What is the Franchise Industry Saying After the State of the Union Address?

IFA obtained input from key leaders within the franchise community about what they feel Congress and President Obama should do to support the business community. Here are excerpts, but you can find the full copy here.

Clint Ehlers Franchisee, FAST SIGNS International On NLRB Joint Employer Recommendation 

“I cannot imagine what I would do if I were stripped of my independence because a different business owner, hundreds of miles away, is facing a lawsuit that has nothing to do with me. Hopefully Congress will force the NLRB to reject this flawed recommendation.”  

Herv Breault Franchisee, Philly Pretzel Factor  On Proposed Minimum Wage Increases

“Congress should pass legislation that would give incentives for companies that hire military veterans, allowing veterans to pursue their leadership, teamwork and organizational experience.”

Nancy Bigley, CFE CEO, Bottle & Bottega On Federal Proposals to Increase Minimum Wage

“I have deep concerns about the proposed wage hikes being examined at the federal level. These dramatic wage increases are going to have a negative impact on small businesses, which already operate under thin margins. ”

Brooke Wilson Multi-Unit Franchisee, TWO MEN AND A TRUCK®   On the 30-Hour-Work-Week Requirement in the Affordable Care Act

“The 30-hour definition is a major change that could have far reaching consequences we have not yet begun to see and decisions like this will lead to an increase in part-time work throughout the American economy.”

Saunda Kitchen, CFE Franchisee, Mr. Rooter Plumbing  On the need for comprehensive Tax Reform

“America’s tax-code is not working for the economy and small-business owners like me are getting lost in the complex web. Comprehensive tax reform, aimed at creating a fairer and simpler tax code for America’s franchise small-business owners, is the best way to stay competitive and create more jobs.”

IFA Survey Finds Optimism About the Economy, but Concern Over Regulation and Joint Employer Issues

Last week’s blogpost helped point out data you could use from the Franchise Business Economic Outlook: 2015 with meetings with your elected officials and policymakers to make the case for franchising. Turning to IFA’s recent Franchise Business Leader Survey, you might find these results useful in discussing some overall issues affecting today’s franchise business leaders.

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Outlook for U.S. Economy

IFA members are more optimistic about the U.S. economy in 2015 compared to their survey responses last year.  More than one-half of the franchisors and franchisees and two-thirds of the suppliers believe the economy will be “better” in 2015, compared to only 40 percent of franchisors, 15 percent of franchisees and 35 percent of suppliers who had a positive outlook last year.

However, the survey shows that 97 percent of respondents believe that the joint-employer ruling, were it to take effect, would have a negative impact on their business, with 82 percent saying the impact would be “significant.”

The Franchise Business Leader Survey also reveals concern about the enactment of discriminatory increases in the minimum wage. More than 85 percent of franchisor and franchisee members believe that recent efforts by some cities and states to increase the minimum wage will negatively impact their business. In addition, more than two-thirds of franchisors and 85 percent of franchisees reported that their businesses have already been “negatively impacted” by the Affordable Care Act. Below you’ll find how franchisees and franchisors prioritize issues affecting them:

Concerns

Visit IFA’s Franchise Labor & Workforce Hub, a new website for franchisees to provide key guidance on labor and workforce issues and join IFA’s Franchise Action Network to learn how to have a direct, positive impact on the future of the franchise industry.

 

Making the Case for Franchising Just Got Easier

Franchise businesses are expected to grow and create more jobs at a faster pace than the rest of the economy in 2015 for the fifth consecutive year.

You recently scheduled a meeting with your local lawmaker, or even better, have plans to have your elected official visit your brand’s headquarters or a local unit.  Everything is moving along great. Or perhaps you’re been invited to speak before a community group or professional organization about your franchise business. You know your brand (or brands if you’re a multi-unit, multi-brand franchisee) inside out, but how about getting some stats that highlight the overall franchise industry?

That’s where the Franchise Business Economic Outlook: 2015, released yesterday by IFA’s Educational Foundation and IHS Economics, can help.  According to the report, franchise businesses are expected to grow and create more jobs at a faster pace than the rest of the economy in 2015 for the fifth consecutive year.

