2017 was a landmark year for the International Franchising Association as it advocated on behalf of the franchising community and protected the franchising business model. As an industry, franchising is on the rise and continues to be a significant contributor to the United States economy with 733,000 franchise establishments that support nearly 7.6 million direct jobs, $674.3 billion of economic output for the U.S. economy, and 2.5 percent of the GDP.
Below are some of the notable accomplishments and events from 2017:
- The US House of Representatives passed HR 3441, the Save Local Business Act – sending the landmark legislation addressing lingering joint employer uncertainty under labor law to the U.S. Senate with broad bipartisan support. The Wall Street Journal editorial board says Senate Republicans, “ought to force Democrats facing tough elections next year to declare themselves on an issue that is a priority of small and large businesses and was the accepted standard for decades before President Obama’s era of rule by diktat.”
- The NLRB reversed its Browning-Ferris decision, creating a bright line standard requiring, actual, direct and immediate control for a franchisor to be named a joint employer under the National Labor Relations Act.
- The U.S. Department of Labor rescinded an Obama-era guidance memo broadly expanding joint employer liability under the Fair Labor Standards Act.
- Nineteen states have now passed legislation clarifying joint employer status at the state level.
- The Financial Accounting Standards Board (FASB) acknowledged there could be multiple performance obligations in regards to revenue recognition of initial franchise fees, significantly helping emerging franchisors demonstrate financial health. The change followed direct engagement from an IFA-led Task Force.
- Nine IFA leaders attended a White House signing ceremony for an Executive Order allowing the formation of Association Health Plans, paving the way for franchisors and franchisees to pool resources across state lines to provide affordable coverage for their employees.
- Julia Brownley (D-CA) and Claudia Tenney (R-NY) introduced HR 4473, the Veteran Entrepreneurs Act – giving qualifying veterans a tax credit that is applicable towards owning and operating a franchise. The legislation has a dozen cosponsors from both parties.
- Dan Lipinski (D-IL) and Jackie Walorski (R-IN), along with Sens. Donnelly (D-IN) and Collins (R-ME) introduced HR 3798, the Save American Workers Act. The bill would restore the commonsense definition of full-time employment to 40 hours a week under the Affordable Care Act.
- IFA supported meaningful tax reform for local franchise owners, helping advocate for a lower effective tax rate for pass-through businesses than the original legislation proposed, ensuring most franchisees and franchisors will see significant tax relief beginning in 2018.
- The IFA and the Congressional Franchise Caucus hosted several educational events emphasizing opportunities available for minorities in franchising with Rep. Bobby Rush (D-IL); for veterans in franchising with Rep. Joe Crowley (D-NY) and Julia Brownley (D-CA); for apprenticeships and educational opportunities for franchisee employees with McDonald’s.