21:51.480 --> 0:21:53.560 ugunized now. It's not in a day if I and 0:21:53.680 --> 0:21:55.680 five years ago. And so they've kind of won in 0:21:55.720 --> 0:21:57.959 a lot of ways. I always say that they might 0:21:58.000 --> 0:22:02.080 have won the arbitration, but they on the conversation, Yeah, 0:22:02.080 --> 0:22:03.679 for sure. And I think part of it is is, 0:22:03.960 --> 0:22:06.600 you know, cultural right, Um, you know, I had a 0:22:06.640 --> 0:22:09.320 guest on the UH months ago saying, you know, they 0:22:09.400 --> 0:22:12.200 made unionization cool, right, And so I think that's the 0:22:12.400 --> 0:22:14.120 kind of helped them make some of the inroads at 0:22:14.119 --> 0:22:17.359 the at the union level, right. And we we have 0:22:18.040 --> 0:22:21.440 we have, you know, going back to the nineteen this 0:22:21.560 --> 0:22:26.679 is Gallup first started pulling this particular issue, union acceptance, 0:22:26.760 --> 0:22:30.159 union popularity. Never been hired there today and you know 0:22:30.200 --> 0:22:33.240