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Feature Story:

Fund-Amental Change?: Is Aziz Hashim's New Fund For Franchisees A Game-Changer? »

By Eddy Goldberg

Tired of paying royalties? How would you like to get in on collecting them? That's one of the reasons--among many--behind an innovative fund created to allow multi-unit franchisees to own or invest in franchise brands.
"If you're in franchising as a multi-unit franchisee and have built your enterprise by paying royalties, it's a very natural hedge to have an investment in an entity that's in the business of collecting royalties," says Aziz Hashim, founder and general partner of the new fund, called NRD Partners.
Hashim, who has made a career operating restaurant franchises, says he has been preparing for this new role all his franchising life. "I've entered and exited 14 brands in my career. So in a way I've been practicing as a little mini-private equity or fund anyway...

Feature Story:

IFA Criticizes Department Of Labor's "Administrative Guidance" On Contractors »

Multi-Unit Franchisee

The International Franchise Association (IFA) is speaking up for franchisees and small businesses everywhere in response to new "administrative guidance" from the Department of Labor (DOL). The guidance applies an "economic realities" test to decide whether a worker can be an independent contractor or must instead be classified as an employee. The IFA says the guidance is unnecessarily intrusive and called it yet another in a long list of Obama Administration directives that will make it harder for millions of small businesses to operate and grow.
"Franchise business owners are simply exhausted and frustrated by the Obama Administration's death by a thousand cuts' attempt to transform the workforce and ignore the concerns of the small business community...

Feature Story:

Arizona Says No To Wage Discrimination »

Multi-Unit Franchisee

The state of Arizona stands with the IFA and has filed an amicus brief with the Ninth Circuit Court of Appeals in support of IFA's effort to halt discrimination against franchisees by the city of Seattle. Last year, Seattle approved an increase in the minimum wage that classifies franchisees as large corporations rather than the small, locally owned businesses that they are. The IFA says this artificial distinction that will force franchise businesses to boost their workers' wages faster than other small businesses.
In his brief, Arizona Solicitor General John R. Lopez, IV says that the Seattle ordinance is discriminatory and directly burdens 13 franchisors based in Arizona and their 54 franchise units operating in Seattle. The brief also asserts that the ordinance violates the U...

Feature Story:

IFA Says New Overtime Regulation "Unnecessarily Meddling" »

Multi-Unit Franchisee

The International Franchise Association (IFA) is condemning a proposed overtime regulation rule from the Department of Labor that it says would dramatically increase the threshold for overtime pay and ultimately force thousands of employers to shift the pay status of their workers from salaried to hourly.

"This change is likely to have the opposite of its intended effect and will clearly harm more workers than it helps," said IFA Executive Vice President of Government Relations & Public Policy Robert Cresanti. "Millions of salaried workers will now become hourly and lose out on key benefits such as workplace flexibility and long term advancement opportunities. This is just the latest example of the Obama Administration unnecessarily meddling in the everyday management of small businesses...

Feature Story:

More Data Supports Positive Economic Impact Of Franchising »

Multi-Unit Franchisee

Two new reports highlight job growth and economic output generated by the franchise industry. The first report, "National Franchise Report: Two Year Review," was presented during a press event at the International Franchise Expo in New York last month. At the same event, officials revealed findings of the mid-year Franchise Business Economic Forecast. Both reports offer glowing analysis of the franchise business marketplace.
ADP's first National Franchise Report: Two Year Review emphasizes that the franchise industry remains strong, despite headwinds. The report analyzed two years of data about job creation and economic output generated by the franchising industry. In its analysis, ADP found that since the financial crisis of 2008, small companies such as franchisees (with 1-49 employees) increased employment at a faster rate than mid- or large-size companies...

Feature Story:

Groups Unite To Battle Discriminatory Wage Hike Efforts In New York »

Multi-Unit Franchisee

The Coalition to Save New York Restaurants is a brand new organization that joins the International Franchise Association (IFA), the National Restaurant Association (NRA), and the New York State Restaurant Association (NYSRA) in a concerted effort to fight discriminatory and mandated wage hikes throughout the state. A statement issued during the recent IFE Convention in New York says the Coalition was established to combat discrimination against the quick-service food industry in New York State, which is considering mandating a minimum wage increase for quick-serve food restaurants only.

"The Coalition to Save New York Restaurants will aggressively fight Governor Cuomo's politically-motivated decision to discriminate against local franchise small business owners for a wage hike, simply to satisfy the request of the Service Employees International Union (SEIU)," said IFA President & CEO Steve Caldeira, CFE...

Feature Story:

IFA Launches New Campaign To Highlight Franchising's Positive Economic Impact »

Multi-Unit Franchisee

Franchising has for decades made a positive and significant impact on the overall economy. The business model provides opportunities for entrepreneurs, jobs for individuals, and a boost to local economies everywhere. Later this week, the IFA will launch its new public affairs campaign at the International Franchise Expo (IFE) in New York City.
The campaign is the next phase of IFA's comprehensive effort to highlight the benefits of franchising and the positive economic contributions of the industry. ADP Research Institute will also present its latest National Franchise Report during a press conference to kick off the Expo. The report captures two years of job creation and economic output generated by the franchising industry.
More than 20,000 attendees and 450 exhibitors are expected at this year's Expo...

