- Front Page
- Biz Tools
WASHINGTON — The International Franchise Association on Monday released its latest advertisement campaign to remind lawmakers how much franchised establishments contribute to the American economy. The first ad features print franchisor Fastsigns.
The ads stress tax auditor and business consulting firm PricewaterhouseCoopers findings that there are over 825,000 franchised businesses in the U.S. That doesn't include auto dealers, who are both business-format and product distribution franchisees and gas station dealers. The International Franchise Association does not represent the franchisors of these businesses, big auto makers and oil companies. Franchisees in these sectors have considerable clout. Auto and gas franchisee associations are some of the largest lobbying groups in the country. Nonetheless, the franchises that the IFA paid PwC to look into is still a very large group. According to the PwC study, these franchises employ 18 million workers and generate $2.1 trillion in economic activity.
When this ad series that stresses the economic might of franchises was first introduced in 2008, Dr. Francine Lafontaine, professor of business economics and public policy at the University of Michigan's Ross School of Business, told Blue MauMau that she disagreed with the conclusions of the PwC survey. "Franchises are not growing more than the rest of the economy" declared the professor.
Lafontaine added that there is a more fundamental problem with the association attributing such economic activity to 'franchising'. "There would still be restaurants out there if there was not franchising," states Lafontaine. "It is not that franchising is creating all of this [economic activity]."
However, the IFA CEO Stephen Caldeira stressed, "Franchise businesses play a powerful role in creating jobs across the country." He added, "We urge members of the 112th Congress to consider the impact of public policies on the ability of small franchise businesses to grow and help move the economy from a jobless recovery to a job-creating economy."
Last month McDonald's Corporation, a giant chain of 14,000 company-owned and franchised stores in the U.S., held a national day for hiring. It hoped to recruit some 50,000 new workers. A week later, it informed Bloomberg that the restaurants actually hired 62,000 individuals that day, 24 percent more than planned.
The hiring was a bright spot in a gloomy week that saw unemployment benefit numbers rise across the country.
The IFA's first ad for policy makers features D.C.-based Fastsigns store owner Howard James and the CEO of the franchising firm, Catherine Monson. Howard is a former theatre set design teacher at Duke Ellington School of the Arts. James is one of 550 franchisees worldwide. Catherine and Howard are also featured in companion online ads, which along with the prints ads, are appearing in journals that lawmakers frequent.
As the economy recovers from the "Great Recession," the 2011 Franchise Business Economic Outlook forecasts a rebound in the number of establishments, jobs and economic output in the franchise industry. The IFA is able to provide law makers with a searchable database that reveals the economic impact of franchised establishments in each congressional district.
"Franchise businesses are poised for slightly stronger growth in 2011, but tight credit and uncertainty about healthcare costs and other government regulations are curtailing plans by small business owners to open more units and add jobs the industry normally creates during economic downturns," Caldeira said. "The IFA awareness campaign is an important component of our ongoing efforts to demonstrate how onerous laws and regulations impact the franchise industry and small business community."
Editor's note: The IFA wrote to clarify several points brought up in this article. The email can be read here.