If you believe that economic recovery is dependent on job creation, you’ll be both impressed and frustrated with the impact the franchise industry holds in the balance.
I just returned from Washington DC where the International Franchise Association held their annual IFA Public Affairs Conference.
Consider that one out of every eight jobs in the private sector is with a franchise company. When a local Dunkin Donuts/Baskin Robbins opens in your area, 30 new jobs are created. There are 828,000 franchise businesses in theUS, employing 9.1 million people who are paid $304.4 billion in direct payroll. That creates $468.5 billion to GDP.
It gets bigger. Each franchise establishment needs supplies, services and professional support. Roll that up nationwide and franchising fuels 17.4 million jobs, $707.6 billion in payroll, which is 9.7% of all private/non-farm payroll, and $1.2 TRILLION to GDP
Now comes the frustration. So jobs grow when Franchising grows, right? To start a franchise business, a local business person (the employer) needs capital funding. The funding is not coming through. No new lending means no new jobs.
Ken Walker, the Chairman and CEO of Driven Brands (owners of MAACO, Meineke and EconoLube) said his company has 100 people signed up to open new franchises. They can’t get funding. Karen Powell, CEO and Founder of Décor For You, told me she has two new franchisees inPennsylvania, but the banks aren’t coming forth with the capital.
What’s being done?
The IFA’s Public Affairs Conference is a well-orchestrated lobbying blitz where owners of both local franchisees and corporate franchisors meet with their US Senators and Representatives. After great networking and instructional events at the JW Marriott on Pennsylvania Avenue, the IFA literally buses this franchise army to the Capitol. With pre-scheduled meetings in the office of senators and congressmen, the franchise army presses the case for easing capital lending to franchisees to fuel economic growth.
The power of the purse strings in our nation’s banks can stymie or stimulate our economy. If you agree, send a tweet or post or a good ol’ fashion letter to your local congressional representative. For contact information on your local congressman or senator, go to http://www.congress.org. They work for you and you pay them. Be heard!