International Franchise Association: Government Affairs Update – Part One

By BEN HEINEMANN During the first general session of the International Franchise Association’s (IFA) 2012 Public Affairs Conference, Matt Haller, vice president of public affairs and chief of staff to the president and CEO of the IFA, moderated the association’s government affairs update. Participating in the panel were Judith Thorman, senior vice president of government relations and public policy for the IFA, Jay Perron, vice president of government relations and public policy for the IFA and Dean Heyl, director of state government relations and public policy and tax counsel for the IFA. In part one of this story, we present to you two of the political and policy topics the panel discussed during the conference. How the IFA Uses Its Representation of All Different Types of Businesses on Capitol Hill “The franchise model is not a partisan issue,” remarked Haller during a discussion with Thorman about the IFA’s lobbying tactics. When it comes to job creation, both Republicans and Democrats value job creation, something that the franchising industry is great at. “If you go into an office with Democrats and disagree on a lot of different issues, I can assure you that they are all going to welcome you if you are job creators,” said Thorman. “We have really focused in the last couple of years on the messaging of 'franchising equals jobs.'” What’s unique about the IFA is that it represents a variety of different businesses, which gives it an advantage when it comes to lobbying. As Thorman explained, the IFA does not represent businesses per se, but represents the franchise business model which is the common denominator between all of the different types of businesses under the franchise umbrella. “Our goal is to protect, defend and enhance that franchise business model,” explained Thorman. “We do that in a couple of different ways. We promote the virtues of the model and job creation, which resonates very well with legislators these days. Here is an industry that can create jobs and can contribute to the economy.” The Fiscal Cliff The fiscal cliff is a term that has been thrown around a lot lately, especially as we are in the final days before the election and nearing the end of the year, when many tax credits are set to expire. The IFA’s Jay Perron explained what this means for business owners. “At the end of this year, there are going to be a number of different provisions that are going to expire,” Perron explained. “Some of them have already expired, and a lot of them had to do with deductions you would take on your tax return.” One popular set of provisions set to expire are the Bush-era tax cuts. “It does affect everybody, not just the high income earners. If you were paying 25 percent in taxes, at the end of next year you’ll be paying 28 percent. If you pay 28 percent, you’ll be paying 32 percent,” he continued. “It’s really going to affect everybody if (Congress) doesn’t do something between now and the end of the year.” And thus, we have the visual of a quickly approaching cliff, one that the economy might fall off if Congress doesn’t take important steps before the end of the year. What the IFA is doing, according do Perron, is pushing the Ways and Means Committee and the Finance Committee to do a comprehensive reform of taxes that involves both corporate entities and individuals so the result of any reform is not on the backs of small business. “We take a unique role as we represent both the individual side and the corporate side," Perron explained. So why is the fiscal cliff an important issue for the IFA? “The closer we get to that fiscal cliff, the harder it is for an existing franchisee or a prospective franchisee to make that decision to take that risk and buy that new store or make an additional investment.” The IFA is hoping Congress will take action during the lame duck session before the end of the year.