In our second blog post of 2017, were delving into Part II of our prediction series. It’s a closer look at what factors may impact the franchise industry and what issues will be relevant to franchisees. The first installment focused on trends such as hot brands and technology, but this edition will take a closer look at governmental regulations that may affect franchisees and franchise operators on the ground. Here are three key updates you need to know:
Minimum Wage Law
In seven states and 14 cities, most notably Seattle, municipal governments have passed a $15 minimum wage rate for full-time employees. The law applies to businesses—including recognizable franchise brands—with under 500 employees. Reaction to this news has many businesses considering automation of certain jobs. For instance, many quick service restaurants are openly experimenting and implementing ordering kiosks to replace hourly workers.
This is one to keep an eye on. This new law was supposed to have taken effect on Dec. 1 where the Department of Labor implemented a new overtime pay law. It was designed to increase the current threshold in which salaried workers are exempt from overtime from $23,660 to $47,476 (or $913 per week). However, before the law went into effect, a federal judge in Texas struck down the proposed legislation as he ruled the law does not allow the Labor Department room to decide which workers are eligible based on salary levels alone. Other factors, including job duties, must be accounted for in deciding wages.
SBA Franchise Lending Update
The Small Business Association has announced a new standard operating procedure concerning franchise financing. The agency will no longer review specific franchise agreements, instead amending that franchisors and franchisees to authorize a non-negotiable, standard addendum for government-guaranteed lending. For further reading, it is greatly recommended that you visit the detailed SBA Franchise Businesses page on the web.
At first glance, these updates may weigh heavily for franchises and potential franchisees. But through better information, you’re best able to adapt and adjust your 2017 planning in order to accommodate any regulations that may affect your business.
We hope you’ve enjoyed our two part 2017 Predictions Series. We wish all of our prospective entrepreneurs both peace and prosperity in 2017.
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