With mere days remaining before the 2012 presidential election, we thought it was important to take a look at what franchising means for the economy and jobs, one of the most talked about topics on the campaign trails.
Franchises are a very powerful part of small business across the country, and small business always plays a significant key in the election season. Especially given the slow recovery of our nation’s economy, it is small business that will ultimately turn the economy around. And the politicians know that.
One of the most significant issues that those looking to go into small business should keep their eyes on as the election draws near is the Affordable Care Act. The most damaging component of the act is the mandate that employers with 50 or more employees be required to provide health benefits to its employees. Employers that failed to do so would be punished with taxes and/or penalties. On the surface, it’s been billed as an opportunity for access to more affordable healthcare for all Americans. But digging into it, one can quickly see the damage it will do to small business in not truly accomplishing its goal.
First, it will discourage small businesses from expanding and growing their business beyond that 50 person threshold. Second, it will actually encourage small employers to potentially reduce their full-time payroll to 49 or less employees. Both of these are not sensible options in the interest of growing small business. Further, the costs associated with this act will simply be passed onto the American consumer, increasing the cost of goods down the line. We’ll all pay more at the grocery, at retail outlets, at food establishments – across the board, consumer good prices will go up.
The Affordable Care Act will have a significant impact specifically on the franchising industry, as many franchisees potentially seek to expand their business. It will cause a tough examination for business owners to determine if the benefits of growth outweigh the negatives of the additional burden of providing health care – or absorbing the penalties of not providing health care — to all its employees.
When it comes to the franchise industry as a whole, this election will have a significant impact. President Obama ushered in the Affordable Care Act, while Governor Romney has promised to attempt to repeal the Act. It’s FranNet’s hope that the election will provide the necessary boom to the economic outlook for America as we’re all seeking more jobs to be created. As the economy continues to rebound, many Americans still find themselves out of work. Many of them are looking into franchise ownership as a self-employment option. This year saw some very nice gains for the franchising industry as roughly 14,000 outlets were added across the country (adding approximately 140,000 new jobs). All early economic signs point to franchising setting itself up for a banner year in 2013. And a healthy, strong economy will only help that outlook.
Regardless of your party affiliation or stance, every American needs to make sure they exercise one of the most important rights we have – and that’s the right to vote. Make sure you get to your local polling location next Tuesday and let your voice be heard.