I was looking through my Google Alerts the other day and came across an alert to a site promoting a download link to a Franchising World article. I clicked the link to see what it was and was immediately blocked by our antivirus program with a message that the link led to a website that contained malicious code.
Not surprising…and for the umpteenth time that day I was very thankful for antivirus software.
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.
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.
Yesterday, the Health Subcommittee of the House Committee on Ways & Means held a hearing to examine the one-year delay of the Affordable Care Act’s employer mandate. Last Tuesday, the Administration announced that it would be delaying the implementation until 2015. In his opening remarks, Subcommittee Chairman Kevin Brady (R-TX) expressed the Subcommittee’s concern with the Affordable Care Act’s employer mandate and the way the announcement was made by the Administration. Chairman Brady also mentioned the consequences of the employer mandate for small businesses, saying that 3.2 million full-time jobs were at risk in the franchise industry alone.
Sean Falk, an IFA member and multi-unit franchisee of Mrs. Fields Cookies, Great American Cookies, PretzelMaker and Salsarita’s Fresh Cantina, was among the witnesses to testify before the Subcommittee on behalf of IFA. In his prepared remarks, Mr. Falk emphasized the concerns he and the franchise community had with the Affordable Care Act’s employer mandate. He applauded the Administration for delaying the implementation of the employer mandate, but made it clear that “it does not solve the fundamental problems associated with the ACA and its impact on business operations and future job growth.” Click the thumbnail above to view a video of Mr. Falk’s testimony.
Mr. Falk testified that the mandate places a massive regulatory burden on his businesses and other franchise small businesses, stating that, “navigating the constant changes, waivers, extensions, regulations and clarifications of an already cumbersome law has diverted my focus from developing my business and creating new jobs.” Mr. Falk also noted that two specific changes to the employer mandate would go a long way to help franchise small business owners implement the law: increasing the 30-hour threshold that qualifies an employee as full-time to 40 hours a week; and increasing the 50 full-time equivalent employee threshold that requires employers to provide coverage to full-time employees.
Many of the Committee members commended Mr. Falk in his efforts to try and navigate the complexities of this law, like Congressmen Tom Price (R-GA) and Mike Kelly (R-PA). Chairman Brady concluded the hearing by thanking the witnesses and announcing a second hearing on the same subject. Next Wednesday, J. Mark Iwry, Senior Advisor to the Secretary and Deputy Assistant Secretary for Retirement and Public Policy at the U.S. Department of the Treasury will testify at the Subcommittee’s second hearing to examine the employer mandate delay.
Later that day, IFA hosted a members-only webinar to further address the challenges franchise business owners face in implementing the employer mandate. After a brief update on advocacy from IFA’s Senior Vice President, Government Relations & Public Policy Judith Thorman, insurance industry veterans Andria Herr and Holly Wahl with IFA Supplier Member Hylant Group, an insurance brokerage with decades of experience working with the franchise industry, provided insight on the types of plans available to large and small employers alike. Click herefor a recording of the webinar.
Sean Falk appeared on CNBC to discuss how small business owners are concerned about the delay of the employer mandate:
Recently, legislation was introduced in both the House and Senate that would change the definition of a full-time employee from an average of 30 hours per work to 40 hours per week. Rep. Todd Young (R-IN) introduced the house version, H.R. 2575, and a companion bill, S. 1188, was introduced by Senators Susan Collins (R-ME) and Joe Donnelly (D-IN).
Under the ACA, employers must provide health insurance coverage to full-time employees and their dependents or face significant penalties. The House bill, entitled the Save American Workers Act, was introduced with 113 co-sponsors including the Chairman of both the Ways & Means and Education & Workforce Committees. IFA worked to draft the legislation with Rep. Young’s staff and secured a majority of the original co-sponsors for the introduction of H.R. 2575. Passage of this legislation is a priority for IFA and we will continue to lobby and educate both sides of the aisle on the need for this change.
The IFA is pleased with last week’s announcement by the Obama Administration to delay implementation of the Affordable Care Act’s (ACA) employer mandate and reporting requirements until 2015, but urges more relief for small businesses.
Before and after the law passed, the IFA has been relentless in meeting with key officials at the SBA, including administrator Karen Mills, the White House, including Senior Advisor and Assistant to the President for Intergovernmental Affairs and Public Engagement Valerie Jarrett, former domestic policy advisor Melody Barnes and the current advisor Cecilia Muñoz, former senior treasury advisor Gene Sperling, who is now the director of the National Economic Council, former healthcare advisor Nancy-Ann DeParle, as well as, Jeanne Lambrew, deputy director of the new White House Office of Health Reform, Mark Iwry Senior Advisor to the Secretary of the Treasury and Deputy Assistant Secretary (Tax Policy) for Retirement and Health Policy and Sol Ross, Director of Business Outreach at the Department of Health and Human Services.
The Administration announced that the delay has two goals: to allow regulators to consider ways to simplify the new reporting requirements consistent with the law and to provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees. The IFA will carefully review the changes and offer additional recommendations to improve the law and will not let up on our efforts to change the definition of a full-time employee from 30 to 40 hours.
See below for media hits on IFA’s statement regarding last week’s delay:
Politico: “We are glad the administration listened to the concerns of businesses. Our members need more time to figure out how the law applies to them — and to get ready for it. We don’t want to forget there are significant changes needed in the law, so long term we are still going to pursue those.” – IFA’s SVP Government Relations & Public Policy, Judith Thorman
National Journal: “We applaud the administration for responding to our repeated requests to provide relief from the implementation of the Affordable Care Act. This will relieve the onerous and costly burdens of the ACA for one year, and allow the administration to reexamine its implications for small businesses.”– IFA President and CEO, Steve Caldeira
Washington Post: “We need to make sure that we don’t forget that this is still a problem. There is still the definition of [what constitutes] a full-time employee that we’re going to try and pursue. That’s a significant issue for us.” – IFA’s SVP Government Relations & Public Policy, Judith Thorman
The Hill: “We definitely did not expect this; there was a lot of pressure. The law goes into effect in January, and all the regs aren’t out. Employers and employees were confused.” – IFA’s SVP Government Relations & Public Policy, Judith Thorman
Politico: “Honestly, it was a surprise that it came this quickly. We certainly felt like we were making headway, but we didn’t get any hints until yesterday.” – IFA’s VP Public Affairs and Chief of Staff to the CEO, Matt Haller