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The five weeks between the Republican and Democratic conventions felt like a lifetime, with a brand-new Democratic ticket forming in record time. The International Franchise Association (IFA) remains neutral in presidential elections, committed to working with whoever occupies the White House for the improvement of our model. Just as we engaged in Milwaukee for the RNC, we were present in Chicago, educating candidates and campaigns about the immense benefits franchising offers, particularly to minority-owned businesses.
More highlights from championing franchising with lawmakers in Chicago at the #DNC2024. IFA is proud to work with members across the aisle on policies that support the franchise business model and its 9M employees in the U.S. pic.twitter.com/vexxskHpuK
— IFA (@Franchising411) August 21, 2024
Like many Americans, the franchise community is eager to learn more about Vice President Harris’ vision and policy priorities, which she outlined as an Opportunity Agenda in her acceptance speech. It is promising that one of her early commercials showcases her time working at McDonald’s. If elected, Harris and her husband, Doug Emhoff, would share a common bond with the 1 in 8 Americans who have worked at McDonald’s. To truly support the franchise business model, here are five concrete ways Vice President Harris can resonate with the franchise community.
Related: Considering franchise ownership? Get started now to find your personalized list of franchises that match your lifestyle, interests and budget.
Be an Advocate for Franchising
Firstly, Vice President Harris should champion franchising by regularly visiting franchises and engaging with their employees in swing states and beyond. This act would position franchising as a key component of the Opportunity Agenda, highlighting its unique benefits for all stakeholders in the model.
These stakeholders are significant, ranging from the nearly 9 million employees of America’s 800,000 franchise businesses (who earn higher wages and better benefits) to the diverse franchise owners themselves, who surpass their non-franchised counterparts in terms of race and gender diversity.
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Reject an Expanded Joint Employer Rule
Secondly, Vice President Harris must abandon support for an expanded joint employer rule, which labor advocates but would be detrimental to franchising. A Harris administration focused on fostering small business creation must steer clear of efforts to implement this rule.
Bipartisan majorities in congress, federal courts, and even Democratic lawmakers in California have rejected expanding the joint employer test. This rejection led to negotiations on a bill that preserved franchisee equity while also introducing predictability in minimum wage increments.
Related: A Franchise Attorney and 20-Year Industry Expert Weighs in on How the Election Will Impact Small Businesses
Promote Pro-Small Business Tax Policies
Thirdly, Vice President Harris should advocate for pro-small business tax policies, particularly concerning provisions of the Tax Cuts & Jobs Act. Extending the qualified business income deduction and reinstating pro-growth interest deductibility standards would greatly benefit franchise owners.
Such actions would give small business entrepreneurs a competitive edge and demonstrate Harris’ commitment to addressing the needs of the small business community, offering a pathway to business success in the face of potential tax increases.
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Enhance SBA Lending Limits
Fourthly, increasing lending limits at the Small Business Administration (SBA) and expanding access to programs like the 7(a) Working Capital Pilot (WCP) would significantly benefit small business owners. The WCP, launched earlier this year, offers a more flexible credit option tailored to meet specific business needs in a challenging economic environment.
Access to capital remains a key challenge for entrepreneurs, and initiatives like the WCP aim to facilitate entry into the entrepreneurship world, where franchising continues to play a pivotal role.
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Modernize the FTC’s Franchise Rule
Finally, Harris should outline a future for the Federal Trade Commission (FTC) that includes modernizing the Franchise Rule, a federal regulation governing the sale of franchises. With the Franchise Rule last updated in 2007, a refresh is necessary to improve transparency and understanding, especially for prospective franchisees making significant investments.
By addressing these important areas, a Harris administration can foster an environment conducive to entrepreneurial development in franchising, staying true to the core mission of the FTC — protecting consumers and prospective franchisees while promoting local workforce development and small business growth.
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Matt Haller is the President and CEO of the International Franchise Association (IFA). Greg Flynn is the Founder, Chairman, and CEO of Flynn Group and Flynn Properties, and an IFA Board Member. Flynn Group, the largest franchise operator globally, owns over 2,700 Applebee’s, Taco Bells, Paneras, Arby’s, Pizza Huts, Wendy’s, and Planet Fitness units, generating $4.7+ billion in sales and employing 75,000+ people in 44 states and 3 countries.
