Industry News

IFA Urges Senate to Act on Small Business Lending Bill

The International Franchise Association has urged the Senate to include a substitute amendment to the Small Business Lending Fund Act that extends important provisions first enacted by the American Recovery and Reinvestment Act and modernizes the Small Business Administration (SBA) loan programs to make them accessible to more franchise businesses.  “Nearly half of IFA members, operating across more than 90 industries that create 21 million jobs and generate $2.3 trillion in economic activity, indicated that access to capital is the most pressing issue they face in 2010,” said IFA Vice President of Government Relations, David French. 

“Updating and improving the SBA loan programs so that more franchise business owners can obtain the necessary start-up capital will create jobs and help lead our economy on a road to recovery.”  An increase in lending has a direct impact on the number of jobs created.  According to IFA’s recently updated Small Business Lending Matrix and Analysis, for every incremental $1 billion in lending, franchised businesses can create 40,400 jobs and $4.2 billion in economic output. The amendment will increase the maximum loan amounts for the SBA program to $5 million and for the 504 program to $5.5 million.  Source: International Franchise Association

Key Advertising Forecaster Raises Outlook

A key advertising forecaster raised its outlook for global ad spending for a third consecutive time as fears of economic stagnation sparked by the European debt crisis didn't seem to affect companies' marketing plans. Zenith Optimedia, a unit of French advertising and marketing giant Publicis Groupe SA, now expects ad spending to grow by 3.5 percent this year to $447.5 billion.  Zenith said advertising spending came in stronger than expected in the first half of the year in all regions, but especially in North America and Western Europe.

In North America, ad spending is projected to increase by 1.3 percent to $158.5 billion this year, revised from a decline of 1.5 percent. The U.S. is forecasted to grow by 1.1 percent, while Canada is seen advancing at a more robust clip of 5.4 percent. Among mediums, Internet ads are projected to increase the most, up 13 percent to $61.3 billion this year. But mobile and social media ads are seen growing much faster. Television attracts the biggest portion of advertising expenditures, at $177.7 billion, up 6.4 percent this year. Newspapers are seen losing 3 percent of ads, for total spending of $95.1 billion, while radio ads are forecast to fall by 1.4 percent to $32 billion. Source: Associated Press

E-Books Top Hardcovers at Amazon

Amazon.com, one of the nation’s largest booksellers, recently announced that for the last three months, it sold 143 Kindle books for every 100 hardcover books. In the last four weeks, sales rose to 180 digital books for every 100 hardcover copies. Book lovers mourning the demise of hardcover books with their heft and their musty smell need a reality check, said Mike Shatzkin, founder and chief executive of the Idea Logical Company, which advises book publishers on digital change. He predicts that within a decade, fewer than 25 percent of all books sold will be print versions.

The growth rate of Kindle sales tripled after Amazon lowered the price of the device in late June to $189 from $259, Amazon said. That was moments after Barnes & Noble dropped the price of its Nook e-reader to $199 from $259.  One reason Kindle book sales have held their own is that owners of iPads and other mobile reading devices buy Kindle books, which they can read on computers, iPhones, iPads, BlackBerrys and Android phones. But, except for free uncopyrighted books, Kindle owners must buy or download content via Amazon.   Source: New York Times

Clear Answers to Health Rules Needed

The International Franchise Association is urging President Obama and his administration to consider the impact of new health care rules on small business owners as they prepare to implement the Patient Protection and Affordable Care Act, the health care reform bill signed in March.  “We have aggressively worked to provide our members with a better understanding of the law’s impact on franchise businesses and what they need to know as small business owners to comply,” IFA President and CEO Stephen J. Caldeira said prior to a recent White House meeting of business groups and administration officials to discuss the law’s implementation. 

Caldeira said that as the administration moves forward on the law’s implementation, IFA plans to fully engage in the public notice and comment rulemaking process to provide constructive feedback and express the ongoing concerns of the franchised business community.  “These plans are used by many small businesses to provide limited, low-cost essential coverage to part-time, low-wage and seasonal workers who cannot afford or obtain coverage elsewhere,” Caldeira said.  “Under the new law, these plans may have been eliminated, leaving over one million workers without affordable insurance coverage until 2014 when new exchange options become available.  We appreciate the administration quickly responding to this concern and providing a solution for Limited Medical Benefit plans to continue as an affordable option for small businesses and their workers.” Source: IFA Insider

Can Online Learning Transform Schooling?

