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Scaling The Effect Of Obamacare on Franchising

When we blogged last Thursday morning, the verdict on the Supreme Court's ruling on President Obama's healthcare plan had yet to come in. Of course, as we all know, the verdict is in, and the law has been mostly held up, so the question of most relevance to us is what exactly will be the effect on the franchise industry.

Before the ruling, many experts on franchising warned that the health care legislation would stunt the growth of franchising. Not surprisingly those predictions have been echoed over and over again in the days after the ruling.

"The impending costs of health care do not give business owners confidence to open that extra store or to hire more people and create the economic output our country needs," Stephen Caldeira, IFA president said after the ruling was announced.

The restaurant sector was, all in all, quite negative about the ruling. "As it stands, the law wrongly focuses more on penalizing employers and the private sector than reducing health costs. Although the Court upheld the law's constitutionality, many problems remain: It penalizes employers too much; it doesn't do enough to reduce the cost of health care; and it is unreasonably complicated and difficult to implement and administer," said National Retail Federation Chief Executive Matthew Shay (and former IFA CEO) in a statement.

So while you can sense the frustration with the ruling, the silver lining is that franchising has thrived under adverse circumstances before and I'm sure will continue to grow regardless.

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