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The 5 weeks between the Republican and Democratic conventions might have been a lifetime, as a brand-new Democratic ticket shaped in file pace. As all the time, the Worldwide Franchise Affiliation (IFA) is impartial in presidential elections and we are going to work with whoever is within the White Home for the betterment of our mannequin. Simply as we had been in Milwaukee for the RNC, we had been on the bottom in Chicago, educating candidates and campaigns about all the nice franchising gives, particularly for minority-owned companies.
Extra highlights from championing franchising with lawmakers in Chicago on the #DNC2024. IFA is proud to work with members throughout the aisle on insurance policies that help the franchise enterprise mannequin and its 9M workers within the U.S. pic.twitter.com/vexxskHpuK
— IFA (@Franchising411) August 21, 2024
Like many Individuals, the franchise neighborhood is all in favour of studying extra about Vice President Harris’ imaginative and prescient and coverage priorities, which she characterised in her acceptance speech as an Alternative Agenda. It’s encouraging that certainly one of her early commercials options her time working at McDonald’s. Actually, if elected, Harris, alongside together with her husband Doug Emhoff, will share a typical thread with the 1 in 8 Individuals
who’ve labored at McDonald’s. To genuinely help the franchise enterprise mannequin, listed below are 5 concrete methods Vice President Harris can attraction to the franchise neighborhood.
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Be a champion for franchising
First, Vice President Harris must be a champion for franchising and use every single day on the marketing campaign path to go to franchises and meet their workers in swing states — and in all places in between. Doing so will unlock franchising as a element of the Alternative Agenda, together with the distinctive advantages of franchising for all stakeholders concerned within the mannequin.
These stakeholders are substantial — from the almost 9 million workers who work for America’s 800,000 franchise companies (and earn larger wages and higher advantages than non-franchised workers) to the franchise house owners themselves, who’re extra various in race and gender than non-franchises.
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Abandon an expanded joint employer rule
Second, Vice President Harris talked on the DNC about working with enterprise and labor. But, certainly one of labor’s prime priorities has been a joint employer rule that will successfully destroy franchising. A Harris administration that wishes to help small enterprise creation should abandon efforts to implement an expanded joint employer rule.
Bipartisan majorities in congress and a federal courtroom have rejected increasing the joint employer check to incorporate reserved and oblique management. Even Democratic supermajorities within the California legislature, and her home-state Governor Gavin Newsom, rejected joint employer legal responsibility. This created a pathway to barter a invoice with organized labor that preserved franchisee fairness of their enterprise, and creating predictable will increase within the minimal wage.
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Name for pro-small enterprise tax insurance policies
Third, Vice President Harris ought to name for pro-small enterprise tax insurance policies, given the expired and expiring provisions of the Tax Cuts & Jobs Act (TCJA). These embrace extending the certified enterprise revenue deduction (QBID), also referred to as the part 199A deduction, and restoring a pro-growth curiosity deductibility normal that expired on the finish of 2022.
Extending the 199A deduction, together with passing the bipartisan Tax Reduction for American Households and Staff Act — which garnered overwhelming bipartisan help within the Home this yr — would tremendously profit franchise house owners. This laws would enhance the quantity of curiosity house owners can deduct from their revenue taxes, provide short-term bonus depreciation for the acquisition of kit and short-lived capital belongings and embrace different pro-business and pro-worker provisions.
These actions would offer small enterprise entrepreneurs with a aggressive edge over massive firms and exhibit that Vice President Harris is dedicated to addressing the wants of the small enterprise neighborhood. She will be able to chart a brand new path and lengthen an open hand to the enterprise neighborhood by placing the politics apart and decide to extending a coverage they’ve come to depend on. With out motion, each enterprise proprietor in nation wakes up on January 1, 2026, going through a tax enhance.
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Enhance lending limits on the SBA
Fourth, enhance lending limits on the Small Enterprise Affiliation (SBA) and increase entry to the 7(a) Working Capital Pilot (WCP) program. Throughout her acceptance speech, Harris pledged to, “present entry to capital for small-business house owners and entrepreneurs and founders.” Launched earlier this yr, WCP is a line of credit score product that options an annual warranty price construction that works to supply higher flexibility than a standard time period mortgage to satisfy particular enterprise wants.
Accessing capital is more and more difficult in such a high-interest price surroundings. The SBA pitched the idea as a way of breaking down limitations searching for to start out their very own pathway to entrepreneurship, the place the franchise mannequin is poised to proceed enjoying a serious position.
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Define a future for the Federal Commerce Fee
Lastly, Harris ought to define a future for the Federal Commerce Fee (FTC) that features a modernization of the Franchise Rule, a federal regulation solely enforced by the FTC that governs the sale of a franchise. At the moment beneath evaluation by the FTC, the Franchise Rule hasn’t been up to date since 2007 — the identical yr the primary iPhone was launched.
Analysis revealed within the Wall Avenue Journal confirmed it took greater than 20 years of training to know a Franchise Disclosure Doc (FDD), and a federal investigation discovered many potential franchisees didn’t learn the disclosures in any respect. This wants to vary, particularly throughout the pre-sale course of when a potential franchisee is deciding whether or not to speculate vital monetary sources in a franchise.
A Harris administration can be sensible to course-correct the FTC to foster entrepreneurial growth in franchising and double-down on the true mission of the FTC — to guard customers and potential franchisees. The franchise enterprise mannequin encourages workforce growth and small enterprise formulation in native communities, we look ahead to working with any administration and any political social gathering towards that essential objective.
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Matt Haller is the President and CEO of the Worldwide Franchise Affiliation (IFA). Greg Flynn is the Founder, Chairman, and CEO of Flynn Group and Flynn Properties, and an IFA Board Member. With 2,700+ Applebee’s, Taco Bells, Paneras, Arby’s, Pizza Huts, Wendy’s and Planet Health models producing $4.7+ billion in gross sales and using 75,000+ individuals in 44 states and three international locations, Flynn Group is the biggest franchise operator on the planet.