Here are some key findings from the business outlook:

  • Franchise businesses will add 247,000 new direct jobs this year, a 2.9 percent increase to 8.8 million direct jobs, over last year. That is on top of the 235,000 franchise jobs that were added in 2014.
  •  The number of franchise establishments will grow this year by 12,111, or 1.6 percent, to 781,794.
  • Economic output from franchise businesses is estimated to increase by 5.4 percent over last year to $889 billion.
  • The gross domestic product of the franchise sector is projected to rise by 5.1 percent this year, which is faster than the 4.9 percent GDP increase forecasted for the economy as a whole. The franchise sector will contribute about 3 percent of the U.S. GDP in 2015.
  • The IFA Franchise Business Index— which is a mixture of employment, sales and credit conditions — also rose smartly, especially at the end of last year. In November, the index was up 3.1 percent compared to November 2013, the biggest year-over-year gain since the start of the Great Recession in 2008.
  • The outlook for growth among the different types of franchises will differ, with quick service restaurants ranking first and retail businesses ranking second in terms of increased employment.

Find the full IHS Economics report here and see the updated infographic here.

 

 

 

IFA’s 2015 Board Members Discuss What’s Ahead for the Franchise Industry

You don’t have to wait until IFA‘s Annual Convention in Las Vegas next month to find out what some of the franchise industry’s leaders think this year holds for their businesses and the industry overall. Below are excerpts from some of the 2015 Executive Committee members. Find their full comments, along with their board colleagues, in January’s Franchising World magazine. In the meantime, here’s a quick peek:

Melanie Bergeron, CFE
Chairwoman of the Board
TWO MEN AND A TRUCK/INTERNATIONAL, Inc.
Chairwoman

While I am optimistic for TWO MEN AND A TRUCK, I am very concerned about the political landscape for franchising. In the coming year we are going to need to continue the battle to protect our franchise business model from the local, state and federal levels. Please consider joining the Franchise Action Network if you haven’t already.

Aziz Hashim
President and CEO
NRD Holdings, LLC
Vice Chairman

The resilience of the franchise industry and the U.S. entrepreneur will once again shine in 2015. As the economy muddles through this unprecedented period of uncertainty, as well as consumer demographics and demands changing ever so rapidly, few industries will be as adept to managing change as the franchise industry.

Shelly Sun, CFE
CEO and Co-Founder
BrightStar Franchising, LLC
Treasurer

Looking toward 2015, the franchise industry as a whole will experience modest growth, hampered by the concern over the National Labor Relations Board joint employer impact. Without the constant impediment of government regulation, 2015 should be a solid year for the industry.

Liam Brown
President, U.S. and Canada
Select Service and Extended Stay Lodging and
Owner and Franchise Services
Marriott International
Secretary

We expect new franchise development activity to continue at a strong pace. Interest rates remain low and the industry is performing at historic highs, enabling strong underwriting of new franchise projects.

Steve Joyce
President and CEO
Choice Hotels International
Immediate Past Chairman

There have been solid gains in household employment and improvement in the labor participation rate. Job and wage forecasts indicate modest growth, which makes us optimistic for the year ahead.

Jeffrey Tews
Multi-Unit Franchisee
BrightStar Care of Madison, WI
Franchisee Forum Chairman

Providing a quality experience has created a very positive reputation in a business that relies upon trust.

Catherine Monson, CFE
CEO
FASTSIGNS International, Inc.
Franchisor Forum Vice Chairwoman

To preserve the proven, successful franchise business model, everyone in franchising must commit to grassroots advocacy/government relations involvement.

Ryan Cunningham
President
Javelin Solutions
Supplier Forum Chairman

Franchisees will need to think outside the box to find new locations, considering redevelopments of older projects, moving into newly gentrified neighborhoods or buying out mom and pop retailers.      

New Year, New Challenges, New Resources

The franchise industry, a principal job and business generator, experienced a variety of challenges in 2014 and some of them are likely to carry over into 2015. Among the issues were the redefinition of the franchisor-franchisee relationship as joint employers and assaults on the industry in the form of minimum wage increases.

You’ll soon learn what our 2015 board of directors have to say about these and other issues affecting the industry in a feature article that is part of the January issue of Franchising World magazine.  And as is the association’s practice, it will meet these challenges head on.  Educating its members, as well as lawmakers and policymakers is a primary activity.

IFA launched a new website for franchisees that provides key guidance on labor and workforce issues. The Franchise Labor & Workforce Hub serves as a resource for franchise business owners looking to learn more about current labor and workforce challenges facing employers, as well as best practices for compliance.  Members can get involved to protect the business and the franchise model by joining the Franchise Action Network.

Another important area for the association is increasing the focus on franchisee engagement. One way to foster engagement is through the introduction of a new communications tool.

The Franchisee Rundown,” a new monthly franchisee-focused IFA newsletter that was recently launched, was created to ensure that franchisees will receive a steady flow of accurate information about the industry they’re helping to build and expand.

Working together, franchisees, franchisors and suppliers can remind our audiences of the value and numerous contributions made by the franchise industry to local communities nationwide.