Grant Chen’s Seattle restaurant netted just $8,856.57 last year after he had to start paying a minimum wage of $11 an hour. Starbucks (SBUX) raked in about $2.8 billion.

So here’s a puzzle: How can it be that the city’s minimum-wage law puts Chen, a decidedly small-time restaurant owner, in the same large-employer category as Starbucks CEO Howard Schulz?

You might call it guilt by association. Chen, a second-generation Chinese American, pooled together retirement savings with a few friends, along with loans from family members, and used the money to buy a franchise of a fast-casual chain that could provide the stability of a familiar brand, training and procedures that wouldn’t require them to reinvent the wheel.

Yet now national chains like McDonald’s (MCD) that use the franchise model are under political and legal attack on multiple fronts. Small businesses — many of them minority-owned — are suffering collateral damage.

Under the Seattle law, and potentially to a much greater extent under New York state’s minimum-wage hike for fast-food outlets, small-business owners are being penalized for their association with large corporations that license out their brands.

Discriminating against franchises “paints the cross hairs on a disadvantaged portion of the population that utilizes the franchise model because the barriers to entry are low,” Chen wrote in a blog post. The title: “Seattle’s $15 Minimum Wage Is Driving My Restaurant Out Of Business.”