Franchise ACA Roundtable: “Changing the definition from 30 to 40 hours would be tremendous”

 

 

“Changing the definition from 30 to 40 hours would be tremendous for us,” said Dione Heusel, vice president of human resources and training for Smoothie King Franchises, according to a recent article in The Advocate.

This was the clear conclusion at a roundtable discussion on the Affordable Care Act (ACA) and our efforts to return to the traditional definition of a full-time worker under the ACA. Kelly Rogers of Two Men and A Truck, Scott Taylor of Last In Concepts, David Lewis of Express Employment Professionals, and Dione Heusel of Smoothie King joined IFA’s Matt Haller and I this week at the International Franchise Association’s (IFA) 54th Annual Convention in New Orleans to discuss the challenges franchises face with the Affordable Care Act.

The ACA has effectively changed the definition of a full-time worker from 40 hours to 30 hours by stipulating that businesses with over 50 full-time equivalents (FTE) must provide health insurance to anyone working over 30 hours a week or pay a penalty. As outlined in a report by the Hudson Institute in 2011, this provision would prohibitively raise costs, putting 3.2 million franchise workers at risk of losing hours and wages. A follow up study by Public Opinion Strategies found that 31 percent of franchise businesses have already reduced worker hours. These concerns were echoed by all participants in the roundtable.

Taylor emphasized a shift among businesses to more explicitly manage their workforce so that full-time employees work 40 hours a week and part-time employees work no more than 30 hours a week to manage costs. “Businesses are going to spend an awful lot of time trying to manage hours,” he said. “While this might reinforce good disciplining among management, it’s also not what grows companies.”

Lewis agreed, stating that variable employees want flexibility on hours and would prefer to keep their current schedules. However, the ACA’s 30-hour rule makes flexibility impossible in low margin businesses that need to closely monitor costs.

Rogers also highlighted the disincentive the 50 FTE rule. According to her, some franchisees are working to stay under the 50 FTE threshold to avoid a significant cost increase, which will reduce economic and job growth.

The IFA has advocated for a return to the traditional definition of full-time and has supported bi-partisan bills such as Rep. Todd Young’s (R-IN) Save American Workers Act, Sens. Donnelly (D-IN) and Collin’s (R-ME) Forty Hours Is Full-Time Act, and Rep. Daniel Lipinski’s (D-IL) Forty Hours Is Full Time Act. These bills would reduce costs for employees and give them the flexibility to reward good work with more hours, avoiding a rigid bifurcated labor force that does not support growth.

Some say bills like Rep. Todd Young’s Save American Workers Act, which returns the definition of full-time to the traditional 40 hours a week, will cause employers to reduce hours for those working over 40 hours a week. All participants pointed out that they are already offer benefits to those working over 40 hours a week, not because they have to, but because it is a long-term investment in talent that is essential for growing their business.

“Every business wants to have the best talent,” emphasized Smoothie King’s Heusel. “We’re a growing brand, and we have to have ‘bench strength,’ meaning we rely on our full-time employees to develop the skills, proficiency, and knowledge we need to grow our business.”

Taylor even joked that if he reduced his full-time staff’s hours to avoid offering health care, somebody else at the table would just snatch them up.

While IFA and its members see the second delay in the employer mandate as somewhat helpful, it is not the permanent fix businesses need so they can invest confidently.

Specifically, Rogers found that while the delay might be considered helpful, Two Men and A Truck franchisees are waiting for clarity on final rules so that they can best understand their cost structure. “I’ve got people sitting on capital, waiting to go into new markets, but they’re afraid to do it,” she said.

See The Advocate’s full piece HERE.

No Limit Agency and SMB Franchise Advisors raise money for VetFran

Nick Powills, CFE, founder and CEO of the full-service communications firm,No Limit Agency, came up with the idea for a dunk tank benefitting VetFran because he thought it would a fun way to build camaraderie for convention-goers at the No Limit Agency + SMB Franchise Advisors booth. The dunk tank was manned by No Limit staffers with guest appearances from clients, attendees and even some IFA team members. By the end of the convention, No Limit Agency and SMB Franchise Advisors had raised $1,085 for VetFran.

