Payroll tax deal inked, is comprehensive tax reform next?

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The President today signed into law an extension of the payroll tax cut for employees, meaning the 2 percentage point reduction in the tax will be extended through the end of the year. The payroll tax funds Social Security and extends unemployment benefits for Americans who have been out of work for an extended period of time. Congress overwhelmingly passed the $143 billion measure on Friday. 

In signing the extension, President Obama said that Congress “did the right thing” by extending payroll tax cuts for millions of Americans.

According to the White House, President Obama will now seek to find additional issues where Congress can agree, despite the conventional wisdom that the elections in November will make bargaining difficult. 

Whether that includes an effort to undertake comprehensive tax reform or to allow the current Bush-era tax rates to expire remains to be seen. IFA believes the President’s 2013 budget proposal would raise taxes and hold back job creation and that franchise businesses need the certainty of comprehensive tax reform rather than the piecemeal approach of corporate tax reform that does not address individual tax reform.

An IFA survey of franchise businesses shows franchise growth would be significantly impacted by the President’s budget proposal. In the survey, 88 percent of franchisors and 73 percent of franchisees indicated that higher tax rates on households earning more than $250,000 per year will negatively impact their business. More than 40 percent and 25 percent, respectively, say the impact will be significantly negative.

Following the bill signing today, IFA President & CEO Steve Caldeira released the following statement applauding the extension, yet calling on Congress and the Administration to find agreement on comprehensive tax reform to provide the certainty America’s small business owners need to put the country on a sustainable path to long-term growth. 

“The International Franchise Association applauds Congress and the President for working together to pass an economic package that will send some short-term tax certainty through 2012 to the nation’s small business owners. While passing the payroll tax extension is important, the new law does not address the more pressing need for comprehensive tax reform at both the corporate and individual levels, which unlike the payroll tax extension, would not contribute to the mounting federal debt, but rather enable consumer confidence, spending, job creation and the economic growth our country so urgently needs.

“IFA will continue to diligently press Congress and the Administration for the need to implement comprehensive tax reform that lowers both corporate and individual rates. The franchise industry, which is comprised of 825,000 franchise establishments and supports nearly 18 million jobs, looks forward to working with Members of Congress and the Administration in developing pro-growth policies, including comprehensive tax reform that will create jobs and help speed up the economic recovery.”  

Posted by Matt Haller, IFA Sr. Director of Communications

NBA All-Star Attends Taste of Franchising at IFA’s Convention

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At the always widely-anticipated Taste of Franchising reception last night, IFA convention attendees mingled and munched on tasty treats from a vast array of franchised food concepts connecting with old friends and colleagues and making new acquaintances.


Amid the crowds cowering for a taste of wings, burgers, pizzas, cake, cookies, ice cream and more, a larger-than-life surprise guest appearance turned the ballroom into a tizzy of flash bulbs as Shaquille O’Neal entered the room. Never he to be shy, Shaq, the perennial NBA All-Star, made his way through the throngs of fans to the Original Soupman booth where he posed for photos and served up shots of soup specialties from the emerging franchise, of which he is an investor.

Missed the IFA Financial Summit? Relive it with the WSJ’s live blog coverage

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Link: Missed the IFA Financial Summit? Relive it with the WSJ’s live blog coverage

The first panel at the IFA’s Financial Summit was live-blogged over at the Wall Street Journal’s Small Business page, so if you missed any of the lively discussion about the biggest challenge facing franchise businesses in 2012 – credit access – head on over and read this recap. In addition to the WSJ’s Small Business reporter Emily Maltby, the panel featured IFA President & CEO Steve Caldeira, IFA Credit Access Task Force Chairman Bill Hall (a Dairy Queen franchisee), Ron Feldman, CEO of Franchise America Finance, Mary Jo Larson, Publisher, Franchise Times; and Darrell Johnson, President & CEO, FRANdata.

The panel was a preview of IFA’s second Small Business Lending Summit, which will be held in Washington on April 17. While lending has loosened somewhat in 2012, the franchise industry is still not back to where it was in terms of growth rates before the recession, so stay-tuned for more action in the coming months about steps the IFA is taking with its partners in the Small Business Lending Campaign to spur franchise small business lending. 

