FOR IMMEDIATE RELEASE

Contact:

Matthew Haller, 202-662-0770

Jenna Weisbord, 202-662-0766

mhaller@franchise.org

jweisbord@franchise.org

IFA SURVEY: NEARLY 80 PERCENT OF FRANCHISEES MAY HALT HIRING WITHOUT EXTENSION OF CURRENT TAX RATES

Franchises call for tax certainty as Congress works toward comprehensive tax reform

WASHINGTON, Dec. 10, 2012—According to a new survey of franchisees and franchisors, franchise business growth could grind to a screeching halt if the nation does not extend current tax rates scheduled to expire at the end of 2012 as part of the so-called “fiscal cliff”. The results of IFA’s annual Franchise Business Leader Survey, conducted Nov. 13-28, show 79 percent of franchisees and 73 percent of franchisors believe failure by Congress to extend current tax rates will have a negative impact on hiring and growth plans moving forward.

“What we need in this country is jobs, and the majority of that growth can come from the small business and franchising community if we avoid diving over the fiscal cliff,” said IFA President & CEO Steve Caldeira. “Congress and the administration must find a way to decrease spending and raise revenue without raising tax rates on job creators. While the President has been on a charm offensive with corporate CEOs, the interests of franchisees and other small businesses seem to be taking a back seat, despite his campaign rhetoric on the importance of small business growth to the economic recovery. What we need is for the small business community, which creates 65 percent of all net new jobs, to have a seat at the table in this debate.”

IFA has called on Congress to address the impending fiscal cliff and urged lawmakers to commit to produce a comprehensive tax reform bill that lowers both corporate and individual rates by a certain date, which would create greater long-term growth for the franchise industry.

Comments from survey respondents show franchisors and franchisees are extremely concerned about the prospect of higher taxes on their business.

Catherine Monson, CEO, FASTSIGNS International:

• “We are deeply concerned that increases in personal income tax rates will adversely impact the growth of our franchisees’ businesses as 99% file as Chapter S corps.”

Gail Johnson, Rainbow International:

• “Small business owners are ‘pass through entities’ not the “rich”. Taxing small business owners will greatly impact their ability to reinvest in their businesses and grow.”

Chris Grandpre, Chairman and CEO, Outdoor Living Brands, Inc: 

• “Legislators need to work to be disciplined in a search for spending reductions to minimize or eliminate tax increases – tax increases will stagnate and put at risk the slow economic recovery and have a negative impact on both consumer confidence and spending.”

Adam Soccorsi, Owner, AutoQual:

• “Any increase in taxes will clearly affect economic prosperity for myself, my family, my employees and their families, and my community.”

Jim Flickinger, President/Owner, BrightStar Care of Dupage-Wheaton:

• “We run a $4,000,000 operation here. I have created 230+ jobs over the past 3.5 years. All I get from the government is more regulations, taxes and bureaucratic hassle. The outlook looks worse for the near to long term future.”

Joseph West, President, Brooklyn Water Bagels Franchise Company:

• “Our main concern is the inability to predict the future due to the inability of the political process in Washington, D.C. to develop rational taxing and business policies.”

Melanie Bergeron, Chair of the Board, Two Men and a Truck International:

• “It’s simply the uncertainty that makes it hard to plan.”

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About the International Franchise Association

The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.