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AFC Enterprises’ Cheryl Bachelder at a Glance

Some of the best experience executives can gain comes as a result of them going through and coming out of difficult, but transitional situations.  Visionary leaders include those who are willing to share their experiences to help others advance. Bachelder, C. popeyes_5218 - may 2012

Cheryl A. Bachelder, CEO of AFC Enterprises, Inc., franchisor of Popeyes Louisiana Kitchen, provides her insights on achieving system cohesion in the November issue of IFA’s Franchising World magazine.  Bachelder, who will serve as a keynote speaker during the association’s Annual Convention in New Orleans, Feb. 22-25, 2014, will address her plans for the brand’s future and getting there.

Here are a few excerpts from the interview.

  • Revitalizing Popeyes Louisiana Kitchen

“If I had to attribute it to one thing, I would attribute it to our revitalization of our relationship with franchisees.”  Bachelder added that “It was my belief that the fundamental foundation of franchising is to have a strong, healthy and aligned relationship with the franchisee.”

  • Management Style

“I would describe my management style or my management philosophy as:   my job is to serve well those that are entrusted into my care.  And serving people well is understanding what helps them to be effective and successful and reach their goals.”

  • Leadership

“The most significant role of the leader is to seek out and understand the strengths and talents of team members and align them so that collectively, when you bring it all together, the capabilities are there for the organization to succeed.

“As a leader, whether you’re leading a restaurant, a group of restaurants or you’re a leader in a franchisor organization, I really want to encourage leaders to understand their role as being stewards of the next generation of leaders.  In our business, we essentially develop leaders for a living.”

Look for the complete interview in the upcoming November Franchising World magazine and find details on the IFA Annual Convention now. Continue reading

Franchisee Buy-in was Key to Turnaround of Hardee’s, Carl’s Jr.

 

 

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At IFA’s 53rd Annual Convention on Feb. 19, Andrew Puzder, CEO of CKE Restaurants, franchisor of the Hardee’s and Carl’s Jr. restaurant chains, told 3,600 attendees that getting buy-in for his unconventional approach to compete with larger restaurant change was a critical component of his turnaround strategy. It has been a guiding principle which has propelled the brands to 3,300 restaurants, with growth for ten consecutive years, including during the recession, and operations now in 28 countries.

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“We have a simple philosophy at CKE Restaurants:  If the franchisees make money, we all make money.  We believe we’re the most franchise friendly company around.  For over 10 years, we’ve had a Carl’s Jr. and a Hardee’s franchisee on our corporate Board of Directors,” said Puzder.

Puzder talked about how Hardee’s and Carl’s Jr. bucked the conventional wisdom in the early 2000’s with the rollout of the $6 burger for $3.99. The franchisees in the system were very concerned consumers wouldn’t pay $4 for a burger, particularly during a time when most restaurant chains were selling smaller burgers for less money.  Yet by testing the burger in a corporate store in California and demonstrating to the franchisees in the system that the product sold “off the charts,” the brand was able to roll it out nationwide.

“Being able to prove the concept in company owned markets and having the franchisees involved from the beginning were essential to making this product a success,” said Puzder.

The CKE advertising strategy also bucked the conventional wisdom. By involving franchisees in the decision-making process and explaining the rationale for targeting “Young, Hungry Guys” with famous models like Paris Hilton, the franchisees “generally, if reluctantly, went along”.

Puzder said their advertising strategy to compete with brands spending exponentially more dollars on television was to break through the clutter and generate earned media. The numbers and results speak for themselves. According to Puzder, a Kim Kardashian ad got 330 million earned media impressions, Kate Upton got over 1.5 billion in 210 countries and Nina Agdal is close to a billion.

Technology Summit focuses on Social, Local and Mobile technologies

 

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500 attendees attended the Technology Summit, which focused on Social, Local and Mobile (SoLoMo) technologies Feb. 18 during IFA’s Annual Convention.  After hearing Jesse Dwyer, head of communication and global content strategy for Global Vertical Marketing at Facebook, the audience quickly realized that their success with SoLoMo is not all about the technology but about people and keeping them happy.  Happy customers will share your story.  Jeff Fromm, EVP & Author “Marketing to Millennials” of Barkley, Inc. reinforced this point through his research of millennials which shows many of their purchasing decisions are based on the recommendations from their peers.  Brian Little, Director of Corporate Communications of Krispy Kreme explain how they implemented their SoLoMo strategy, which every aspect had to embrace Krispy Kreme’s vision; “To touch and enhance lives through the joy that is Krispy Kreme.”  While technology is important, this summit show us that the decisions of what to implement and when should be based on one thing, people. The full presentation from the technology summit can be accessed through IFA convention mobile app.