2013 Outlook: The Year Ahead ? 1851 Franchise Magazine

By STEVE COOMES

WASHINGTON?S GRIDLOCK & SOARING DEBT COULD SLOW PROGRESS IN 2013

Few who know Steve Calderia would ever call him a pessimist. But as the president of the International Franchise Association, Calderia finds forecasting the franchising industry?s future for 2013 unsettling.

Bipartisan gridlock in Washington, soaring national debt and looming health care costs have Calderia?typically an industry cheerleader?concerned about the effects of a stalled government on business growth and profitability. Asked to elaborate on several topics affecting franchising, Calderia shared his thoughts with 1851.

With the election behind us, what effect will a second term for President Obama have on the franchising industry?

We congratulate President Obama and the new members of the 113th Congress and respectfully urge them to create bipartisan solutions to address long-term fundamental fiscal reform, including comprehensive tax reform, reforming entitlement programs and reducing the unsustainable debt. However, raising taxes on small businesses, including franchisees, which create 65 percent of all net new jobs, is clearly the wrong approach.

Franchise businesses are in every state and congressional district and they stand ready to accelerate job creation. While this was a status quo election, the current status quo for small business is unacceptable.

With the elections concluded, the current Congress should act immediately to pass a short-term deal that would avert the fiscal cliff by extending all current tax rates until lawmakers in the new Congress can consider a comprehensive overhaul of the tax system. The partisan rancor, negative rhetoric and perpetual gridlock must come to an end so that we can begin to heal this country and get it moving again.

When you speak with franchisors and franchisees, how are they preparing for the formal institution of the PACA in 2014?

Franchisees and franchisors alike are simply running the numbers on their business at this point to determine if they are subject to the employer mandate. Many franchisees are right around that 50 FTE-equivalent employee threshold, so they need to determine if their numbers of full and part-time employees qualify them as a ?large employer? under the law. The lack of regulatory guidance on several key Affordable Care Act provisions that are still being promulgated is preventing them from preparing as thoroughly as they?d like, but these small business owners will have to make tough decisions about how to comply with the law while still growing their businesses.

We also continue to educate our members on a very consistent basis through all of our communications channels (including health care-related webinars) on what we know and what they may need to be thinking about as we continue to move forward and learn more.

What is the biggest challenge the franchise industry as a whole faces in 2013?

Unintended consequences of city, state and federal issues/regulations around health care, workforce policy and banking (at the federal level which affects small business lending), and which have proliferated in recent years, present a huge threat to the industry. So any new legislation or increased regulations that stifle growth, as oppose to enable it, poses a significant risk to achieving and sustaining the economic recovery this country urgently needs.

Additionally, at the federal level, the lingering uncertainty surrounding the direction of federal tax and spending policy also poses a significant risk to having a healthier and sustainable recovery. While franchising continues to perform well, long-term growth and business planning is still weaker than it could be.

Immigration reform will most likely be on the federal legislative agenda a well, so we?ll be heavily engaged in that critical issue area for industry as well.

What?s the biggest benefit to the franchise industry in 2013?

With more than 1 million veterans transitioning out of military service by 2015, veterans returning from Iraq and Afghanistan could be a huge benefit to the franchise industry in 2013, both as highly-qualified employees and franchisees entering the industry.

IFA answered First Lady Michelle Obama?s call to assist in the transition effort through the White House Joining Forces initiative. In 2012, 64,000-plus veterans, military spouses and wounded warriors have started careers in franchising, including 4,314 who have become veteran franchise business owners, since 2011 through Operation Enduring Opportunity, a campaign of the International Franchise Association?s VetFran Strategic Initiative.

As we continue to work hard each and every day to extend career opportunities to our nation?s veterans, we are gratified to recognize the great progress that has been made by employers across all segments of the franchising industry. As we celebrated Veterans Day this year, we continue to recognize that we must keep up the momentum to enable our nation?s veterans to fulfill their dreams and find meaningful career opportunities here at home.

In what industry will franchising see the largest growth spurt in 2013 and why?

Recovery of the housing market will help many sectors of our industry, including real estate and residential services tick upward. Additionally, as 10,000 baby boomers hit the age of 65 each day, the in-home healthcare sector will continue to grow as well.

STEPHEN J. CALDEIRA

President and CEO of the International Franchise Association, the world?s oldest and largest organization representing the franchising industry.? Caldeira works with the IFA board to set the direction for the organization?s strategic priorities: government relations and public policy, including the association?s political action committee, media relations, public relations and professional development programs and research initiatives.

Source: http://www.1851project.com/2013outlooktheyearahead/

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