After a Hampton Inn hotel in Minneapolis allegedly denied reservations to federal immigration agents on principle last week, President Donald Trump’s Department of Homeland Security put a massive hotel conglomerate on blast.
“@HiltonHotels has launched a coordinated campaign in Minneapolis to REFUSE service to DHS law enforcement,” the agency posted on X, prompting a right-wing dogpile on the company.
It didn’t matter that Hilton insisted it didn’t own the property, and that its franchisee, a company called Everpeak Hospitality, would have been responsible for canceling the agents’ reservations. After a conservative influencer posted a video suggesting the no-DHS-reservations policy was still in place, Hilton announced on Tuesday that it was cutting ties with Everpeak.
“We are also engaging with all of our franchisees to reinforce the standards we hold them to across the system to help ensure this does not happen again,” the company said in a statement.
It’s understandable if Hilton felt blindsided by the administration. After all, powerful franchise brands are used to the president seeing things their way.
Ever since his first presidency, Trump has been a big booster for the franchise model. Smaller companies like Everpeak run the day-to-day operations while paying big companies like Hilton to use their names, systems and business formulas. The model has come under fire for the way it can shift legal responsibilities away from the McDonald’s of the world and put it on their franchisees.
The brands at the top maintain that due to the franchise arrangement, they aren’t responsible for working conditions — including when workers are victims of wage theft — and shouldn’t have to bargain with a union. Trump’s labor appointees over the years have generally subscribed to this thinking and worked to undo progressive reforms aimed at holding the big brands accountable.
When Trump addressed a franchise summit hosted by McDonald’s last fall, he even boasted about how he’d killed former President Barack Obama’s “joint employer” rule. The Obama-era regulations could have put brands like McDonald’s on the hook for labor violations or forced them to the table to negotiate with unions, on the grounds they were the ones setting the working conditions. “You were screwed,” Trump said, implying he’d saved the franchise model.
But pillorying Hilton over a local franchisee’s reservation discretion would seem to undermine the notion that franchisees are really independent operators setting their own policies. (Before Hilton announced it had cut ties, Everpeak publicly apologized and said it had “moved swiftly to address this matter.”)
Matt Haller, the CEO of the International Franchise Association, the industry’s leading lobby, took to X on Monday to call the Minneapolis situation a “teachable moment for everyone today about how the franchise business model works.”
“Hilton is not the direct employer,” Haller said. “They license the brand to this franchisee to operate hotels under its brand.”
Asked who the administration ultimately views as responsible for the reservation denials — Hilton or its franchisee — a DHS spokesperson didn’t say. But in a statement, the agency said it was pleased to see Everpeak Hospitality kicked to the curb.
“We are glad to see Hilton Hotels take this step,” spokesperson Tricia McLaughlin said.