House Committee to Consider Employer Mandate Fix

On Tuesday at 10:15am, the House Committee on Ways & Means will consider legislation that would repeal the 30-hour definition of “full-time employee” in the Affordable Care Act and restore the traditional 40-hour per week definition.  H.R. 2575, the Save American Workers Act, is sponsored by Rep. Todd Young (R-IN) and has 192 co-sponsors in the House.

The Committee held a hearing on the bill last week, where IFA member and multi-unit Marriott and Hilton franchisee Peter Anastos testified on the law’s impact on his business.  Although he plans to continue to offering coverage to his existing employees who work at least 30 hours per week, he said, that may change for new employees that he hires to staff the new hotels that his company, Maine Course Hospitality Group, will open in the next 18 months.

Asked by Rep. Charles Boustany (R-LA) about the constant stream of new regulations and delays associated with the Affordable Care Act, Mr. Anastos compared ACA compliance for small business to “trying to nail Jello to a wall.”  Although the Obama Administration announced a one-year delay of the employer mandate last July, the collective weight of new costs and regulations are enough to crush small businesses that are forced to offer coverage to full-time employees or pay tax penalties.  Asked by Rep. Boustany if his business is facing uncertainty as a result of the law’s implementation, Mr. Anastos bluntly replied, “that’s the understatement of the year.”  Click the thumbnail below to view a video excerpt from Mr. Anastos’ testimony.

To take action on this important issue by emailing your Representative, click here to visit IFA’s grassroots action center, www.FranchisingVotes.com.

IFA Applauds Court Decision Striking Down Swipe Fee Rule

The IFA applauded U.S. District Court Judge Richard Leon’s decision today to throw out the debit swipe fee cap rule limiting the fees that banks receive from merchants when customers use their debit cards.  The IFA has lobbied aggressively alongside a broad range of other businesses for a more competitive and transparent card system that works better for consumers and merchants alike.

“We applaud the Court’s decision to invalidate a misguided rule granting banks and credit card companies a windfall of billions of dollars while saddling the nation’s franchise small businesses with drastically increased operating costs,” said IFA President and CEO Steve Caldeira.  “We look forward to seeing a revised rule from the Federal Reserve that both restores normal interchange fee levels and establishes reasonable caps.”

The overturned Federal Reserve rule was prompted by an amendment to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act sponsored by Sen. Dick Durbin (D-Ill.)  Judge Leon ruled that the Fed misinterpreted the intent of the Durbin Amendment, which directed the Fed to consider the costs that banks incur when setting the fee standard.  The court ruling will remain in place until the Fed can agree on provisional standards or replace portions of the rule entirely.

Franchisers, Lenders Huddle at Denver Lending Boot Camp

On Tuesday, the IFA, the Denver Franchise Business Network (FBN), Faegre Baker Daniels LLP and FRANdata hosted a Franchise Lending Boot Camp in Denver to educate franchise leaders and lenders on the ways to increase small business lending in the recovering economy.  According to the Small Business Lending Matrix & Analysis, Vol. 5, produced for IFA by FRANdata in April, lending to America’s franchise businesses will reach $23.9 billion in 2013, the highest level since the recession, yet will still fall short of demand.  Access to capital has remained an important issue for franchise owners throughout the recovery.

 

Stephen Olear, Chief Franchise Council in the Los Angeles office of the U.S. Small Business Administration (SBA), addressed attendees on ways the SBA is working to increase lending to small businesses in general and franchises specifically.  Because of the unique partnerships between franchisors and franchisees, and the stability the franchise model provides, franchise owners generally make good loan candidates.  Olear announced that a new pilot program has launched this year to pre-approve more franchises for SBA-guaranteed loans by making updates to SBA procedures and to the SBA Franchise Registry.  Edith Wiseman, Exec. VP of Client Solutions at FRANdata, spoke about the registry and its role in helping connect franchises and lenders.

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Steve Olear of the U.S. Small Business Administration addresses Franchise Lending Boot Camp participants in Denver.

A group of franchisors engaged in a panel discussion entitled: “How We Get Our Franchisees Financed.”  Panelists included Greg Esgar of Massage Envy, Rachel Williams of Mrs. Fields Famous Brands, and Reginald Heard of Focus Brands.  The franchise executives discussed strategies for making their franchisees more loan-ready, and their efforts to help franchisees secure financing during the depths of the recent recession.

 

Following the presentation from the franchisors, a group of lenders shared their insights on what makes great financing candidates, and how businesses can better prepare themselves to apply for financing.  Among the lending panelists were Julie Huston of U.S. Bank, Dave Otteson of BBVA Compass, and Ken Allen of Evolve Bank & Trust.

 

Attendees later gathered for a reception and dinner at the Denver Country Club, where participants mingled and shared what they learned.  Olear again addressed the group to review the progress that has been made in the past few years on increasing lending to small businesses, and applauded the collaboration of the franchise and banking industries in their hard work to improve the lending environment for all.

Capital Area Franchise Association Explores ACA Employer Requirements, Action Plans

The Capital Area Franchise Association (CAFA) held its monthly networking lunch this week that included an informative panel on the Affordable Care Act (ACA) and steps employer can take to prepare for compliance in 2014.  The overwhelming consensus: if you haven’t already started preparing, you should.

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CAFA, a network of franchisees and franchisors in the DC, Maryland and Virginia areas, hosted the event in Tyson’s Corner, VA and assembled a panel comprised of four unique perspectives.  A franchisee, a franchisor, an accountant and an insurance broker contributed to the panel to clarify some of the ACA’s more confusing provisions and describe what effective action plans look like.

Chris Frye, a Virginia-based CPA with Yount, Hyde & Barbour, explained that effective ACA planning involves making a string of strategic decisions, and that business owners should make these decisions while surrounded by trusted advisors.  Mark Carrier, President of the Maryland multi-unit hotel franchisee B.F. Saul Company Hospitality Group, added that no business will be unaffected the employer mandate.  Although some businesses may not be required to provide coverage to employees, every business will see changes to the way they operate.  CAFA President Joe Caruso stressed the need for prompt action on ACA compliance, with open enrollment for state exchanges beginning in October 2013.

As compliance deadlines approach, franchise owners need resources and materials to begin understanding how the employer mandate will impact their businesses.  IFA’s new website, www.MakingSenseofHealthCare.org, contains tools and information for employers to determine which aspects of the employer mandate they are responsible for complying with, testimonials from franchise industry leaders about how they are adjusting their business and workforce to comply with the law, and an interactive feature to chat with IFA government relations staff in real-time to answer questions about the law.  The site is sponsored by the Hylant Group.

The Time is Now: Start Preparing for the Employer Mandate

This time next year, the major provisions of the Affordable Care Act, including the individual and employer mandates, will be in full effect.  Even earlier, in October of this year, the first Health Insurance Marketplaces will open.  2014 will see tax hikes, regulations, paperwork, and headaches for franchise small business owners across the country.

The 2013 IFA Convention in Las Vegas will feature a session entitled “The Health Care Law and Your Business: What You Need to Know.”    Hear the perspective of a multi-unit franchisee, a health care policy expert, and a veteran insurance broker in a terrific panel that will explore the ACA’s impact on franchising, the most newest health care regulations, and how franchise owners can prepare for 2014.

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To expand its education efforts surrounding the ACA, IFA is offering to help franchise companies host webinars on ACA employer requirements for franchisees and other stakeholders.  These hour-long sessions include information on key definitions, tax penalties, communications strategies and other topics as well as a Q&A session with a health care expert from Washington Council Ernst & Young.  For more information on this member service, please contact IFA’s Kevin Serafino at kserafino@franchise.org.