Each spring, the president proclaims a National Small Business Week to recognize the contributions of small businesses to the economic well-being of America. According to the Small Business Administration, there are an estimated 27.2 million small businesses in America, with more than half of Americans either owning or working for a small business. Small businesses also create 60 to 80 percent of all new jobs in the United States, drive innovation, and increase U.S. competitiveness.
It shouldn’t be a surprise that franchise businesses are a key component of this small-business community, with more than 900,000 franchise businesses spanning the country. But the ability of small businesses to grow and create jobs is severely threatened as the U.S. struggles to recover from the recession and lawmakers continue to focus on solutions that are slow to create jobs. As the largest trade association advocating for a healthy business environment for franchising, the International Franchise Association continues beating the drum for Congress to find solutions that do not worsen our federal budget and contribute to rising deficits. Instead, we contend that Congress should focus on policies that lead to increased lending and less government spending. Based on the experience of franchising, we firmly believe that policies to encourage lending will lead to more sustainable long-term job growth.
Currently, there are several bills being debated in Congress that seek to spur job creation, and IFA is working with senators and representatives for inclusion of key provisions that would help make more credit available through government loan programs. For example, H.R. 4302 and S. 2869 will increase the maximum loan amounts for the Small Business Administration’s 7(a) program to $5 million and for the 504 program to $5.5 million. It will extend the 90 percent loan guarantee rate through the end of FY2010. Given the extreme difficulty many aspiring entrepreneurs are facing in this economy, this increase will allow more individuals to get off the sidelines and access to the startup capital they seek.
The need for more access to credit in the industry is immediate. As I have met with leading franchise business CEOs recently at roundtables in major cities across the country, the availability of credit remains the number-one issue of concern. To help push the legislative efforts over the finish line, we are encouraging our members to aggressively contact their members of Congress and urge them to support these efforts. Issue information to help you contact your congressional representatives can be found at www.franchisingvotes.com.
To help get the message across to Washington, IFA has launched the latest installment of its public awareness campaign designed to highlight the economic impact of franchising on Main Streets across the country.
Launched in 2008, the IFA public awareness campaign builds on the economic impact data prepared for the IFA Educational Foundation by PricewaterhouseCoopers, which illustrates that franchise businesses provide over 20 million U.S. jobs and generate $2.3 trillion in economic activity annually. The new ad campaign includes both print and online ads and highlights how available credit and sound regulatory policies will help franchise businesses create more jobs.
A new print ad features a McDonald’s franchisee John “Jack” Earle whose business office is located on Main Street in Marlton, New Jersey. With a headline, “It’s Main and Simple,” the ad outlines how encouraging small-business growth on Main Streets is a simple way to grow jobs and economic growth. The ad also highlights IFA’s theme, “Building local businesses, one opportunity at a time,” which showcases the local ownership of franchise businesses and the opportunities franchising gives entrepreneurs to own their own businesses.
As voters take their frustrations with lawmakers with them into the polling booth, franchise businesses owners have an opportunity to ensure their voices are heard as Congress struggles to find solutions. As our new ad states, we think the solution is to create laws that help, not hinder, the economic environment for franchise businesses; then franchising will create the needed jobs. It’s that simple.
The new ad and a YouTube video of Jack Earle talking about the importance of franchising in his community, as well as a searchable database that shows franchising’s economic impact by congressional district, can be accessed at www.buildingopportunity.com.
Ken Walker, CFE, is chairman of the International Franchise Association and chairman and CEO of Driven Brands.