WASHINGTON, D.C. (November 6, 2017) – The Coalition of Franchisee Associations (CFA) applauds the introduction of H.R. 1, the Tax Cuts and Jobs Act. It’s time Congress takes on the difficult challenge of updating the tax code and provides an environment that better incentivizes business investments. There are many positives introduced in the Act, such as the simplification of rates for average, American taxpayers; eventual repeal of the estate tax; lowering of certain corporate taxes; expanded deductions of business investments; and others.
“We look forward to being fully engaged in the process to bring forward the concerns of franchise owners,” said Keith Miller, chairman of CFA. “Our representatives need to make sure the franchisees that invest and employ individuals in our local communities have a tax structure that encourages future investment.”
The CFA is concerned, however, about what appear to be steep increases in taxes and complexity for small, pass-through business entities and is actively working with Congress to address these concerns. The elimination of the state and local tax deduction and limited deductibility of interest payments on standard business loans are issues of concern involved in these efforts.
“We need to ensure the tax benefits of this reform benefit the small businesses that are the backbone of growth, jobs and opportunity in the country,” added Robert Branca, CFA vice chair who is currently working on the issue in Washington. “These small businesses are the least able to handle added complexity and cost, and are in most need of tax relief, and we believe lawmakers and the administration want to help them. Our intent is to help show them how best to do that.”
About the Coalition of Franchisee Associations
The Coalition of Franchisee Associations, representing more than 41,000 franchisees who own over 86,000 businesses, which employ over 1.4 million individuals, is the largest franchisee-only association in the country. Its members make up the largest and most reputable independent franchisee associations with a mission “to leverage the collective strengths of franchisee associations for the benefit of the franchisee community.” The CFA — with headquarters in Washington, D.C. — is committed to providing vital support and assistance to the franchisee community at large. To learn more about the organization, please visit http://www.thecfainc.com.

WASHINGTON, D.C. (Oct. 6, 2017) – The Coalition of Franchisee Associations (CFA) is proud to announce that an effort led by CFA Vice Chair Robert Branca, on behalf of the entire franchising industry, has led to the withdrawal by the Treasury Department and Internal Revenue Service (IRS) of proposed changes to Section 2704. These changes could have had a substantial impact on franchisees, as limitations in liquidating their franchise assets would have created an over valuation in gift reporting.

Mr. Branca initially commented on the proposed regulation in this letter, which was widely reported in the business, franchising and estate planning industries. In addition, Mr. Branca testified at the proposed rule change hearing on Dec. 1, 2016, and was joined by CFA Chair Keith Miller, who also testified. Both pointed out the many limitations, specific to franchising, that reduce the value upon sale or transfer; therefore, the current rule that allows for discounting on gift reporting is needed.

“This withdrawal reflects the reality that the IRS sought to ignore and will help countless small family businesses remain with family,” Mr. Branca said.

WASHINGTON, D.C. (Aug. 9, 2017) – In May 2017, the North American Securities Administrators Association (NASAA) approved its “Commentary on Financial Performance Representations” regarding Financial Performance Recommendations (FPRs) made by franchisors under Item 19 of the Franchise Disclosure Document (FDD). The NASAA commentary provides state regulators with guidance on what is required by both federal and state law if a franchisor chooses to discuss sales and/or profits in its FDD.

Specifically, the NASAA commentary adds seven new sections to Item 19 of the FDD to help guide regulators and protect investors from false or misleading FPRs. These new requirements apply to statements in regard to gross sales, gross profits and net profits. The guidance encompasses both company-owned data and franchisee data and includes the use of disclaimers and projections, among other FPRs.

The Coalition of Franchisee Associations (CFA) applauds NASAA for its commentary and believes this guidance will assist new and renewing business owners in making a sound financial decision. CFA urges the franchisor community to support NASAA’s guidance, as it helps alleviate concerns over earnings claims and misleading sales techniques.

“Franchising is a substantial part of the U.S. economy and, as such, presents numerous investment opportunities. It is important that people can feel informed when investing as franchisees and that franchisors offering investment opportunities have clear rules that they can easily follow. This is why CFA actively followed the rule-making process,” said CFA Vice Chairman Rob Branca. “This is a big step as CFA continues to fight for more comprehensive disclosure and transparency in franchising.”

To view CFA’s July 26 webinar on the new NASAA commentary, click here.