Feature Story:

Franchise Businesses Set The Pace »

Multi-Unit Franchisee

Franchising businesses continue to outpace the rest of the economy, according to the mid-year forecast update of The Franchise Business Economic Outlook: 2015. The report released last week by the International Franchise Association Educational Foundation and IHS Economics, finds franchising remains on track to outperform the U.S. economy for the fifth consecutive year.
While the forecast of U.S. GDP has been revised downward and now shows growth of only 3.4 percent increase in nominal dollars in 2015 for the overall economy, IHS expects the Gross Domestic Product of the franchise sector in nominal dollars to increase by 5.2 percent to $521 billion in 2015.
"Local franchise small businesses continue to grow at a faster pace, creating more jobs for Americans and producing higher sales growth than other businesses," said IFA President & CEO Steve Caldeira...

Feature Story:

Report Says Overtime Rules Would Hurt Businesses »

Multi-Unit Franchisee

Retailers like franchisees could be saddled with millions of dollars in added costs if federal overtime regulations are revised, according to a new report by the National Retail Federation (NRF). What's more, the rules could also adversely affect working Americans.
The report, Rethinking Overtime, finds the Obama Administration's plan to revise federal overtime regulations would likely "hollow out" low- and mid-level management positions in the restaurant and retail industries and result in a shift toward more hourly and part-time workers. The report says that the proposal could cost retailers millions of dollars in added costs and would disproportionally impact retailers operating in rural states.
"This is a workplace regulation with massive hidden costs," says NRF Senior Vice President for Government Relations David French...

Feature Story:

IFA Claims SEIU "Manufacturing A Crisis" In Franchising »

Multi-Unit Franchisee

The IFA's President & CEO Steve Caldeira is calling foul over a 33-page petition just filed by the Service Employees International Union (SEIU) with the Federal Trade Commission. The union is asking the government to investigate alleged abuses by franchisors against franchisees and develop reforms for the franchise industry.
"Once again, the Service Employees International Union is manufacturing a crisis as part of its increasingly expensive public relations campaign, now estimated to be more than $33 million, to destroy the time-tested franchise model in order to fill its own depleted membership," said Caldeira. "America's 780,000 franchises make significant contributions to the U.S. economy, growing faster than the U.S. economy for five consecutive years and employ nearly 8...

Feature Story:

IFA Opposes Damaging California Franchise Legislation »

Multi-Unit Franchisee

A bill making its way through the California State Assembly would undermine existing business contracts between franchisors and franchisees, says IFA President & CEO Steve Caldeira. The IFA opposes the bill and issued a statement saying Assembly Bill 525 would create untested new statutory language that will lead to costly litigation and hinder future franchise development for an industry that has outpaced overall economic growth for five years since the recession.
"In keeping with the spirit of Governor Brown's veto message last year on this matter, the International Franchise Association has been working in good faith with Assemblyman Holden (D-CA-41) to reach a consensus on a number of outstanding contractual issues between franchisees and franchisors...

Feature Story:

2015: Year Of The Franchisee? »

By Darrell Johnson

On many levels, 2014 was a tumultuous year for the franchise business model.
First, a quick overview. Franchising is regulated at the federal level, and 15 states have specific registration and approval requirements--yet we entered the year with 19 ongoing or new state legislative initiatives involving franchising; several city councils also got into the act. Back in D.C., the NLRB piled on with additional efforts to alter the franchise business model, and the SBA is re-evaluating how it defines "affiliation" standards for franchise brand SBA-guaranteed lending eligibility. Some of these actions have been challenged in the courts; others will be in the near future.
The motivations for all these efforts are varied and generally political in nature...

Feature Story:

IFA Calls Labor Union Report Flawed »

Multi-Unit Franchisee

The way the IFA sees it, franchisees are highly satisfied, renew their contracts at an extremely high rate, and are part of a wave of franchise industry growth that is moving faster than the rest of the economy. And they have the data to prove it.
In a news release, the IFA has responded to a new report out by the Service Employees International Union (SEIU). The IFA and its franchisee members dispute the SEIU report, question its validity and its motivations, while offering evidence that franchising is a thriving, widely-accepted and robust part of the American economy.
"The SEIU is so desperate to lend credibility in its fledging effort to convince government officials to help it unionize franchise workers that it has ginned up a report that grossly misrepresents attitudes toward franchising," said IFA President & CEO Steve Caldeira, CFE...

Feature Story:

Multi-Unit Franchisee 'Strategies For Growth' Collection Available »

Multi-Unit Franchisee

Multi-unit franchisees who are looking to gain an edge on their competition have a new resource at their disposal. Franchise Update's Franchise Learning Academy has just released its "Strategies For Growth" Collection, a series of 14 video seminars, covering more than 20 hours of programming, and providing access to the insights, experience, and success stories of more than 40 multi-unit and multi-brand franchisees and franchising professionals.
The timely and topical information found on the videos comes straight from many of today's top multi-unit franchisees who have been there, done it, and successfully lived to tell the tale. Their invaluable advice can provide tips and insight for taking your business to the next level. All video seminars were produced at Franchise Update's Annual Multi-Unit Franchising Conferences in 2014 and 2015...

