The first 10 years of the 21st century have been a decade of incredible growth in the franchise industry and, as a result, game-changing growth for the International Franchise Association. Over the past 10 years, economic output increased by an astounding 40 percent in the franchising industry.


As the industry grew, so did the IFA. This decade, IFA franchisor membership grew 30 percent, franchisee membership grew 1,400 percent, and supplier membership grew 150 percent. IFA revenue grew 70 percent, and receipts for the IFA Political Action Committee, FranPAC, grew 1,152 percent, with members contributing over $715,000 during the 2010 midterm election cycle to support 138 pro-business federal candidates. 


This growth in resources has allowed IFA members to significantly increase their presence and influence in Washington, D.C., to protect, enhance and promote franchising.


This strong financial performance of the IFA and the industry has occurred despite several economic downturns and the more recent financial crisis. However, the anti-business, pro-regulatory agenda of the past two years has tested the grassroots and advocacy resolve of the franchise industry, clearly threatening our ability to sustain the growth we have experienced.


To address these threats, IFA centered its public policy resources on efforts to improve the business climate for franchise businesses, including the 42 percent of our membership ranks that are represented by chain restaurants. While we worked on a host of issues, including tax reform, card check — which is essentially dead — FTC rulemaking authority and a host of state initiatives, four issues in particular significantly impacted the franchise business community in 2010. 



Capital access and SBA lending. After a nearly two-year effort, one of IFA’s top priorities was accomplished. President Obama signed into law a bill that permanently increases the Small Business Administration’s 7(a) loan limits from $2 million to $5 million. The legislation, popularly known as the Small Business Jobs Act, also temporarily extends the 90-percent loan guarantee rate and reduces borrower fees in the SBA program. 


To further our commitment to increase lending for our members, IFA will conduct a first-ever Small Business Lending Summit in the spring of 2011. The summit will bring together small business leaders, lenders and government officials to explore the challenges facing banks and borrowers and the opportunities to loosen credit and spur job creation. Most importantly, the summit will focus on developing tools and an approach to match-up supply and demand for franchise community credit. 



Health care reform. President Obama in March signed into law the Patient Protection and Affordable Care Act.
During the legislative debate, IFA and a coalition of
employer groups pressed Congress to enact significant cost containment provisions along with the enhanced benefits that included expanded access to coverage. When 
effective cost-containment protections were not added to the bill, the IFA strongly opposed the measure.


The focus now shifts to 
ensuring the best possible implementation of the new law during the regulatory process. The IFA remains concerned that health care coverage options for small employers and franchise systems will be unaffordable or inadequate. The root of the problem is that the health care costs and premiums have been rising much faster than the rate of inflation or the rate of employee wages. We have been actively engaged in the regulatory process to ensure that this new law works for small franchised businesses.


Repeal of expanded 1099 reporting. Before the close of
2010, several attempts were made in the House and Senate by both political parties to repeal the expanded 1099 reporting requirement that was included in the Patient Protection and Affordable Care Act. The IFA has taken a bipartisan approach in working with members of Congress and has recently visited the White House on several occasions to press for full repeal of the 1099 provision. We remain cautiously optimistic that the increasing broad support for repeal will soon end this onerous provision. 



Menu labeling. Another part of the health care reform package is the new law requiring nutritional information on restaurant menus. IFA has actively engaged the FDA during the early phase of implementation, urging the agency to carefully consider the impact of the rules on small businesses as they interpret the intent of Congress. 


In spite of the many challenges facing the economic health of franchising, the strength of the franchise model has prevailed as one of the best ways to create jobs. As we head into the next presidential election cycle, the IFA will continue to aggressively execute our three strategic priorities to fund world-class advocacy, media relations and professional development programs. 


If the franchising and restaurant industries are to maintain the influence that will be needed to effectively address the critical business issues of the day, we must continue to increase our ability to positively influence and impact legislative and regulatory outcomes. I am confident that with the franchising industry’s collective support, the IFA will continue to remain effective and increasingly relevant in an ever-changing public policy arena. 



Steve Caldeira is president and chief executive of the International Franchise Association in Washington, D.C.