72 Hours To Save Franchising - Come to D.C. Sept. 19-21 for FAN Meeting
Earlier this year, following a lengthy and hard-fought campaign led by the IFA, Labor Studies Professor David Weil failed in his pursuit of the top job at the U.S. Department of Labor’s Wage and Hour Division. This was the first time since 1989 a federal appointee’s confirmation was defeated on the floor of the U.S. Senate. The Wage and Hour Division has incredible regulatory authority over the franchise business model and Weil’s appointment would have spelled significant challenges to franchising.
Weil previously held the same position in the Obama administration, during which he led the charge on an unlawful overtime rule, sweeping restrictions on the use of independent contractors, and new joint employment rules that imposed crushing operational and legal costs on franchise brands.
Saving the Franchise Rule
The success of the campaign to defeat Weil’s nomination provides perspective for the next battle: the 10-year review of the FTC’s Franchise Rule. As we learned with the Weil campaign, comments and engagement from local franchise owners and franchisor executives help connect policymakers with the impact of the laws, rules, and appointments they make on franchise owners’ ability to do business.
In early June, the IFA led a group of 16 national business organizations urging Congress and the FTC to work together to preserve the Franchise Rule, currently under its 10-year review. The Franchise Rule, the primary federal regulation governing the franchise sector since 1978, requires franchisors to provide essential information to prospective franchisees.
In letters to the U.S. House and Senate Commerce Committees, the industry groups detailed how the Franchise Rule helps promote business ownership and support economic growth. The letters were signed by 16 groups representing business and industries involved in franchising: the American Hotel & Lodging Association, American Staffing Association, Home Care Association of America, IFA, International Health Racquet and Sportsclub Association, International Sign Association, National Association of Convenience Stores, National Association of Realtors, National Association of Women Business Owners, National Council of Chain Restaurants, National Restaurant Association, National Retail Federation, Small Business & Entrepreneurship Council, U.S. Black Chambers, U.S. Chamber of Commerce, and Workplace Policy Institute.
“During the economic recovery, there has never been a better time for entrepreneurs and workers to be in franchising,” said IFA Senior Vice President of Government Relations and Public Affairs Michael Layman. “The franchise sector is growing faster than the rest of the economy, franchisee satisfaction has never been higher, and franchise workers enjoy greater advancement opportunities and higher wages than nonfranchise small-business workers.”
The letter continued, “The Rule affords current and prospective franchise owners information they need to weigh the risks and benefits of a business investment.… This has led to successfully creating pathways to entrepreneurship for business owners of all backgrounds and enabled these owners to create wealth in communities across the nation.”
You did it, now let’s do it again!
The outcome of Weil’s recent nomination could have been very different if not for franchising “FANs” like you. In the 72 hours before the Senate vote, thousands of franchise owners and dozens of brand CEOs – all members of the Franchise Action Network (FAN) – called their elected representatives in opposition to his nomination.
The Weil campaign and others like it in recent years, including the IFA’s defeat of the PRO Act or the inclusion of special language making franchisees eligible for Covid-era PPP funds, are successful only when decision-makers hear from the full breadth of the franchising community.
In its ongoing efforts to protect, enhance, and promote franchising, the IFA hosts industry-leading events and offers professional development, certification, and networking. We are your representatives in the halls of government, working daily to create a stable and predictable business environment that clears the way for your franchising success.
Regardless of whether you own hundreds of franchise locations or just one, never underestimate the power you hold as a voter, constituent, or employer of people in a legislator’s district. You represent the American Dream and offer the promise of opportunity to each and every one of your team members. In a very real way, your local business ownership is the embodiment of American free enterprise – the opportunity to go into business for yourself.
When legislators hear from you, they think differently about how onerous regulations might affect their district and the people they represent. Outreach like yours was the key in persuading Senators Manchin (D-WV), Sinema (D-AZ), and Kelly (D-AZ) to vote against their party and president’s pick to regulate how and whom we employ.
Your investment in building relationships over the long term will pay the highest dividend. It may seem counterintuitive, but taking time away from your business to build your individual influence with opinion leaders and decision-makers is one of the best investments you can make to grow your business.
In terms of public policy and the regulations that govern the franchise business model, the way forward is challenging. A decade ago, the IFA worked on legislative issues related to tax policy and healthcare. Today the issues we follow are existential to your ability to be in the business of franchising – issues like the California FAST Act (AB 257) and the Franchise Rule.
Franchising has been the opportunity of your lifetime, and right now franchising needs you to share your voice. Become a FAN in your state (it’s free). Or come to Washington, D.C. this September 19–21 for the IFA’s Franchise Action Network Annual Meeting and join upwards of 400 other franchise owners to share your American Dream story with the members of Congress who hold your future in the balance.
Will you give 72 hours to the industry and business model that gave you everything? To join the Franchise Action Network, visit franchiseactionnetwork.org
Matt Haller is president and CEO of the International Franchise Association.
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