Feature Story:

IFA And Franchisees Oppose California Franchise Bill »

Multi-Unit Franchisee

A California franchise bill is threatening the livelihood of the state's franchisees who would face additional and unnecessary regulations if Assembly Bill 525 is passed. The IFA and franchisees in the state are urging lawmakers to oppose the bill.
"The unintended consequences of this bill would dramatically change the franchise relationship between franchisors and franchisees and we have serious concerns about some of the provisions included in the bill, particularly those that introduce vague and ambiguous language into the enforceability of franchise contracts which will ultimately lead to increased, unnecessary and costly litigation," says IFA President & CEO Steve Caldeira, CFE. "The last thing we need is further government intervention into an industry that has proven itself as a steady job creator and bastion of small business ownership throughout the state...

Feature Story:

Survey Finds Government Proposal Would Impact Middle Management »

Multi-Unit Franchisee

The Obama administration is proposing to expand overtime and redefine what it means to be a retail or restaurant manager. The move could affect the career paths of many employees and undermine the quality of customer service they are able to provide, according to a new survey conducted for the National Retail Federation.
"The administration is singling out the service economy, specifically restaurants and retailers, with these new overtime regulations," says NRF Senior Vice President for Government Relations David French. "The proposed Labor Department regulations will hinder the career paths of millions of American workers, restrict the duties a manager can perform while working, impact the customer experience, and add lots of paperwork and bureaucracy to the job description...

Feature Story:

Melting Pot Launches New Recruiting Incentive Program »

Multi-Unit Franchisee

The Melting Pot is looking to reopen some franchise locations and it has created a new incentive to help recruit qualified restaurant operators. The new program will provide financing to those who sign a franchise agreement to purchase an existing Melting Pot location in select markets across the country, starting with Chattanooga and Memphis.
Under the guidelines of its new "Path to Grow" program, approved restaurant operators can inject as little as 5 percent liquidity into the purchase of the restaurant to partner with the franchisor, who would provide the financing. In exchange, the franchisor would initially assume 51 percent ownership of the restaurant under the conditions that the operating franchisee agrees to pay back the initial loan within three years of signing the franchise agreement...

Feature Story:

Fresh CREAM Deal Coming To Florida »

Multi-Unit Franchisee

The cold rush is coming to Florida. The Sunshine State will be the location of more than 30 new shops of the San Francisco-based dessert franchise CREAM over the next 7 years. The franchise specializes in premium ice cream sandwiches and other frosty treats.
The new agreement marks CREAM's largest and most significant franchising announcement since launching its franchise opportunity in 2012, and will develop stores starting in South Florida before moving towards West Florida and beyond.
"There's definitely a lot of excitement around the brand," says CREAM president and COO Jim Ryan. "We are very excited to have over 30 units available to entrepreneurs in Florida and to make our East Coast debut."
The initial deal was inked with Armando Martinez Stone, who discovered the brand while participating in his High School DECA program in which participants were given the challenge to outline a plan to improve a company's national and international success...

Feature Story:

IFA Appeals To Stop Seattle's Discrimination Against Franchise Business Owners »

Multi-Unit Franchisee

Franchisees in Seattle have the International Franchise Association (IFA) on their side. The group is appealing a recent decision in federal court that allows the city of Seattle to discriminate against small franchised businesses as part of the city's 2014 minimum wage law. The IFA sought a preliminary injunction, which was denied by U.S. District Judge Richard A. Jones court in mid-March.
The IFA and five Seattle franchisees have given notice that they will appeal Judge Jones' decision to the United States Court of Appeals for the Ninth Circuit. The original lawsuit filed in June 2014 requested fair treatment for franchises under the law, which treats them as large, national companies, rather than the small, locally-owned businesses...

Feature Story:

Fastsigns Franchisee Advocates For Industry At U.S. Chamber Event »

Multi-Unit Franchisee

Fastsigns franchisee Clint Ehlers is taking a stand in support of the franchise industry at this week's U.S. Chamber of Commerce event, "The National Labor Relations Board (NLRB) and the Joint-Employer Standard: New Interpretations, New Liabilities and the Impact on Other Statutes."
Ehlers owns and operates Fastsigns locations in Lancaster and Willow Grove, PA. This isn't his first time to speak up about the issue. He previously took a stance against the ruling in an appearance on September 9, 2014, testifying before Congress against the "joint employer" decision, with Catherine Monson, CEO of Fastsigns International.
As a pervasively critical issue within the franchise industry--among franchisors, franchisees, and employees alike--the NLRB's ruling on the Joint-Employment Standard will be addressed by Ehlers at the March 20th event, including the threat to locally-owned and operated franchise businesses across the nation that provide incredible value to communities by providing jobs, products/services, and sales tax revenue...



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