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The 5 weeks between the Republican and Democratic conventions may have been a lifetime, as a brand-new Democratic ticket fashioned in report velocity. As at all times, the International Franchise Association (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 great franchising offers, particularly for minority-owned businesses.
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 assist the franchise enterprise mannequin and its 9M staff within the U.S. pic.twitter.com/vexxskHpuK
— IFA (@Franchising411) August 21, 2024
Like many Individuals, the franchise neighborhood is excited about studying extra about Vice President Harris’ imaginative and prescient and coverage priorities, which she characterised in her acceptance speech as an Opportunity Agenda. It’s encouraging that certainly one of her early commercials options her time working at McDonald’s. The truth is, if elected, Harris, alongside along with her husband Doug Emhoff, will share a typical thread with the 1 in 8 Americans
who’ve labored at McDonald’s. To genuinely assist the franchise enterprise mannequin, listed here are 5 concrete methods Vice President Harris can enchantment to the franchise neighborhood.
Be a champion for franchising
First, Vice President Harris must be a champion for franchising and use on daily basis on the campaign trail to go to franchises and meet their staff in swing states — and in all places in between. Doing so will unlock franchising as a part of the Alternative Agenda, together with the distinctive advantages of franchising for all stakeholders concerned within the mannequin.
These stakeholders are substantial — from the practically 9 million staff who work for America’s 800,000 franchise businesses (and earn larger wages and higher advantages than non-franchised staff) to the franchise house owners themselves, who’re extra various in race and gender than non-franchises.
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 might successfully destroy franchising. A Harris administration that desires to assist 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 take a look at 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 minimum 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 called 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 Relief for American Families and Workers Act — which garnered overwhelming bipartisan assist within the Home this yr — would drastically profit franchise house owners. This laws would enhance the quantity of curiosity house owners can deduct from their revenue taxes, provide momentary bonus depreciation for the acquisition of kit and short-lived capital property and embrace different pro-business and pro-worker provisions.
These actions would offer small enterprise entrepreneurs with a aggressive edge over massive companies and display 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 prolong 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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Improve lending limits on the SBA
Fourth, enhance lending limits on the Small Business Association (SBA) and enhance 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 charge 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 rate surroundings. The SBA pitched the idea as a method of breaking down boundaries looking for to start out their very own pathway to entrepreneurship, the place the franchise mannequin is poised to proceed taking part in a significant function.
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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. Presently below assessment by the FTC, the Franchise Rule hasn’t been updated since 2007 — the identical yr the primary iPhone was launched.
Analysis printed within the Wall Street Journal confirmed it took greater than 20 years of schooling to know a Franchise Disclosure Document (FDD), and a federal investigation discovered many potential franchisees didn’t learn the disclosures in any respect. This wants to alter, particularly through the pre-sale course of when a potential franchisee is deciding whether or not to speculate important monetary assets in a franchise.
A Harris administration can be sensible to course-correct the FTC to foster entrepreneurial improvement in franchising and double-down on the true mission of the FTC — to guard customers and potential franchisees. The franchise enterprise mannequin encourages workforce improvement and small enterprise formulation in native communities, we look ahead to working with any administration and any political get together towards that essential aim.
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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+ folks in 44 states and three nations, Flynn Group is the biggest franchise operator on the earth.
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