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Franchise Associations Weigh In on Election

Speaker Boehner speaks
Press conference by Speaker John Boehner (R-OH) on averting the fiscal cliff without raising tax rates. (Official Photo by Bryant Avondoglio, Nov 9)

WASHINGTON — Days after the general election, franchise lobbying groups continue to chime in on the results of the presidential election and their political agenda for the new term.Now that the dust has settled and Florida's swing state results finally have come in, Democratic nominee President Obama has a whopping 332 electoral votes against Republican Mitt Romney's 206. The President also gathered 50.6 percent of the popular vote against Romney's 47.8 percent. The Republicans surprisingly lost two seats in the Senate to the Democrats. Although the Democratic party gained six seats in the House of Representatives, Republicans retained the majority with 51.4 percent, or 242, of the 435 House seats.

"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," said Steve Caldeira, CEO of a lobbying group for largely franchisor issues, the International Franchise Association.

A K-Street based lobbying group founded in 2007 for franchisees, the Coalition of Franchisee Associations, has a similar take. "Franchisees need to feel that tax and regulatory policies create an environment that encourages them to invest in local communities," declares chairman Keith Miller. "They need to be confident that they will be treated as co-investors in their brands, that the business model will be mutually beneficial to both the franchisee and franchisor."

The consensus is that the status quo of political power has been preserved.

"On behalf of the more than 11,000 (paid) AAHOA members, we would like to congratulate President Barack Obama and Vice President Joe Biden on being elected to serve another term," said chairman Alkesh Patel of the Asian American Hotel Owners Association. Founded 22 years ago, the franchisee spokesperson of nearly 50 percent of America's hotel owners declared, "Now that the election has passed, there is an urgent need to address some serious concerns, such as the impending fiscal cliff. We look forward to working with the new Obama administration as well as our members of Congress to resolve this issue, as well as other issues that may affect our members, our industry and small business owners throughout the country."

Big Political Issues

There are two major issues that the largest franchise organizations have come to some degree of consensus about.

  • The "fiscal cliff" facing Congress that automatically raises taxes and could send the economy and businesses into another recession
  • The new healthcare law (aka Obamacare) kicking in and how franchisors and larger franchisees can comply without mandated health coverage and costs pushing them out of business or decreasing the size of their staff

Founded in 1917, the 16,000 paid car and truck franchisee members of the National Automobile Dealers Association represent 32,500 franchised businesses. The organization's legislative affairs and communications director Bailey Wood is concerned about the fiscal cliff. "There is very much a kick the ball mentality in Washington in which no one wants to deal with fiscal matters," says Wood. "We don't need things like this hanging over the economy's head. If the economy does better, more cars are purchased."

Woods stresses that ObamaCare is already the law of the land and less of a concern for his industry. "Dealerships already have very generous health employee plans," emphasizes Woods about the largely skilled and technical labor force in car dealerships that cannot be hired if no health insurance is offered. "ObamaCare is simply going to make providing healthcare plans more difficult and more expensive," says the spokesperson. "Dealerships already provide good health plans. Let's not make it worse."

"Many business sectors, trade groups and CEOs have recently called for tax reform and urged Congress and President Obama to work towards a deal that addresses the rising U.S. debt," proclaims Steve Caldeira of the International Franchise Association. "IFA supports these efforts, however opposes any attempt to rewrite the tax code that does not include a lower overall rate for both corporations and individuals."

NADA also has a concern about tax reform. "The estate tax is a huge issue for dealers," declares the National Auto Dealers Association legislative affairs and communications director. According to Bailey Wood, 50 percent of auto dealerships in this country, which have been protected by strong state and national fair franchising laws for decades, are already owned by second and third generation family members. If dealers have to pay huge estate taxes as the dealership is passed on to the next generation, he says, "They obviously cannot hire." Wood thinks Congress needs to stop kicking the estate tax ball down the road and provide a permanent cut.

Political Contributions by Franchise Associations

PAC Contributions for 2012 by Franchise Association
Chart: BMM. Source: OpenSecrets.org / individual association

There are a number of franchise organizations that contribute substantial amounts to Capitol Hill. OpenSecrets.org, a site that keeps track of the influence of money on U.S. politics, says most franchise-related groups contribute substantially more to Republican representatives than Democrats. For example, NADA, the country's oldest franchise organization, spent 71 percent of its $2,052,000 on Republicans.

The IFA declares that they contributed over $1 million in 2012 to 128 Representatives and Senators who push issues friendly to their 1,300 members.

The Asian American Hotel Owners Association announced that their franchisees and owners contributed $111,000 to 20 Republicans and 16 Democrats. Of the congressional races that AAHOA contributed to, the organization declares that 80 percent of their Republican candidates won office and 44 percent of the Democrat-supported candidates won. Besides the list above, the hotel franchisee group is concerned about the National Labor Relations Board's increase in power to pass work regulations that may increase franchisee liability and cost of business.

The Coalition of Franchisee Associations spokesperson is also appreciative of congressional members that they have helped. "We are pleased that Assemblyman Huffman, the sponsor of California's franchise legislation, has been elected to the U.S. House of Representatives. We look forward to working with Congress and the President on policies that increase franchisee opportunity and investment," says franchisee and Coalition chairman Keith Miller.

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