WASHINGTON, D.C. (July 7, 2017) – Yesterday, the Coalition of Franchisee Associations (CFA), along with the American Hotel and Lodging Association, the Asian American Hotel Owners Association, the International Franchise Association and the Restaurant Law Center, filed an Amicus Curiae Brief in the U.S. Supreme Court, challenging two Fourth Circuit United States Court of Appeals decisions in DIRECTV, LLC AND DIRECTSAT USA, LLC v. MARLON HALL, ET AL. (DIRECTV) and its companion case SALINAS v. COMMERCIAL INTERIORS (Salinas).

CFA and the four other amici claim these recent decisions are unprecedented, overly broad and will serve to the great detriment of franchisees across the country. While CFA supports protections to prevent undue franchisor overreach, it asks the U.S. Supreme Court to create one federal definition by adopting a common law agency standard so that franchisees can retain their independent contractor status and run their businesses as they have done successfully for decades.

In the Salinas and DIRECTV cases, the court held that the “fundamental question” in determining joint employer status is whether the franchisor and franchisee are “completely disassociated” with each other in regard to the essential terms and conditions of a worker’s employment. This means that any association between the franchisor and franchisee in regard to the employee – including uniform requirements, wage and hour legal compliance and franchise branding matters – can result in the finding of a “joint employer” relationship. If left unchallenged, CFA believes these decisions will greatly damage the franchise model as it stands today.

“Franchising is a national asset that has provided the path to the American dream for countless families, including mine,” stated Rob Branca, CFA vice chairman and Dunkin’ Donuts franchisee. “It needs to be protected, and it is incumbent on people in this industry to take action. CFA is proud to join with our colleagues to pursue this protection all the way to the U.S. Supreme Court.”

To view the full brief, please click here.

As an advocate for small businesses, the Coalition of Franchisee Associations (CFA) is pleased to report progress of pro-franchisee legislation introduced during the Florida legislative session. Sponsored by state Sen. Jack Latvala (R-16) and Rep. Jason Brodeur (R-28), the Protect Florida Small Business Act will level the playing field for owners of franchised small businesses and provide legal protections that will lead to more economic growth and jobs in communities across the state.

On Tuesday, April 4, the legislation was approved 7-2 by the Senate Regulated Industries Committee.

“We applaud the Senate Regulated Industries Committee and Sen. Latvala for championing this important legislation to protect small businesses across Florida. This is a monumental first step toward Florida joining 22 other states that have enacted similar protections for franchise owners in the restaurant, convenience store, hotel and retail industries,” said Keith Miller, chairman of the Coalition of Franchisee Associations. “We are grateful to CFA Director and Dunkin’ Donuts Independent Franchise Owners’ Ed Shanahan for testifying on behalf of CFA about the importance of this measure.”

If enacted, the Protect Florida Small Business Act will provide additional safeguards for franchisees, including protecting against unjust terminations, unfair restrictions on sales and transfers and unsubstantiated non-renewal of franchise agreements.

“Local businesses owned and operated as franchises are a staple of Florida’s economy, adding $35 billion per year and providing jobs for over 400,000 individuals. Even though they invest hard-earned personal resources to build successful local businesses, franchise owners too often are at the mercy of out-of-state corporations that have unchecked power to choose not to extend or renew their operating agreements,” Miller said. “We look forward to working with the bill’s sponsors and other legislators to pass this crucial bill into law and protect Florida’s small-business owners.”

For more information on the Protect Florida Small Business Act, visit www.protectFLbusiness.com.

Washington, D.C. (Nov. 28, 2016) – The Coalition of Franchisee Associations (CFA), the largest franchisee-only association in the country, commends the injunction issued Nov. 22, 2016, by  U.S. District Judge Amos L. Mazzant blocking the U.S. Department of Labor’s (DOL) overtime rule, which was set to take effect Dec. 1. Affecting more than 4 million workers, the rule more than doubled the threshold under which employees must receive overtime pay to $47,476 per year.

“CFA applauds Judge Mazzant’s injunction, which applies some balance to the process and allows for an evaluation of the true impact to businesses,” said CFA Chairman Keith Miller.

While not opposed to raising the salary cap, the CFA supports a measured, rationally based increase that is backed by publicly reported, thoroughly vetted data.

“CFA would support a reasonable increase in the threshold, one that reflects the current economy,” said CFA Vice Chair Rob Branca.

Washington, D.C. (Aug. 8, 2016) – The Coalition of Franchisee Associations (CFA), the largest franchisee-only association in the United States, has grown its membership by welcoming the Jimmy John’s Franchisee Association (JJFA).