School is out, and for most students enjoying their midsummer pleasures, class time is a distant memory.  Many schools have framed the looming cuts as a threat to how they operate – even though the teaching force has grown by 10% since 2000, while student enrollment increased by only 5%.  The adoption of online learning is much more than just a cost-saving move for school districts. It has the potential to transform schooling more broadly by allowing students access to a wide range of high-quality offerings and teachers, regardless of where they live. Some students whose classroom courses have been replaced with online versions will find out that they now have access to a whole marketplace of options, in a naturally technology-rich environment quite compatible for them.

In addition, school districts are seizing the flexibility of online learning to provide affordable credit recovery options for students who fail a course they need to pass in order to graduate. Others are utilizing online learning for unit recovery. As soon as a student fails even a unit within a course, the school moves that student to an online module to get back on track. Come the end of summer, the schools students return to will likely look different in a variety of ways. From the students' perspective, that may be a good thing. Source: Forbes

More Returning Veterans Becoming Franchise Owners

Many veterans returning from service in the Mideast are drifting back to former employment in their home communities, but increasing numbers wanting to try something different are turning to the world of franchised small businesses. More than 350 veterans own franchised small businesses in the United States today because of the Veterans Transition Franchise Initiative, an International Franchise Association program known as VetFran, which offers discounted franchise fees to veterans seeking to purchase a franchise.  "The VetFran program is our way of saying thank you to veterans for their service," said Matthew Shay, president of the IFA. "They deserve our help in pursuing the American dream of business ownership because without them to protect our nation, such opportunities would not exist."

Veterans interested in the program can learn more about acquiring a franchise at the IFA Website which has links to participating companies including: Dunkin' Donuts, Maaco, Meineke, Carlson Wagonlit Travel, Cardsmart, Lawn Doctor, UPS Store, Midas, Ace Hardware and many more. IFA represents franchisees, franchisors and suppliers who conduct business across a broad spectrum that encompasses 75 different industries with combined operations in more than 100 countries. Source: The Providence Journal

President Signs Wall Street Reform Bill

After more than a year of effort by its advocates, President Obama signed the Wall Street reform bill into law promising that the measure will put an end to taxpayer-funded bailouts of failed banks. "Because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes," Obama said in a ceremony at the Ronald Reagan Building in Washington. "There will be no more taxpayer-funded bailouts. Period." At the signing, Obama was flanked by a number of lawmakers who worked on the legislation, including Sen. Christopher Dodd, D-Conn., and Rep. Barney Frank, D-Mass., the two committee chairmen who sponsored the bill.

Considered the most sweeping overhaul of the financial system since the New Deal, the law immediately gives regulators stronger powers to break-up financial companies that have grown too big.  Among its many provisions, the law also attempts to shine a light on complex financial products called derivatives and creates a new consumer protection agency that will set rules to curb unfair practices in consumer loans and credit cards. Source: CNNMoney.com

SMB Owners Prove to be Fierce Mobile Warriors

Results from a study recently conducted by American City Business Journals (ACBJ) illustrated how small and mid-sized businesses (SMBs) are increasingly leveraging wireless devices like smartphones and PDAs to work effectively outside the office anytime, anywhere.  Aside from wireless devices, they're also using company Websites, technology services and payroll services to help them manage their business while on-the-go. Resulting from the increasing amount of time spent out of the offices for business purposes, there is also a rise in business travel among these SMB owners.

"Business technology has been developing at a rapid pace over the past decade. Many SMB owners are taking advantage of the benefits that mobile and wireless technology offers for their day-to-day business operations, as well as personal use," said Godfrey Phillips, Vice President for Research at ACBJ. "In the next three years, wireless devices are expected to become even more critical to these SMB owners because they allow the freedom to work outside of the office." The study also found that the degree of business travel and the time spent out of the office has increased. In 2007, 24 percent of SMB owners traveled more than once per month.  Three years later, that figure has jumped to 31 percent. The percentage of time spent out of the office has also increased by 3 percent, from 24 percent of SMB owners in 2007 to 27 percent in 2010. Source: Reuters