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.
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.
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.
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 email@example.com.
On Tuesday, the U.S .Small Business Administration (SBA) announced that its loan programs had reached its second-highest total ever for loan dollars in a fiscal year during FY 2012. SBA reported that its approvals supported $30.25 billion in 53,848 loans to small businesses as a part of its two major loan programs, 7(a) and 504. The total was only slightly lower than the FY 2011 total of $30.5 billion and much higher than the FY 2010 total of $22.6 billion.
According to SBA, a driver of the lending pace was the temporary 504 refinancing program, which accounted for 34 percent of the $15.09 billion in loan volume in the 504 program. The refinancing program was a temporary provision under the Small Business Jobs Act passed in 2010, and expired on September 27.
Although there is still a significant demand for small business lending, this news is an encouraging sign that franchise small business owners are getting the capital they need to expand and open new locations. SBA also reported that nearly 1,300 lenders returned to SBA lending, highlighting the increasing eagerness of banks to support small businesses as an engine of economic growth and recovery.
To read the SBA’s press release announcing the FY 2012 loan statistics, click here.
President Barack Obama and Republican presidential nominee and former Massachusetts Governor Mitt Romney met in a head-to-head debate for the first time last night at the University of Denver, kicking off a series of three presidential debates in the weeks leading up to the November 6 election. Gov. Romney appeared energetic and motivated on stage, aggressively challenging the President’s economic record and attempting to rise above the criticism that has grown more intense in the past two weeks. On the other hand, by most accounts, President Obama delivered an underwhelming performance. Although analysts and commentators quickly and emphatically declared Romney the Round 1 winner for both his polished arguments and delivery, it was the exposure of the rift between the candidates’ tax plans that commanded the most attention during the 90-minute ideological clash.
All Big Bird jokes aside, the tax discussion took on a serious and contentious tone, which culminated in the candidates overpowering moderator Jim Lehrer to get in a few extra minutes debating the topic. Although President Obama attempted to characterize Gov. Romney’s tax plan as a $5 trillion tax break for upper-income individuals, Romney firmly reiterated that his tax plan would increase revenues by increasing economic activity through lower tax rates for small businesses and the lower class. The President’s plan, Gov. Romney pointed out, threatens to raise taxes on small business owners that file their business taxes on their personal returns, punishing the entrepreneurs that are the engine of the American economy.
CNN Money published an article today explaining how the President’s tax plan, while attempting to tax upper-income Americans, has the unintended consequence of the tax hike for two of the upper-income brackets. Since more than 80 percent of franchise businesses file their business income on their personal income tax return, Obama’s proposal has the potential to raise taxes on franchise small business owners that are already burdened by tax uncertainty.
For more information on differences between the Obama and Romney platforms and their implications for franchising, click here. You can also submit feedback and questions to IFA through our mobile app, “Franchising Votes”, or at firstname.lastname@example.org.
Michigan House Bill 5465 was introduced this March and was dormant until two weeks ago, when a hearing was suddenly scheduled for last Wednesday. If enacted, the bill would have granted franchisees a wide latitude in choosing vendors of “equipment, fixtures, supplies and services” in the operation of their businesses. IFA helped mobilize a coalition of various business groups including the Michigan Restaurant Association, Michigan Chamber of Commerce, and Michigan Retail Association to oppose the legislation.
IFA’s Director, State Government Relations, Public Policy & Tax Counsel Dean Heyl traveled to Lansing and testified before the House Regulatory Reform Committee against the bill. Members of the Committee universally understood the need for consistency in a customer’s experience when patronizing a franchise, whether it be eating at a restaurant or staying at a hotel and that this bill would have put a franchise’s brand integrity at risk.
The Chair of the Committee said that there were no foreseeable plans to have a vote on the bill.
The defeat of House Bill 5465 is significant win for the franchise industry. IFA has always taken the position that the occasional disagreements that arise between franchisees and franchisors should be resolved between the parties and not through legislation that will have the likely result of encompassing other franchisees and franchisors not involved with the original dispute.