“We welcome the addition of the Jimmy John’s Franchisee Association,” said Keith Miller, CFA chairman. “Franchisees are the ones investing, supporting and employing in our local communities. While we often are viewed as competitors, or from different lines of business, franchisees have many common issues that we can best solve by joining forces and working together.”

The JJFA is comprised of 600 total franchisees with 2,500 locations, with an average of 15 employees per location.

“As someone who runs an association, I understand the tremendous value an association can provide to their members,” said Brad Lowry, JJFA chair. “With CFA being a franchisee-only association, I knew that our membership and efforts would directly impact the lives of franchisees across this country. I know Jimmy John’s franchisees will benefit from the collective knowledge of CFA, their efforts, and efforts of their members over the years to come.”

The CFA’s continued growth is a testament to CFA’s efforts to unify franchisees, provide educational tools to the franchisee community and promote pro-franchisee legislation both in Washington, DC and across the country.

Along with the CFA Day Forum’s mainstay legislative components, members of the Coalition of Franchisee Associations (CFA) gained facetime with legal heavy-hitters in a first-of-its-kind format during this year’s event, held March 17-18, in Washington, D.C.

A joint-employer legal panel kicked off the event at the Capitol Visitors Center Thursday morning and featured Michael Lotito, co-chair of Littler’s Workplace Policy Institute; Michael Einbinder, founding member of Einbinder Dunn & Goniea; Robert Zarco, founding partner of Zarco Einhorn Salkowski & Brito, P.A.; and Ron Gardner, managing partner of Dady and Gardner, P.A.

During the panel, Lotito presented attendees with an overview and history of the joint-employer rule. Einbinder discussed the negative impacts of the new joint-employer rule on franchising, while Zarco followed with why the move is good for the industry. Gardner presented the pros and cons of the ruling, and the floor was then opened up for a question-and-answer session and discussion.

“I feel that the panel discussion served to highlight our concerns as franchisees as well as the different approaches that can be taken,” said Dunkin’ Donuts franchisee Robert Blum. “I think that, while the debate was at times lively, it really engaged the entire audience. At a time when we know that the franchisor is loaded for bear, we must be too.”

Following a luncheon highlighted by Congressional speakers, members joined smaller groups for a legislative review and Hill visits. The cross section of small-business owners, representing 14 franchisee associations, were able to address issues facing everyone. Among the topics taken to members of Congress were the Joint-Employer Standard, Americans with Disabilities Act (ADA) lawsuit reform, the Fair Franchise Act and the Small Business Administration (SBA) Franchise Loan Disclosure Act.

“My husband and I were very excited to join and meet with other franchisees from other parts of the country who share our concerns and are committed to trying to make a difference by joining together to speak with our legislators to help them understand that we are families and small-business owners who are providing jobs and want to leave our businesses to our children and grandchildren,” said Colleen Bailey, a Dunkin’ Donuts franchisee.

The day closed with a reception at Stanton & Greene where franchise owners were able to meet and spend time talking with members of Congress.

On Friday the highlight of the 2016 CFA Day Forum brought together franchisees and legal counsel for a roundtable breakfast, providing an unparalleled service to CFA members. Broken up into 20-minute sessions, attendees were able to take away valuable insight into major issues small-business owners face and ask questions pertinent to their situation.

The unique setting allowed participants to hear from Lotito, Zarco, Einbinder and Jeffrey Haff of Dady & Gardner on a range of topics. Lotito covered “Labor Laws: Overtime and Persuader Rules, Minimum Wage and Others.” Zarco and Einbinder addressed litigation topics. While Zarco spoke on “Avoiding Litigation: How to Protect Your Business,” Einbinder provided insight with “Litigation Strategies: How to Gain the Upper Hand.” Haff discussed “Disputed Exit Strategies: Transfers, Renewals and Right of First Refusal.”

“The roundtable discussions were very helpful for me individually because it provided a forum for me to have various questions addressed that were more specific to my own franchisee situations. I felt that I was able to receive insight into some issues by discussing them with other franchisees from various other concepts as well as the attorneys at the tables,” Blum said.

Blum, attending his third CFA Day Forum, said the benefits to the event are many.

“It has been an eye-opener to see how many Congressmen and senators don’t fully understand the franchise concept. Too many of them think that we are employees of the franchisor. When they learn that we are self-employed small-business owners, they are truly shocked,” he said. “It is also alarming how many of the representatives assume that we are in total alliance with the franchisor. When we are able to educate them of our differences, as well as the fact that we are the entity that is employing the majority of their constituency, that is when we have the biggest impact.”