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As he prepares to take office, President-elect Donald Trump has outlined a bold goal: return to pre-pandemic economic growth rates and “golden age of AmericaAfter four years of being told that the economy was better than how it hit our pockets, this is a welcome change in direction.
To achieve this goal, the new administration will need the private sector – something the Biden era not only largely ignored, but whose regulatory agenda was downright hostile to the concerns of most industries. The franchising industry, which I represent and includes 800,000 small businesses supporting 9 million employees, is ready to work as a resource for the Trump Administration.
Franchising played a key role in the 2024 election, nor did Trump’s turn behind the deep fryer at a McDonald’s in Pennsylvania. Although franchising is often associated with food, most (more than six in ten) are in a different sector, ranging from hotels, salons, fitness, pet care and more.
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Even after several punitive attacks on franchising by the Biden administration, the franchise sector is expected to grow 4% this year, compared with 2.7% for the broader economy.
President-elect Donald Trump works the drive-through line during a campaign photo while visiting a McDonald’s restaurant in Feasterville-Trevose, Pennsylvania on October 20, 2024. Even that brief stint in fast food is a stark reminder of the importance of franchising. the American economy. (Win McNamee/Getty Images)
With a change in philosophy in the federal government, the opportunities are ripe to harness the animal spirits of the franchise. Here are three things the Trump administration can do to boost its economic growth:
1. Make Trump’s joint employer standard law
There is no greater federal priority for franchising than clarifying the joint employer standard. The entire model revolves around the independence between the franchisor (the brand) and its individual franchisees. The former provides the concept, framework and branding for the latter, which is free to run its own business, in return for an agreed fee and according to the brand standards consumers expect, whether in Palm Beach or Parsippany.
In 2023, the Biden administration’s National Labor Relations Board attempted to overturn the 2020 Trump’s Joint Employer Standard and removing autonomy between franchisors and franchisees. As the name suggests, the goal was to put the franchisor on the hook for the franchisee’s employees to increase legal liability and facilitate unionization.
Fortunately, a Trump-appointed federal judge in Texas has thrown out Biden’s overreach, but after four changes to this rule in the past decade, franchising needs a permanent joint employment standard that codifies Trump’s definition. Entrepreneurs can’t plan when the regulatory environment is constantly changing with the occupant of the White House. They need certainty.
2. Reauthorize Trump’s tax cuts
In 2017, Congress passed the Tax Cuts and Jobs Act (TCJA), popularly known as Trump’s tax cuts. Contrary to opponents’ suggestions of “tax cuts for the rich,” these policies became a lifeline for small business owners, lifting the economy to new highs before the COVID-19 pandemic. But if no action is taken, they will all expire at the end of 2025.
A particularly important part of the Trump tax cuts is Section 199A, which allows a 20% deduction of qualified income for pass-through businesses. Because most franchise businesses are structured as a pass-through entity, 199A levels the playing field between small businesses and large corporations, which already enjoy a slew of tax breaks.
To avoid last-minute “budget cliffs” like the recent showdown over government funding, reauthorizing the tax cuts early in the new year should be a priority. Not only would the action provide much-needed certainty to small business owners, but it would also send a clear message that the days of leaving important actions until the last minute are over.
3. Send the ship to the FTC
Before Biden appointed Lina Khan to head the Federal Trade Commission (FTC) in 2021, most Americans had never heard of the agency, and for good reason. The FTC, created a century ago to ensure a competitive business environment and protect consumers, turned under Khan into a hyper-aggressive agency that overstepped the bounds of its authority.
Federal Trade Commission Chair Lina Khan has drawn criticism from the business community for her aggressive approach. FILE: Khan testifies before the House Judiciary Committee at the Rayburn House office building on Capitol Hill on July 13, 2023 in Washington, DC. (Chip Somodevilla/Getty Images)
Instead of standing up for consumers, Khan turned against the business community. She launched numerous lawsuits and investigations, forcing the industry to spend valuable time and resources fending off government regulators instead of growing their businesses.
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In 2023, Khan launched a massive request for information on franchising, designed to provoke negative responses, and then extended the period into the summer of 2024, when she failed to achieve the desired results.
Trump named Andrew Ferguson as his replacement for Khan, and not a moment too soon. There are already promising signs that the tide is turning. The long-awaited junk fee rule announced by the FTC was more narrowly tailored than the original version.
Business owners can’t plan when the regulatory environment is constantly changing with the occupant of the White House. They need certainty.
Achieving America’s “Golden Age” won’t be easy, but that shouldn’t deter us.
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America did not become the envy of the world by settling for less. We have not heeded President John F. Kennedy’s call to walk on the moon in the 1960s, nor President Ronald Reagan’s mission in the 1980s to “tear down this wall” by getting small .
To achieve that 4% economic growth figure, everyone will have to row in the same direction. The franchise community is ready and willing to do our part.
