5 Ways Kamala Harris Can Support The Franchise Community

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The 5 weeks between the Republican and Democratic conventions may have been a lifetime, as a brand-new Democratic ticket shaped in file velocity. As at all times, the International Franchise Association (IFA) is impartial in presidential elections and we’ll work with whoever is within the White Home for the betterment of our mannequin. Simply as we have been in Milwaukee for the RNC, we have been on the bottom in Chicago, educating candidates and campaigns about all the great franchising supplies, particularly for minority-owned companies.

Extra highlights from championing franchising with lawmakers in Chicago on the #DNC2024. IFA is proud to work with members throughout the aisle on insurance policies that help the franchise enterprise mannequin and its 9M staff within the U.S. pic.twitter.com/vexxskHpuK

— IFA (@Franchising411) August 21, 2024

Like many People, the franchise group is thinking about studying extra about Vice President Harris’ imaginative and prescient and coverage priorities, which she characterised in her acceptance speech as an Opportunity Agenda. It’s encouraging that one among her early commercials options her time working at McDonald’s. In reality, if elected, Harris, alongside along with her husband Doug Emhoff, will share a standard thread with the 1 in 8 Americans
who’ve labored at McDonald’s. To genuinely help the franchise enterprise mannequin, listed below are 5 concrete methods Vice President Harris can enchantment to the franchise group.

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Be a champion for franchising

First, Vice President Harris must be a champion for franchising and use every single day on the campaign trail to go to franchises and meet their staff in swing states — and in all places in between. Doing so will unlock franchising as a element of the Alternative Agenda, together with the distinctive advantages of franchising for all stakeholders concerned within the mannequin.

These stakeholders are substantial — from the practically 9 million staff who work for America’s 800,000 franchise companies (and earn greater wages and higher advantages than non-franchised staff) to the franchise homeowners themselves, who’re extra numerous in race and gender than non-franchises.

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Abandon an expanded joint employer rule

Second, Vice President Harris talked on the DNC about working with enterprise and labor. But, one among labor’s prime priorities has been a joint employer rule that may successfully destroy franchising. A Harris administration that wishes to help small enterprise creation should abandon efforts to implement an expanded joint employer rule.

Bipartisan majorities in congress and a federal courtroom have rejected increasing the joint employer take a look at to incorporate reserved and oblique management. Even Democratic supermajorities within the California legislature, and her home-state Governor Gavin Newsom, rejected joint employer legal responsibility. This created a pathway to barter a invoice with organized labor that preserved franchisee fairness of their enterprise, and creating predictable will increase within the minimal wage.

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Name for pro-small enterprise tax insurance policies

Third, Vice President Harris ought to name for pro-small enterprise tax insurance policies, given the expired and expiring provisions of the Tax Cuts & Jobs Act (TCJA). These embody extending the certified enterprise earnings deduction (QBID), also called the part 199A deduction, and restoring a pro-growth curiosity deductibility commonplace that expired on the finish of 2022.

Extending the 199A deduction, together with passing the bipartisan Tax Relief for American Families and Workers Act — which garnered overwhelming bipartisan help within the Home this yr — would significantly profit franchise homeowners. This laws would enhance the quantity of curiosity homeowners can deduct from their earnings taxes, provide non permanent bonus depreciation for the acquisition of apparatus and short-lived capital property and embody different pro-business and pro-worker provisions.

These actions would supply small enterprise entrepreneurs with a aggressive edge over massive firms and show that Vice President Harris is dedicated to addressing the wants of the small enterprise group. She will chart a brand new path and prolong an open hand to the enterprise group by placing the politics apart and decide to extending a coverage they’ve come to depend on. With out motion, each enterprise proprietor in nation wakes up on January 1, 2026, dealing with a tax enhance.

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Enhance lending limits on the SBA

Fourth, enhance lending limits on the Small Business Association (SBA) and increase entry to the 7(a) Working Capital Pilot (WCP) program. Throughout her acceptance speech, Harris pledged to, “provide access to capital for small-business owners and entrepreneurs and founders.” Launched earlier this yr, WCP is a line of credit score product that options an annual warranty price construction that works to supply larger flexibility than a standard time period mortgage to satisfy particular enterprise wants.

Accessing capital is more and more difficult in such a high-interest fee atmosphere. The SBA pitched the idea as a way of breaking down limitations looking for to begin their very own pathway to entrepreneurship, the place the franchise mannequin is poised to proceed enjoying a serious function.

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Define a future for the Federal Commerce Fee

Lastly, Harris ought to define a future for the Federal Commerce Fee (FTC) that features a modernization of the Franchise Rule, a federal regulation solely enforced by the FTC that governs the sale of a franchise. At present below overview by the FTC, the Franchise Rule hasn’t been updated since 2007 — the identical yr the primary iPhone was launched.

Analysis revealed within the Wall Street Journal confirmed it took greater than 20 years of training to know a Franchise Disclosure Doc (FDD), and a federal investigation discovered many potential franchisees didn’t learn the disclosures in any respect. This wants to alter, particularly throughout the pre-sale course of when a potential franchisee is deciding whether or not to take a position important monetary assets in a franchise.

A Harris administration could be sensible to course-correct the FTC to foster entrepreneurial growth in franchising and double-down on the true mission of the FTC — to guard shoppers and potential franchisees. The franchise enterprise mannequin encourages workforce growth and small enterprise formulation in native communities, we sit up for working with any administration and any political social gathering towards that essential purpose.

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Matt Haller is the President and CEO of the Worldwide Franchise Affiliation (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 Health items producing $4.7+ billion in gross sales and using 75,000+ individuals in 44 states and three international locations, Flynn Group is the biggest franchise operator on the earth.