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The Republican National Convention, which began just hours after a presidential candidate was assassinated, took on even greater significance this year. In my capacity as President and CEO of the International Franchise Association (IFA), I traveled to Milwaukee to participate in a policy panel entitled “Franchising, the American Dream.” I joined Republican Rep. Kevin Hern (OK), co-chair of the Congressional Franchise Caucus, McDonald's franchisee Jimmy Williams, and hotelier Jyoti Sarolia.
Matt Haller and Jyoti Sarolia Photo credit: Matt Haller
To be clear, IFA is nonpartisan and does not take sides in presidential campaigns. We will be in Chicago in August for the Democratic National Convention, and we work with anyone from either party who supports our priorities and fights for small franchisees. That's also why we partnered with POLITICO and CNN with Milwaukee-based Batteries+. We launched a brand activation at the POLITICO/CNN Grill, where over four days we handed out wireless battery chargers to over a thousand attendees and taught convention-goers about the economic benefits of franchising with a QR code linked to IFA's Open for Opportunity campaign.
Related: Check out the 2024 Franchise 500 rankings
Party conventions are always exciting, and this year was no different, especially after COVID-19 limited in-person celebrations in 2020. The enthusiasm and energy were palpable. In my conversations with various stakeholders from all walks of life, certain commonalities emerged. Here are four of them.
1. Unions and franchising are not incompatible
The fiery speech by Sean O'Brien, president of the International Brotherhood of Teamsters, caught people's attention. It was the first time in the 121-year history of the RNC that a Teamster had given a speech. Wall Street Journal The headline read: “Trump Courts Union Votes.” Republicans are not used to having speakers at their conventions railing against “economic terrorism.” But as O'Brien pointed out, the Teamsters have supported Republican candidates before, including Presidents Richard Nixon, Ronald Reagan and George HW Bush.
For the franchise community, O'Brien's presence was a reminder that we have a compelling story to tell and that we need to tell it.
First, our model provides nearly 9 million direct jobs, and not a single one of them is outsourced overseas. Second, franchise jobs pay up to 3.4 percent more and offer more paid vacation and other benefits than non-franchise jobs, according to data from Oxford Economics. Third, franchises ARE small businesses, and that's the advantage of our business model.
Related: 7 ways the expanded joint employer rule would hurt franchises – and your wallet
While we may disagree with the Teamsters or other unions on many points, we agree on one thing: policymakers should focus on creating good jobs here in America, and that's exactly what the franchise community is doing. Even when our brands open new franchises abroad, we bring money back to the U.S. via the royalties paid to operate a U.S. brand abroad, creating a net trade benefit for the U.S. economy.
We must push back against the notion that the franchise model and unions are incompatible. That is false. We can have both, and we have both. It is true that unions' core policy goals, the PRO Act and an expanded definition of joint employer, and franchising cannot coexist, but unions are not inherently adversaries. We oppose the idea that their past policy priorities would bring down franchising.
2. Franchising leads to a reorganization of party boundaries
Second, traditional political and party lines are shifting, providing another golden opportunity to expand the franchise tent. Public polls have shown that former President Donald Trump is up to 30 percent of black voters – almost three times as high as the 12 percent he earned in 2020.
Here, too, franchising plays an important role. Women, veterans and minorities are more likely to own franchised businesses. In fact, more than a quarter (26 percent) of franchises are owned by people of color, compared to 17 percent of non-franchise businesses.
Paul Calkins (IFA), Speaker of the House Mike Johnson and Matt Haller (IFA) Photo credit: Matt Haller
As Clement Troutman, an IFA member, US Navy veteran, author and franchisee of the Tropical Smoothie Cafe in Maryland, wrote in a column for the Washington Times Juneteenth noted, “The past few years have been challenging for Black entrepreneurs. From difficulties accessing capital to the disproportionate impact of the pandemic, Black small business owners face significant obstacles.”
Clement noted, “Franchising can help, but only if elected officials do their part to create the right business environment.” These are wise words and lessons that all candidates should take to heart as they seek to expand their political support base.
3. JD Vance has been a champion of franchising in the past
Senator JD Vance came under intense scrutiny after being named the vice presidential nominee, and nearly every conversation I had with members of Congress and others in Milwaukee centered on what to make of Senator Vance's nomination. In the event of a Trump victory, many see him as the natural Republican nominee in 2028. During his two years in the Senate, Vance has made waves by deviating from traditional Republican orthodoxy, such as marching on union picket lines and praising Federal Trade Commission (FTC) Chair Lina Khan as “one of the few people in the Biden administration who I think is doing a pretty good job.” Yet when it came to franchising issues, particularly joint employers, Senator Vance was on the side of franchising. When the stakes were highest in the repeal of the joint employer rule this spring, Vance was on our side, and that's telling.
4. The next president will have a big impact on franchising
Members of the franchise community – like all voters – judge their presidential election through the prism of past politics. We have an idea of what a second This is what the Trump-Biden administration might look like, judging by their time in office so far. The IFA is certainly much more focused on economic and regulatory vision than political ideology. What is the plan for job creation?
Related: Decoding the Massive Impact of the NLRB's Joint Employer Rule
For example, the individual taxation provisions in the Tax Cuts and Jobs Act (TCJA) expire next year. The law significantly restructured numerous aspects of the federal tax system for small businesses, including cuts in individual and corporate tax rates, a new 20% deduction for income from pass-through businesses, 100% bonus depreciation for capital investments, and a new limitation on the deductibility of business interest. The Republican platform specifically calls for tax cuts, and many members of the Ways and Means Committee that will draft the next tax bill, including Chairman Jason Smith of Missouri, Vern Buchanan of Florida, and Lloyd Smucker of Pennsylvania, have all stressed the importance of ensuring that pass-through businesses, like most franchises, are treated fairly in the next round of tax reform.
Beyond tax issues, the next president will also choose the chairman of the FTC himself, who will have the power to update franchise rules – something that hasn't happened since 2007, the year the first iPhone was introduced. He will also make appointments to the NLRB, including the general counsel, arguably the most powerful position in that agency.
There is a lot at stake for franchisors and franchisees. We do not vote as a monolith or strictly along party lines. But one thing is clear: the list of issues facing franchising is long and it is more important than ever to have a seat at the table. Thanks to the support of so many IFA members and what our brands, franchisees and suppliers do every day, I am confident that whatever November brings, franchising will continue to thrive and the IFA will be at the forefront of fighting for franchising's interests.
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