Given the wall-to-wall media coverage of the “Great Resignation,” it’s not a surprise that two years under pandemic conditions have led millions of people to rethink their careers and life goals. Whether inspired to re-balance work and family or motivated to launch a business of their own, people across the country are redefining success for themselves.
During this time, the International Franchise Association has been monitoring a sharp increase of interest in franchise ownership, particularly among first-time entrepreneurs. People who want to be their own bosses and chart their own futures are coming to the franchise industry to achieve those dreams.
However, word of franchising’s advantages hasn’t fully penetrated Washington, D.C., and the lack of awareness of the benefits of franchising among some lawmakers has blunted efforts to enact policies to invigorate this vital segment of the business community. It’s especially dispiriting at a time when franchises are struggling against rising supply chain costs and severe hiring challenges. At this moment, 8 in 10 franchise owners say that a changed labor market is undermining growth, and 9 in 10 have openings they can’t fill.
Unfortunately, the White House looks to be no help. President Joe Biden used his State of the Union address to push policies, such as the stalled PRO Act, that would make it harder, and in some cases impossible, for franchise owners to expand, franchise workers to become owners, and aspiring entrepreneurs to open a business in their community.
Instead, Biden should champion franchise brands and independent franchises, which are a key engine fueling the nation’s economic revitalization after the pandemic. Independent franchises have historically outperformed comparable nonfranchise businesses during challenging times. For example, franchises shed fewer jobs during and rebounded faster after the Great Recession. Franchise strength continued through the worst of COVID-19 as franchises outpaced most other sectors, with 16.3% growth and an 8.8% jobs boost in 2020.
There is good reason for the Biden administration to embrace the franchise sector now — because if it truly wants to “Build Back Better,” America needs franchises. For one thing, franchising remains America’s greatest workforce development and career training industry. Hundreds of thousands of people each year take their first professional role within a franchise and learn skills they will use over a lifetime. Many thousands more are promoted to leadership within franchises and franchise brands.
Franchises are also key local employers, paying higher wages and better benefits than comparable nonfranchised businesses. The nature of most franchises’ products and services means that independent franchises overwhelmingly hire, train, and promote residents from the communities in which they operate. They also purchase a significant proportion of goods and services they need from local providers.
These factors tie franchises closely to their neighborhoods, which are often minority and underserved communities. In fact, more than one-quarter of franchised businesses are owned by people of color. Black-owned franchises earn 2.2 times as much as their nonfranchise counterparts. Franchising can increase access to capital, offer business-related training, and provide advice and assistance from the brand and fellow franchise owners — all critical features helping to reduce barriers to entrepreneurial success.
The franchise business model truly empowers people from all walks of life to invest in themselves and those around them. The stories of these business owners will be among those shared to highlight how the industry is “Open for Opportunity” to anyone with the dream and the grit to come along.
A first job, a fresh start, the chance to be your own boss, the means to support a family or renew a local economy — whatever you’re seeking, it can be found in franchising. Hopefully, Biden will recognize this before it’s too late and empower the franchise workforce to continue making incredible things happen in communities nationwide.
Matthew Haller is the president and CEO of the International Franchise Association.
