The views expressed by the business participants are their own.
The five weeks between the Republican and Democratic caucuses would have been a lifetime, as the new Democratic ticket formed at record speed. As always, the International Franchise Association (IFA) is neutral in the presidential election and we will work with whoever is in the White House to improve our model. Just as we were in Milwaukee working for the RNC, we were in Chicago, educating candidates and campaigns about all the great things franchising has to offer, especially for minority-owned businesses.
More highlights from franchising wins with Chicago lawmakers at #DNC2024. IFA is proud to work with members across the board on policies that support the franchise business model and its 9M employees in the US. pic.twitter.com/vexxskHpuK
– IFA (@Franchising411) August 21, 2024
Like many Americans, the franchise community is interested in learning more about Vice President Harris’ vision and policy priorities, which he outlined in his acceptance speech as the Opportunity Agenda. It is encouraging that one of his earliest commercials features his time working at McDonald’s. In fact, if elected, Harris, along with her husband Doug Emhoff, will share a common thread with 1 in 8 Americans.
who used to work at McDonald’s. To truly support the franchise business model, here are five concrete ways Vice President Harris can appeal to the consumer community.
Related: Considering franchise ownership? Start now to find your personal list of franchises that match your lifestyle, interests and budget.
Become a franchising master
First, Vice President Harris must be a master of the franchise and spend every day on the campaign trail visiting franchises and meeting with their employees in changing states – and everywhere in between. Doing so will open up capital exchange as part of the Opportunities Agenda, which includes unique franchise benefits for all stakeholders involved in the model.
Those stakeholders are many – from the nearly 9 million employees who work for America’s 800,000 franchise businesses (and receive higher wages and better benefits than non-franchise employees) to franchise owners themselves, who are more racially and gender diverse than non-franchisees. .
Related: The Crucial First 100 Days on Board – What You Can Pay Attention to That Can Make or Break Your New Hire
Abandon the extended joint tenant rule
Second, Vice President Harris spoke at the DNC about working with businesses and workers. However, one of the priorities of the work has been a joint employer law that can effectively end the exchange of funds. The Harris administration, which wants to support the creation of small businesses, must abandon efforts to implement a joint employer law.
Two major parties in congress and a federal court have rejected the expansion of the joint employer test to include reserved and indirect controls. Even top Democrats in the California Legislature, including his home state’s Governor Gavin Newsom, have rejected shared employer liability. This creates a way to negotiate a bill with organized labor that preserves the equity of traders in their business, and creates a predictable increase in the minimum wage.
Related: Business Lawyer and 20-Year Industry Expert Weighs in on How the Election Will Affect Small Businesses
Ask for small business tax policies
Third, Vice President Harris should call for small business tax policies, given the outdated and expiring provisions of the Tax Cuts and Jobs Act (TCJA). This includes extending the qualified business income deduction (QBID), also known as the section 199A deduction, and reinstating the rate of incremental capital gains deduction that expires at the end of 2022.
Expanding the 199A deduction, and passing the bipartisan Tax Relief for American Families and Workers Act — which received significant bipartisan support in the House this year — would greatly benefit franchise owners. The legislation would increase the amount interest owners can deduct from their income taxes, provide temporary bonus depreciation on equipment purchases and short-term capital goods and include other pro-business and pro-worker provisions.
These actions will give small businesses a competitive advantage over large corporations and demonstrate that Vice President Harris is committed to addressing the needs of the small business community. He can chart a new path and extend an open hand to the business community by putting politics aside and committing to extending the policy they rely on. Without action, every business owner in the country wakes up on January 1, 2026, facing a tax increase.
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Increase SBA lending limits
Fourth, expand SBA lending limits and increase access to the 7(a) Working Capital Pilot (WCP) program. During his acceptance speech, Harris promised, “to provide access to finance for small business owners and entrepreneurs and innovators.” Launched earlier this year, WCP is a credit product line that includes an annual guaranteed payment structure that works to provide greater flexibility than conventional term loans to meet specific business needs.
Finding money is becoming more and more of a challenge in such a high interest rate environment. The SBA established this concept as a way to break down barriers for those who want to start their own path to entrepreneurship, where the franchise model is ready to continue to play a major role.
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Describe the future of the Federal Trade Commission
Finally, Harris should outline the future of the Federal Trade Commission (FTC) which includes the modernization of the Franchise Rule, a federal law enforced only by the FTC that regulates franchise sales. Currently under review by the FTC, the Trade Act has not been updated since 2007 – the same year the first iPhone was introduced.
Research published in The Wall Street Journal showed that it took more than 20 years of education to understand the Franchise Disclosure Document (FDD), and a government investigation found that many prospective franchisees did not read the disclosure at all. This needs to change, especially during the pre-sale process when the prospective franchisee makes the decision to invest significant funds in the franchise.
The Harris administration would be wise to reform the FTC to encourage business development in the business world and double down on the FTC’s original mission – to protect consumers and prospective franchisees. The franchise business model promotes workforce development and the creation of small businesses in local communities, we look forward to working with any administration or any political party to achieve that important goal.
Related: Is Franchising Right For You? Ask yourself these 9 questions to find out.
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. With 2,700+ Applebee’s, Taco Bells, Paneras, Arby’s, Pizza Huts, Wendy’s and Planet Fitness locations generating $4.7+ billion in sales and employing 75,000+ people in 44 states and 3 countries, Flynn Group is the largest franchise operator in the world.
