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State Reports: Advancing Franchising IFA Chairman Leads Members to Puerto Rico

In November, International Franchise Association Chair-
man Jack Earle (a McDonald’s multi-unit franchisee) led a delegation of IFA members to meet with lawmakers in Puerto Rico to discuss the role franchising plays in the local economy currently, and how franchise businesses could be used to spark job creation within the Commonwealth. Over the course of two days, the delegation met with numerous influential legislators, including the Speaker of the House of Representatives, the House Majority Leader, the House Chairman of Rules and the Senate Majority Leader.
Traveling to Puerto Rico with IFA Chairman Earle were, McDonald’s Senior Director of State Government Relations Ed Conklin, Firehouse Subs Partner Stephen Joost, Brinker International Senior Manager of Government Relations Michael Shutley, and IFA Director of State Government Relations Wayne Weikel. Additionally, the delegation was joined by, Ricardo Rivera, vice president of Franchise and Business Opportunities, Inc., a local franchisor of multiple franchise systems, and Gadiel Lebrón, executive director of the Puerto Rico Restaurant Association.
The group’s message that “franchising creates jobs” was well received by legislators. According to the U.S. Department of Labor Bureau of Labor Statistics, Puerto Rico has an unemployment rate of approximately 16.1 percent, the highest among the 50 states and the territories monitored by the Department.
For many franchise systems, Puerto Rico is an important proving ground for franchise concepts, and often serves as a first half-step into an international market.
Firehouse Subs recently announced intentions to open 25 locations in Puerto Rico. When explaining his participation in this lobby effort, Joost said, “Puerto Rico is an incredibly important market to Firehouse Subs. First, it is another opportunity for us to continue our expansion. Secondly, Puerto Rico affords Firehouse the opportunity to bridge out to the Hispanic market without having to deal with all the problems associated with foreign expansion, such as different tax laws, currency translations, etc. Once we have proven ourselves in Puerto Rico, we can then take the bigger step of expanding throughout Latin America.”
The November trip marked the second of such lobby delegations to Puerto Rico during 2011. A similar group traveled to the island last March to advocate against the passage of two proposed bills that would have greatly expanded the role of government in the franchisor-franchisee relationship. Puerto Rico already has a complex set of business contract laws that many businesses find difficult to navigate. Believing the creation of an additional layer of regulation would curtail the growth of franchised businesses in Puerto Rico, IFA has engaged aggressively to defeat the proposed legislation.
Due to legislative rules in Puerto Rico, both bills will carry over into the 2012 session. Accordingly, IFA will remain engaged and continue efforts to oppose these anti-franchising bills. 
Wayne Weikel is director of state government relations and public policy for the International Franchise Association. He can be reached at or 202-662-0792.

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