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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 pace. As at all times, the Worldwide Franchise Affiliation (IFA) is impartial in presidential elections and we’ll work with whoever is within the White Home for the betterment of our mannequin. Simply as we have been in Milwaukee for the RNC, we have been on the bottom in Chicago, educating candidates and campaigns about all the great franchising supplies, 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 assist the franchise enterprise mannequin and its 9M workers within the U.S. pic.twitter.com/vexxskHpuK
— IFA (@Franchising411) August 21, 2024
Like many People, 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 Alternative Agenda. It’s encouraging that one among her early commercials options her time working at McDonald’s. In truth, if elected, Harris, alongside along with her husband Doug Emhoff, will share a typical thread with the 1 in 8 Americanswho have labored at McDonald’s. To genuinely assist the franchise enterprise mannequin, listed here 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 every single place 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 practically 9 million workers who work for America’s 800,000 franchise companies (and earn greater wages and higher advantages than non-franchised workers) to the franchise house owners themselves, who’re extra numerous 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, one among labor’s prime priorities has been a joint employer rule that may 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 court docket 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 embody extending the certified enterprise earnings 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 Employees Act — which garnered overwhelming bipartisan assist within the Home this 12 months — would tremendously profit franchise house owners. This laws would improve the quantity of curiosity house owners can deduct from their earnings taxes, provide short-term bonus depreciation for the acquisition of apparatus and short-lived capital belongings and embody different pro-business and pro-worker provisions.
These actions would supply small enterprise entrepreneurs with a aggressive edge over giant firms and show 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 improve.
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Improve lending limits on the SBA
Fourth, improve lending limits on the Small Enterprise Affiliation (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 12 months, WCP is a line of credit score product that options an annual warranty price construction that works to supply better flexibility than a conventional time period mortgage to fulfill particular enterprise wants.
Accessing capital is more and more difficult in such a high-interest price setting. The SBA pitched the idea as a way of breaking down boundaries searching for to start out their very own pathway to entrepreneurship, the place the franchise mannequin is poised to proceed enjoying a serious 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 beneath evaluate by the FTC, the Franchise Rule hasn’t been up to date since 2007 — the identical 12 months the primary iPhone was launched.
Analysis printed within the Wall Road Journal confirmed it took greater than 20 years of training to grasp 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 important monetary assets in a franchise.
A Harris administration could be clever to course-correct the FTC to foster entrepreneurial improvement in franchising and double-down on the true mission of the FTC — to guard shoppers 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 occasion towards that necessary 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 items 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 planet.
