September 3, 2009

From John Feehery at CNN Politics:

“In truth, August is not the best time to advocate for any legislation. Many members of Congress are slated either to take vacation or an official trip far away from their constituents. Apart from professional grassroots organizers, most other Americans are either focused on their own vacations or getting the kids ready for school.”

Franchise owners don’t have the luxury of taking August off. Now, I don’t expect you to feel sorry for them, but let’s talk about who they are, for a moment.

1.     A local franchise owner is someone who has taken a financial risk, and put his or her own money on the line, {Along with a bank’s money} for a shot at the “American Dream.” These courageous folks have decided to try to take control of their own futures, as opposed to letting their employers do so.

2.     A local franchise owner is an integral part of the community. Whether it’s sponsoring a little league team, giving food to a hunger center, or adding tax revenue to its municipality, local franchise owners give.

3.     A local franchise owner provides employment opportunities. Even if it’s a small franchise operation only employing four people, those four people are employed. {Which is a good thing in the current economy}

4.     A local franchise owner may be your neighbor. They pay Real Estate taxes, spend money at the local grocery store, attend high school football games, and worry about the economy. {Just like you}

When the economy is in recession mode, they are probably feeling some pain just like any other small business. Their sales may be down, their margins may be lower than normal, and they may even be struggling to keep their doors open.  Adding fuel to the fire is President Obama’s health care reform bill that may include a “surcharge” that will affect small business owners, nationwide.

In the original legislation, businesses with more than $250,000 in payroll expenditures would have been required to purchase health insurance for their employees or face a punitive payroll tax of up to eight percent.  The new, improved version has a $500,000 threshold.

But, according to a report by the Ways and Means Committee, only 4.1 percent of all small business owners would be affected by the health care surcharge. The remaining 95.9 percent of small business owners will be completely unaffected by the surcharge.  Who might that be?

Would the owner of your local Subway be affected? There are probably not enough employees to get to the $500,000 payroll threshold, so I would say no.

Would the owner of a multi-unit franchise like Great Clips be affected? There are probably enough employees in a five or six store chain to get to that payroll threshold. If the franchise owner was not providing health care coverage, an 8 percent hit would be huge. Would it be enough to actually cut payroll? Or, would it be enough to change the franchise owner’s philosophy on providing health care to the chain’s employees. {Recently, there has been talk of offering a tax credit to small businesses that choose to offer health care to their workers.}

The International Franchise Association has looked at this issue, and here is what they would like to see happen. 

In the 24/7 news and information world we live in, it is sometimes hard to figure out what the real deal is on big issues like health care reform. Our two-party political system provides for colorful commentary, occasional town hall yelling, and even an op-ed from our President.

It may be a while until all of us see the final draft of this bill. It will be interesting to see how it ends up. In the meantime, I’d like to know your feelings about it? Do we need health care reform right now? Is it top of mind for you? If you are a franchise owner, are you concerned that health care reform will crush your business?

Join the conversation ( 4 )

• MIKE BUTLER 2 years 5 months and 2 days ago

  

  Talk more discuss more…. I am dubious of this, Lets be bold lets be decisive, the longer we wait on this the longer the insurance lobby and other interest groups have to file it down until is yet another “free market” corporate handout. Is the free market wonderful? We would all agree it is, but left to its own devices it will devour itself and all of us along with it (money for the sake of money). I love capitalism and it is absolutely the best driver of innovation and wealth, but when my mother can not retire because she can not afford the insurance…so works on….then is denied a critical test for a heart problem….when I need to travel to a 3rd world country to acquire tests at a reasonable cost…. a contractor of mine can not even get insurance because of chronic asthma….and a family friend is dying because the insurance company would not hire a competent Dr to perform her brain surgery…one sees sometimes capitalism fails us all. And in closing….when I travel the word I see the othe

• PAUL ROSENFELD 2 years 5 months and 9 days ago

  

  Yes I do agree! Health care in the U.S. is superb for many, expensive for all, and inavailable for others. As you note, people should get the facts. It's a shame that most americans get their information from highly politicized 60 second sound bites. And frankly, who has the time to wade into the details? My most fervent wish is for media companies to be able to generate clear factual summaries of things like the health care debate. Unfortunately, a savvy reader needs to go find them in niche publications that are also often, angled Democratic or Republican.

• Joel Libava 2 years 5 months and 9 days ago

  

  I agree that a longer debate needs to take place. All small business owners need to get the facts. Would you agree that we need some change in the system, though?

• PAUL ROSENFELD 2 years 5 months and 10 days ago

  

  great idea: Let's tax the growth engine that gets the U.S. economy out of the recession, with a particular focus on those thriving small businesses who are rapidly growing. I do believe health care needs alot of overhauling, but would start with tort reform for malpractice. I wonder why no lawyer, errr, politician adds this to the reform agenda? :-)... finally, as if the recession, minimum wage hike, and sales tax hikes isn't enough to dissuade small biz owners from starting or growing their business, along comes health care reform. If you take a sec and believe an overhaul is even needed, why in world did politicians want to cram a 2,000 page $1TN bill down American's throats with no discussion or debate. I'm personally aghast at this behavior. It's a shameful abuse of power and a dissrespect for all Americans. We're founded on free speech, let's spend the time necessary to get it right and get consensus.