No matter how you feel about our current President, as a franchise owner, you’re probably wondering what changes are in store that will affect how you do business. While President Trump has been anything but predictable in his first weeks in office, we have a few speculations about what’s coming up for franchises.
1. Loosening Up of Tight Employment Regulations
Franchises have understandably been concerned about the implementation of a joint employer standard. Essentially, both franchisors and franchisees would be liable for interactions with franchise employees, which puts a lot of pressure and risk on the franchisors. No one is happy about this.
But there is a buzz that President Trump may loosen the reins on this regulation, as well as the Department of Labor’s new overtime rule. Both could make franchises a little happier.
2. Tax Cuts Put Money Back into Franchises
While, as of writing this post, Trump’s proposed tax cuts haven’t been fully revealed, they are drastic. Paying less in taxes would allow franchises to put money back into the business, hire additional employees, and grow their franchises faster.
And if Trump has his say about the tax cuts, the middle class will have more disposable income. That means they will have more money to spend on goods and services (including those that franchises offer). So tax cuts means franchises can boost sales!
3. Immigration Reform Might Affect Hiring
If your franchise has hired immigrants in the past, that might change, depending on how Trump’s proposed immigration regulations go. It’s anyone’s guess at this point, but if it’s a concern of yours, keep an eye out to see what happens.
4. Business-Friendly Environment Will Foster More Franchises
We know that Trump is pro-business. We may never have had a President quite so savvy about the business landscape, and that could be a good thing for all franchises and entrepreneurs. I think it’s fair to assume that there will be many changes in the Oval Office in favor of businesses, which could boost the US economy.
5. Banking Regulations May Get Breathing Room
Franchisors have long been stressed about the extreme regulations in banking that have made getting funded for franchise systems very difficult. In his first few weeks in office, President Trump has already made moves to scale back the Dodd-Frank Act, which is known for creating more stringent rules regarding bank capitalization (that is, the amount of money that banks must have on hand), increasing compliance and reporting standards for banks, introducing stricter mortgage requirements, creating the Financial Stability Oversight Council (FSOC) and the Consumer Financial Protection Bureau (CFPB), and curbing excessive risk-taking and the existence of too-big-to-fail institutions on Wall Street.
Easing up on these regulations will make it easier for individuals to find financing for franchises.
Only time will tell how much the Trump administration contributes to the franchising industry through his various initiatives. Here’s hoping they’re in our best interest.