from FranNet.com

Franchise industry needs Affordable Care Act repeal, banks to extend credit

The American Jobs Act made big news early this month when President Obama signed it into law. It was hailed as a rare instance of bipartisan cooperation in an age of intense distrust and cynicism between the two parties, and as a measure that could truly jumpstart entrepreneurship by removing regulatory barriers to investment in startups and by allowing “crowdfunding” — Web-based fundraising of small donations — up to $1 million.

It probably is a step in the right direction (the crowdfunding measure especially shows promise). But it’s only one step when the economy needs to run a mile. We think the Jobs Act is a meager substitute for real action, the kind of bold gesture to entrepreneurs we’ve been pushing hard for since 2008.

There’s more opportunity for job-creating franchise expansion than ever before, but prospective franchise owners yearning for a chance to go into business for themselves can’t even get started because of a lack of capital and fear that the government will make it too risky for them to operate at a profit.

Here’s what we think needs to happen:

  • Banks need to extend credit. The economy coupled with overregulation of the financial services industry led to a 20 percent lending shortfall in 2011. Thousands of potential franchise owners with good credit and a willingness to join the franchising revolution are barred from the starting gate because banks aren’t willing to loan them enough money to cover the initial investment. It’s not fair and not good for business.
  • Congress needs to repeal the Affordable Care Act. For small businesses, the “Affordable Care Act” would be anything but — especially the “employer mandate” that would require businesses with 50 or more employees to provide health benefits to their employees or face penalties from the government. We believe this would jeopardize tens of thousands of franchise businesses, which would be forced to choose between downsizing by converting full-time employees to part-time status or absorbing the cost of rising insurance premiums. Neither would help small businesses — or our economy.
  • Congress needs to nullify the NLRB’s “ambush election” rule. The so-called “ambush elections” rule, which the National Labor Relations Board adopted at the end of last year, allows union elections in as little as 15 days, depriving employers of the opportunity to inform employees about unions and address union claims about employers; and denying employees full information about employer-union issues. The rule will take effect April 30 unless a pending joint House and Senate resolution, which we strongly support, nullifies it.

Now is not the time for half-steps to dig our economy out of the hole. We need strong action to empower entrepreneurs and help them start businesses that can provide good, lasting jobs to the nation’s citizens. According to FRANdata, the nationwide franchise information service, each new franchise creates an average of 10 jobs.

We urge citizens, whether they’re in franchising or just concerned about the effects of government overreach and restriction on small businesses, to contact their area Congressional leaders in the House and Senate. Tell them you don’t approve of actions that stifle business growth and keep our economy from recovering the way it should. And as always, for more information about our network of franchise consultants, visit us today at www.frannet.com.

 

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