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Kicking off hours after an assassination try on a presidential candidate, the Republican Nationwide Conference took on heightened significance this yr. In my position as President and CEO of the Worldwide Franchise Affiliation (IFA), I traveled to Milwaukee for a coverage roundtable entitled “Franchising, the American Dream,” with U.S. Consultant Kevin Hern (R-OK), who’s the co-chair of the congressional franchise caucus, McDonald’s franchisee Jimmy Williams, and hotelier Jyoti Sarolia.
Matt Haller and Jyoti Sarolia Credit score: Matt Haller
To be clear, IFA is non-partisan and doesn’t take sides in presidential campaigns. We will probably be in Chicago for the Democratic Nationwide Conference in August, and we work with anybody from any get together who champions our priorities and fights for our franchise small enterprise homeowners. That is additionally why we partnered with POLITICO and CNN with Milwaukee-based Batteries+. We created a model activation on the POLITICO/CNN Grill, the place over 4 days we gave away wi-fi battery chargers to over a thousand attendees, speaking the financial advantages of franchising to convention-goers, with a QR-code that linked to IFA’s Open for Alternative marketing campaign.
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Political conventions are at all times thrilling, and this yr was no totally different, particularly after COVID-19 curtailed the in-person festivities in 2020. The excitement and vitality had been palpable. In my conversations with varied stakeholders from all walks of life, sure commonalities emerged. Listed here are 4 of them.
1. Unions and franchising should not incompatible
The fiery speech from Sean O’Brien, president of the Worldwide Brotherhood of Teamsters, bought folks’s consideration. It marked the primary time a teamster addressed the RNC in its 121-year historical past. The Wall Avenue Journal headline learn, “Trump Courts the Union Vote.” The GOP is just not used to audio system at their conference railing about “financial terrorism.” However as O’Brien identified, the Teamsters have supported Republican candidates earlier than, together with Presidents Richard Nixon, Ronald Reagan and George H.W. Bush.
For the franchise group, O’Brien’s presence served as a reminder that we now have a compelling story to inform and we have to inform it.
To begin with, our mannequin offers almost 9 million direct jobs, and never a single one is being outsourced abroad. Second, jobs in franchising pay as much as 3.4 p.c increased wages and supply increased charges of paid depart and different advantages than these at non-franchises, in accordance with knowledge from Oxford Economics. Third, franchises ARE small companies, and that’s the advantage of our enterprise mannequin.
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Whereas we’re not going to agree with the Teamsters or different unions on a lot, one factor we do agree on is that policymakers needs to be targeted on creating good jobs proper right here in America, and that is what the franchising group is doing. Even when our manufacturers open new franchises abroad, we’re bringing a refund ashore to the U.S. by way of the royalty stream paid to function a U.S. model overseas, making a net-trade profit to the U.S. financial system.
We should push again on the concept that the franchise mannequin and unions are incompatible. It is false. We are able to and do have each. It’s true that the union’s prime coverage agenda, the PRO Act and an expanded definition of joint employer, and franchising can’t co-exist, however unions should not inherently an opponent. It is their historical past of coverage priorities that might convey down franchising that we oppose.
2. Franchising is re-aligning get together traces
Second, the standard political and get together traces are re-aligning, creating one other golden alternative to increase the franchise tent. For instance, public polls have proven former President Donald Trump receiving as excessive as 30 p.c of the Black vote — almost 3 times increased than the 12 p.c he earned in 2020.
Right here once more, franchising has an essential position to play. Franchising has increased charges of enterprise possession amongst girls, veterans and minorities. The truth is, greater than one-quarter (26 p.c) of franchises are owned by folks of colour, in comparison with 17 p.c of non-franchised companies.
Paul Calkins (IFA), Home Speaker Mike Johnson and Matt Haller (IFA) Credit score: Matt Haller
As Clement Troutman, an IFA member, U.S. Navy veteran, writer, and Maryland-based Tropical Smoothie Cafe franchisee, wrote in a column for the Washington Occasions observing Juneteenth, “the previous few years have been difficult for Black entrepreneurs. From challenges accessing capital to a disproportionate influence stemming from the pandemic, Black small enterprise homeowners face main obstacles.”
Clement famous, “Franchising might help, however provided that elected leaders do their half in creating the fitting enterprise setting.” These are sensible phrases and classes that each one candidates ought to take to coronary heart in the event that they need to increase their political base of supporters.
3. J.D. Vance has sided with franchising up to now
There was quite a lot of scrutiny on Senator J.D. Vance after his choice because the vice-presidential nominee, and almost each dialog I had with members of Congress and others in Milwaukee centered round what to make of Senator Vance’s choice. Within the occasion of a Trump victory, many view him because the pure GOP standard-bearer in 2028. All through his two years within the Senate, Vance has raised eyebrows by deviating from conventional Republican orthodoxy. For instance, he has marched on union picket traces and famously praised Federal Commerce Fee (FTC) Chair Lina Khan as “one of many few folks within the Biden administration who I feel is doing a fairly good job.” But when it got here to franchise points, significantly joint employer, Senator Vance sided with franchising. When the stakes had been the very best throughout this spring’s repeal of the joint employer rule, Vance stood with us, and that’s telling.
4. The following president may have a big impact on franchising
Members of the franchise group — like all voters — are assessing their presidential decisions by way of the prism of previous insurance policies. We have now a way of what a second Trump and Biden administration may appear to be by evaluating their earlier time in workplace. Definitely, IFA is targeted way more on financial and regulatory visions than we do on political ideology. What’s the plan for job creators?
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For instance, the person tax provisions within the Tax Cuts and Jobs Act (TCJA) are set to run out subsequent yr. The regulation considerably restructured quite a few features of the federal tax system for small companies, together with reductions in particular person and company tax charges, a brand new 20% deduction for revenue from pass-through companies, 100% bonus depreciation for capital investments, and a brand new limitation on the deductibility of enterprise curiosity. The GOP platform expressly requires tax cuts and plenty of Methods and Means Committee members who will write the following tax regulation, together with Chairman Jason Smith of Missouri, Vern Buchanan of Florida, and Lloyd Smucker of Pennsylvania, have all highlighted the significance of making certain pass-through companies like most franchises are handled pretty within the subsequent spherical of tax reform.
Past tax points, the following president will select their very own FTC chair, who can in flip replace the Franchise Rule, one thing that hasn’t occurred since 2007 — the identical yr the primary iPhone was launched — and can make appointments to the NLRB, together with the final counsel, who’s arguably probably the most highly effective place at that company.
The stakes are excessive for franchisors and franchisees alike. We don’t vote as a monolith or alongside strict get together traces. However one factor is obvious, the record of points dealing with franchising is lengthy, and the significance of getting a seat on the desk is extra essential than ever. Due to the help of so many IFA members, and what our manufacturers, franchisees and suppliers do day by day, I am assured that no matter November brings, franchising will proceed to thrive and IFA will probably be on the forefront combating for the most effective curiosity of franchising.
