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Cities: Challenges and Opportunities For Franchising

It was the best of times,
it was the worst of times,
it was the age of wisdom,
it was the age of foolishness,
it was the epoch of belief,
it was the epoch of incredulity,
it was the season of light,
it was the season of darkness,
it was the spring of hope,
it was the winter of despair…”

So begins the literary classic “A Tale of Two Cities.”  These opening lines of the novel by Charles Dickens accurately describe the current situation franchises face at the municipal level. In the past year, cities have introduced, and in some cases, passed ordinances detrimental to franchising. This past September, Mayor Michael Bloomberg and the Board of Health approved a ban on sales of sugar-sweetened beverages of more than 16 ounces in New York City. The sale of fountain and bottled beverages over 16 ounces will soon be prohibited in restaurants, movie theaters, sports venues, coffee shops, food trucks and street carts. The International Franchise Association joined the New Yorkers for Beverage Choices coalition opposing the ban.

“Limiting the sale of beverages to consumers will do nothing more than force small-business franchise restaurant owners to raise prices on other items to account for the loss in sales, or worse yet, consider laying off workers, and neither option is a good one,” said Judith Thorman, IFA’s senior vice president of government relations and public policy. Currently, IFA, along with another coalition, is advocating against any similar ban from being introduced in Washington, D.C.

In Seattle, the City Council is considering an ordinance that would restrict employers from using criminal background checks when screening potential employees.  IFA has joined a coalition in opposition to the measure.

On the Brighter Side

IFA continues to work with the United States Conference of Mayors to build relationships with local leaders and promote franchising as a model for economic development. The industry’s message is simple:  “Franchising = Jobs.”  IFA looks forward to working with Mayor of Kansas City, Mo. Sly James, who is the new co-chairman of the Small Business and Franchising Task Force. The USCM also gives IFA the opportunity to promote its VetFran and MinorityFran programs, two initiatives that reach out to educate military veterans and minorities, respectively, about owning and operating a franchise business.

Increasing urbanization and the economic strength of urban economies in the United States has also increased the importance of municipal governments and regulation. The 2010 U.S. Census indicated that nearly 81 percent of Americans lived in urban areas, an increase from 79 percent in 2000. According to McKinsey & Company, the 30 largest cities in the United States account for 44 percent of the nation’s total population and produce 47 percent of the nation’s gross domestic product.

Building relationships with mayors and other local officials not only gives IFA the opportunity to demonstrate the economic impact of franchising on local economies, but also positions franchising to be a significant voice to encourage pro-growth local policies that impact franchise businesses at a more basic level than even the most visible federal issues. State and local government relations remain a top priority for IFA to preserve, protect and promote franchising at all levels of government. ⎯

Dean Heyl is director, state government relations, public policy and tax counsel at the International Franchise Association.  He can be reached at 202-662-0792 or dheyl@franchise.org.

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