Posted by Matt Haller, IFA Sr. Director of Communications

Franchise Business Leaders Give Veterans a Helping Hand

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More than 100 franchisees and franchise executives from brands such as Cinnabon, Schlotsky’s, Corner Bakery, Firehouse Subs, McDonald’s, Molly Maid, Orlando-based U.S. Lawns, Great American Cookie Company, the Dwyer Group, PostNet, KFC, Taco Bell and more spent several hours Friday volunteering at the Orlando Health & Rehabilitation Center as part of the International Franchise Association’s inaugural Franchising Gives Back event.

The participants took a dilapidated area of the rehab center’s grounds and turned it into “Veterans Park,” or what Joyce Pope, Director of Volunteer Services at the Center dubbed, “the completion of a dream for the Center’s 50th anniversary,” which will be celebrated in November.


“We want this park to be a place where our celebration takes place in November and we are grateful for these business leaders for helping us see it through to completion,” said Pope.

The IFA, which is in Orlando through Tuesday for its annual Convention, brings more than 3,000 franchise executives, franchisees and industry suppliers from around the world. A large focus of this year’s gathering is focused on improving the employment situation for veterans, which face challenges as they reenter the civilian work force.

“The franchise industry is committed to helping those who served for us overseas,” said IFA President & CEO Steve Caldeira. “The Franchising Gives Back event was a natural extension of the work our industry does in their local communities every day, and we are proud to support our nation’s veterans through events like today, in addition to our longstanding commitment to offering veterans opportunities for employment and franchise ownership.”


More than 66,000 veterans are franchise business owners today, according to the U.S. Census, and the IFA has committed to helping increase that number in the coming years. The organization participated in an announcement on Veterans Day in Washington, D.C. with First Lady Michelle Obama to make the largest private sector veteran hiring commitment as part of the Joining Forces Initiative, which is led by Obama and Dr. Jill Biden.

Hands On Orlando coordinated the event for the IFA. In addition to meeting with Center residents, participants laid thousands of pounds of concrete for a sidewalk, built tree boxes and planters, planted shrubbery, placed mulch and sanded and painted an entranceway to the Center.

“Residents here will see a transformational difference in their campus and as they come outside for the next 10 or 15 years,” said Chris Allen, who runs Hands On Orlando. 


SNEAK PEEK: What to expect in Yum! Brands CEO David Novak’s speech at IFA’s Convention

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David Novak, chairman and CEO of Yum! Brands, Inc., will address IFA’s Annual Convention on Feb. 13 about his brands’ growth overseas. Yum! Brands includes more than 36,000 KFC, Pizza Hut and Taco Bell restaurants in more than 117 countries and territories and 1.4 million company and franchise associates. Here are a few excerpts from his upcoming interview in April’s Franchising World magazine.


On recent achievements

“We’re very excited about 2012. We expect to continue to grow our presence around the world. Our goal is to achieve at least 10 percent earnings per share growth every year. We’ve done at least 13 percent for at least the last 10 years. The main goal that we have this year is to make 2012 the year for Taking People With You for operational excellence. I’ve written a book [Taking People With You: The Only Way to Make BIG Things Happen] and the exciting thing we’re doing in our company is we’re taking the book and we’ve created training guides that will go to all our franchisees and all of our restaurant managers around the world and it will be translated into 11 different languages.”

More than a book on leadership principles

“Well, I think a lot of books deal with general leadership principles and this book is more than a book on principles. It’s a book on how to actually make it happen. it’s a book on the core process of leadership and execution. Because no one can get anything done by themselves of any significance.”


Taking people with you

“Our formula for success is you build the people capability first, then if you have really capable people and outstanding leadership, you will satisfy more customers and then you make more money. And yes, of course, everyone wants to make more money, but you have to realize how you get there and the real formula for success in our business, and I would argue in any business, is that you’ve got to make people capability your No. 1 priority.”

Defining leadership

“I think my definition of leadership stems from the fact that leadership is a privilege. The job of the leader is to bring out the potential of every person that works on the team. That’s why I think teaching is the most important thing I do because it’s the best investment I’ll make in the organizational capability of the organization.”

All of the proceeds from Mr. Novak’s book will be donated to the United Nations World Food Programme in conjunction with Yum!’s global hunger relief efforts.

Posted by Laura Fenwick, IFA Publishing Manager

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