For immediate release





Contact:
Alisa Harrison, 202-628-8000
Matthew Haller, 202-662-0770



aharrison@franchise.org


mhaller@franchise.org


twitter.com/franchising411


 

WASHINGTON, Jan. 23, 2012-International Franchise Association President & CEO Steve Caldeira, in a letter to President Obama and members of the 112
^thCongress in advance of the President’s Jan. 24 State of the Union address, urged the Administration and Congress to address policies that the IFA says would boost job creation by America’s 825,000 franchise businesses, which support nearly 18 million jobs.

“While poised for modest 2 percent growth in 2012, franchise businesses could grow significantly faster if the President and Congress offered solutions for long term certainty on tax reform that do not raise taxes on small business, create additional credit access and a less burdensome regulatory climate that enables, rather than stifles, job creation,” said Caldeira. “On behalf of the franchise industry, we respectfully urge Congress and the Administration to promote pro-growth policies that will allow small businesses, and in particular, franchised businesses, to expand and create jobs. We stand ready to work with both branches of government to ensure America’s economy continues on the path of recovery.”

According to the letter, which was delivered to the White House and sent to all members of Congress today, IFA outlines six policy priorities that if implemented could spur job creation by franchise businesses:

• 
  
  
  Access to Capital
  
  
  
  
  : Congress needs to pass the
  
  Financial Institutions Examination Fairness and Reform Act
   
  (H.R.3461) introduced by Rep.
  Capito, (R-W.Va.) and Rep. Maloney, (D-N.Y.),which seeks to address the timeliness of regulator examinations, adherence to examination standards and the current appeals process. This bill will go a long way to ensuring qualified mortgage holders do not lose their businesses to overzealous regulators.
   
  
• 
  
  
  Comprehensive Tax Reform
  
  
  
  
  : The current state of tax uncertainty has forced many franchise businesses to hold back on new investments. Many of America’s small businesses file their taxes as LLCs, partnerships, S-corporations or sole proprietorships. They do not pay the corporate income tax. Instead, they declare their business profits on the owners’ personal income tax return and are taxed at the personal income tax rate. Corporate tax reform cannot come on the backs of these job creators and employers, many who may fall into income brackets above $250,000 a year. We ask Congress and the Administration to address tax reforms as a comprehensive package, not with piecemeal fixes. Any effort for reform should lower the overall rate for both corporations and individuals.
   
  
• 
  
  
  Work Force Policy
  
  
  
  
  : Recent decisions by the National Labor Relations Board and the U.S. Department of Labor have created additional uncertainty in the work place for franchise business owners and the small business community as a whole. These regulations include shortening the time frame for holding a union election and for the creation of small bargaining units, or micro-unions. Congress should act now to curb these new policies, which only hurt small businesses and their employees.
   
  
• 
  
  
  Intelligent Health Care Legislation
  
  
  
  
  : According to a Hudson Institute study prepared for the IFA in September, the law could result in the loss of up to 3.2 million jobs at franchise businesses due to the employer mandate provision, which forces many multi-unit franchisees who have more than 50 full-time equivalent employees to pay penalties, thereby discouraging and disincentivizing the creation of new jobs. As a first step, we urge Congress to repeal the employer mandate provision.
   
  
• 
  
  
  Business Activity Tax Simplification (BATSA):
  
  
  
  
  Bipartisan legislation to address the aggressive nature of state tax nexus rulings by state departments of revenue was introduced during the 112
  ^thCongress as H.R. 1439 by Reps. Goodlatte (R-Va.) and Scott (D-Va.). The bill codifies the “physical presence” standard and eliminates confusion for state tax administrators and businesses alike. BATSA would ensure that one standard of taxation applies for taxing multi-state companies, such as most franchisors, taking some of the confusion out of interstate commerce. 
   
  
• 
  
  
  
  Support Veterans as Franchise Small Business Owners
  
  
  : IFA encourages Congress to pass legislation to help our veterans invest in their future. The
  Help Veterans Own Franchises Actintroduced by both Sen. Bob Casey (D-Pa.) and Reps. Aaron Schock (R-Ill.) and Leonard Boswell (D-Iowa) and supported as part of the AGREE Act introduced by Sen. Marco Rubio (R-Fla.) and Sen. Chris Coons (D-Del.) would provide tax incentives for veterans returning home to invest in their own franchise business. The
  Franchise Education for Veterans Act(H.R. 3351), introduced by Rep. Tim Griffin (R-Ark.), would allow veterans interested in purchasing a franchise business to use up to $15,000 in GI Bill funds to pay for franchise education and training programs.
  
  

IFA’s most-recent

Franchise Business Leader Survey
from December 2011, suggests franchisors and franchisees, frustrated with the slow pace of the recovery, are somewhat less positive about the outlook for the 2012. According to comments from survey participants, the less optimistic outlook stems from franchise business owners who are frustrated with the pace of the economic recovery and the “lack of leadership in Washington, D.C.” that is “making things worse, not better.” Franchisors and franchisees revealed concerns about how a range of issues are impacting their bottom line – with weak consumer sales, limited credit access, energy price increases (especially commodities), and the impending health care law, all ranking high. Survey comments revealed frustration with the “lack of support for pro-growth small business policies,” and the “uncertainty created among consumers and investors” by the “negative rhetoric coming out of Washington.”

“Franchise business owners have grown tired of the ongoing partisan rancor, negative rhetoric and perpetual gridlock that is emanating out of Capitol Hill and the White House” said Caldeira. “Elections have consequences and our members will be actively engaged in the political discussion on these issues this year.”

To view a copy of the letter,

click here

.