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Health Care Legislation May Stand In The Way Of Franchise Growth

The IFA has released a new study stating that President Obama's health care plan with stunt jobs growth when it comes into effect in 2014.

According the franchising lobbying group, the Patient Protection and Affordable Care Act will 'negatively impact' 'tens of thousands' of jobs and impact 3.2 million fulltime employees. As the Wall-Street Journal reports, the poll was conducted by free-market policy think tank, the Hudson Institute.

The report is especially critical on the government for forcing food and hospitality franchises to provide health care for their staff. As the report itself states:

"The health care law unintentionally discourages franchisees from owning and operating multiple locations. The law creates a competitive disadvantage for franchisees who do own more than one or two locations. The employer mandate in the law provides an incentive for franchisors and franchisees to replace full- time workers with part-time and temporary workers."

Interestingly, Susan Mills, head of the SBA, has come out in favor of the health-care legislation in an interview with the Wall-Street Journal:

“Currently, small businesses pay around 18% more than big businesses for the same health insurance because of administrative costs...every day, America’s entrepreneurs and small business owners are finding more ways to access affordable health insurance coverage because of the Affordable Care Act.”

Still, many franchisors like Gordon Logan of Sports Clips remains opposed to the act. We hope the IFA can continue to use its lobbying power to ensure the continued growth of franchising.

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