Executives to Know: Steve Caldeira, IFA
Executives to Know: Steve Caldeira, IFA

The IFA president and CEO is pushing franchise growth to the next level.

The last 55 years have played witness to some of the most significant business advances in human history, from lithium-ion batteries and LCD screens to the birth of the Internet age and, yes—the critical invention of your phone’s mute button. The International Franchise Association turned 55 this year as well, marking more than half a century helping to shape the entrepreneurial spirit that now supports more than 21 million jobs and generates $2.3 trillion in annual economic activity.

Since 2010, those efforts have been led by IFA President & Chief Executive Officer Stephen Caldeira. Caldeira, who holds a degree in political science from Providence College, recently spoke with 1851 Franchise about the changes he’s presided over at IFA, and the future he sees for franchising.

1851: How did your previous positions at Dunkin’ Brands Inc., The Elliot Leadership Institute, PepsiCo Inc. and (Public Relations Firm) Burson-Marsteller help prepare you for your position at IFA?

Steve Caldeira: Since my PepsiCo days, I had been very familiar with IFA as we were strong supporters of the organization given the vast array of customers we had across many of the segments within the franchising industry. At Dunkin’ Brands, we ramped up our engagement when I came on board in 2007.

Dunkin’ Donuts founder Bill Rosenberg helped to start the organization in 1960 to protect the franchise model from legislative and regulatory threats from all levels of government. Five years later, there are no dull days (trust me) with all of the very serious public policy challenges that we have been navigating on multiple fronts. At every turn you take the opportunity to learn from great leaders, great companies and then you synthesize and integrate those insights with your skill set and experience to execute for success, to be the best you can be at whatever you choose to do.

1851: How has the increasing globalization of the economy changed franchising?

SC: Globalization has changed franchising in fundamental ways. Many large franchise organizations such as Yum! Brands currently draw more than two-thirds of their revenue from outside the U.S. To put that in perspective, the 200 largest franchisors in the U.S. already have more than one-third of their units overseas and they are adding four units internationally for every domestic unit they open. International franchisors are changing the face of franchising in the U.S.

The franchise business model is adaptable and has succeeded across virtually every culture. The model’s scalability gives it the unique ability to help quickly developing economies. Franchising creates business owners, helping build and sustain a middle class. It also has large indirect benefits for developing countries, such as establishing supply chains, transferring business best practices to new economies and establishing and enforcing quality standards.

1851: What unique challenges face the franchise industry ahead?

SC: Though the franchise industry is expected to grow and create more jobs at a faster pace than the rest of the economy in 2015 for the fifth consecutive year, federal regulatory intervention promulgated by the National Labor Relations Board (NLRB) with the support of the Service Employees International Union (SEIU), could stifle growth projections significantly. The NLRB, at the request of the SEIU, has endangered the entire franchise business model through its proposed new “joint employer” ruling.

This ruling, which states that franchisors and franchisees can be designated as joint-employers, could put the brakes on what looks like a banner year of accelerated growth and job creation in the franchise sector. A change in the current “joint employer” standard would fundamentally alter the franchise relationship between franchisees and franchisors, changing franchisees’ role from employer to employee, and would ultimately lead to increased, unnecessary and costly litigation.

1851: What are your goals for franchise industry growth?

SC: Short term, we will continue to aggressively advocate against seemingly unchecked government overreach from the National Labor Relations Board, as they seek to change the current, time-tested “joint employer” standard. In terms of long term goals, the IFA will educate lawmakers and policy makers at the local, state and federal level on the vital role franchising plays in strengthening local economies and communities. The association will also continue its (outreach) efforts, via IFA’s VetFran initiative, to help veterans find meaningful employment through franchising as they transition to civilian life.

1851: Why should a franchisee be a member of IFA?

SC: By joining a franchise system, people enjoy the benefits of going into business for themselves without many of the risks of doing it by themselves. IFA is dedicated to promoting, protecting and enhancing the franchise industry through its various advocacy and grassroots initiatives, as well as ensuring its membership has access to a variety of educational programming. IFA Educational Foundation Initiatives such as Franchising Gives Back, which highlights the many charitable works within the industry, and NextGen in Franchising, which brings together young entrepreneurs with leading franchise executives, reflect the dedication within the franchise industry to strengthen their communities and foster growth.