IFA members are more energized than at any point in the 50-year history of the organization in their desire to support candidates who will advance pro-growth policies that create jobs and strengthen the economy. As we work to enhance our grass-roots advocacy; increase receipts for IFA’s political action committee, FranPAC; and promote the economic impact of franchising among lawmakers, I am confident that the franchise industry will continue to have a significant influence on the outcome of new laws and regulations and ensure a sound business environment for franchising.
The first decade of the 21st century has been a decade of incredible growth in the franchise industry and, as a result, game-changing growth for the International Franchise Association (IFA). Over the past decade, economic output increased by an astounding 40 percent in the franchising industry, and IFA membership and assets have grown significantly.
This growth in resources has allowed IFA members to increase their presence and influence in Washington, DC, to protect, enhance, and promote franchising. The strong financial performance of the IFA and the industry has occurred despite several economic downturns and the more recent financial crisis. However, the anti-business, pro-regulatory agenda over the past two years has tested the grass-roots and advocacy resolve of the franchise industry, clearly threatening our ability to sustain the growth we have experienced. And we will continue to face many challenges in 2011.
In 2010, the nation witnessed an historic midterm election in which more than 100 new members were elected to Congress. The Republican Party swept into majority control of the U.S. House of Representatives and significantly narrowed the gap of control in the U.S. Senate.
The IFA’s clear and consistent message to Congress throughout the 2009-2010 election cycle was for lawmakers to focus on policies that will incentivize growth and investment in small business. This message closely matched the feelings of voters, and in the election, they demonstrated their discontent with the anti-growth agenda and voted out those whom they felt ignored their concerns on jobs, spending, and health-care reform.
Outlook for Key IFA Issues
The playing field has changed for several issues of particular importance to the franchise industry. With a divided government, the business community has a chance to make an impact on some of the key issues waiting for the next Congress.
Taxes and Spending: Members of Congress clearly heard the concerns of the franchise small business community when they voted to extend the current tax rates. In September, more than 500 franchise business leaders visited their members of Congress during the IFA’s 11th Annual Public Affairs Congress and carried the message to their elected officials that extension of these tax cuts was critical to providing economic certainty so they could continue growing their businesses and create jobs.
While the extension is great news for franchise small businesses, the extension is only for two years. The IFA believes the best solution for franchise small businesses is a permanent extension of the current tax rates, and we will work aggressively with the new Congress to meet that goal.
Deficit reduction is also a top priority. The IFA expects some movement to pass laws to control federal spending when Congress convenes in January. The IFA strongly supports controlling spending over increased taxes as an important step in reducing the growing deficit, and will work to educate the new Congress on why this is so important to the success of small franchise businesses.
Health Care: Many in the business community are hopeful that the newly energized Republicans in Congress will push for repeal of many of the most controversial components of the new health-care law, notably the 1099 reporting issue, as well as individual and employer mandates. House Republicans will also work at the committee level to provide increased oversight into the development of new health-reform regulations and will seek to use the appropriations process to slow down various provisions. The IFA will aggressively work for repeal of the 1099 reporting requirement and work to ensure that any new health-care rules that are implemented minimize the economic impact on franchise businesses.
Immigration: We expect some efforts to revisit immigration reform may find a place on the agenda of the new Congress. The IFA will continue to work on fair immigration laws that help to ensure an adequate and affordable work force for franchise businesses.
Card Check: Card-check legislation did not make much headway during the first two years of the Obama Administration, which is contrary to the expectations just two years ago. We do expect proponents of Card-Check to work closely with the Obama administration to seek regulatory remedies through the National Labor Relations Board. The IFA will continue to oppose these efforts to ensure that small business owners are able to operate on a level playing field when it comes to workplace labor issues.
The Outlook for 2012
The IFA’s small-business jobs agenda remains on target as the country moves into preparation for the 2012 election cycle. Voters favor small business owners, and they see local businesses as the key to progress on jobs and economic recovery.
IFA members are more energized than at any point in the 50-year history of the organization in their desire to support candidates who will advance pro-growth policies that create jobs and strengthen the economy. As we work to enhance our grass-roots advocacy; increase receipts for IFA’s political action committee, FranPAC; and promote the economic impact of franchising among lawmakers, I am confident that the franchise industry will continue to have a significant influence on the outcome of new laws and regulations and ensure a sound business environment for franchising.
Ken Walker, CFE, is chairman of the International Franchise Association and chairman and CEO of Driven Brands.
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