Looks like it could be a long, hot and potentially expensive summer for Dunkin’ and other quick service franchise owners around the country. SeveraLabor and activist groups have been on a roll around the country, championing proposals that push up costs for franchise owners and other small business owners. Launched nearly a decade ago, the Job Creators Network (JCN) is devoted to defending the interests of the small business owners who make the U.S. economy tick, from small manufacturers to franchisees.
Started by Home Depot co-founder Bernie Marcus, JCN recently embarked on a nationwide “Tax Cuts Work” bus tour. The aim is to get the message out about the benefits for small business owners of the Republican tax bill passed last year. Independent Joe caught up recently with Alfredo Ortiz, JCN’s president and chief executive.
Ortiz and JCN played a significant role rallying small business support for the Republican tax cut bill. Working closely with former House Speaker Newt Gingrich, Ortiz oversaw a multimillion-dollar media campaign and an avalanche of 550,000 emails urging members of Congress to take action.
Born to immigrant parents in Southern California, Ortiz was an executive at Boston Consulting Group and an expert on boosting the effectiveness of corporate sales forces before Marcus tapped him to run JCN.
As a counter to the labor movement’s Fight for $15 campaign, JCN last year launched “Fight for $50K,” a campaign aimed at shifting the focus from raising the minimum wage to boosting job skills and workforce development training to prepare more people for middle class jobs paying $50,000 a year.
Tell us about the Tax Cuts Work bus tour and what JCN will be doing over the next few months.
We have the first two legs of the bus tour [running] through November. We are pretty much going to every corner of the country, from Seattle to Orange County and from Upstate New York to Miami. The tour will highlight the advantages for small business owners of the tax cuts. We have 3,500 stories of small business owners who have benefited from the tax cuts.
For example, there is a small Illinois manufacturer with 16 employees and $3 million in revenue. She has gone out and bought $500,000 in new equipment and can deduct that immediately thanks to the new tax bill. She gave everyone full benefits and raises. This is an area, manufacturing, people were saying was dead just three or four years ago.
How involved are franchise owners in the Job Creators Network?
The International Franchise Association is a member of JCN. [So too, is the Coalition of Franchisee Associations – the CFA.] Their members are our members; we fight for them. The franchise community is a huge part of what we fight for as well. We believe the franchise model is one of the best ways for any hard working American – whether black, Hispanic, Asian or female – to be able to get their arms around a business and call it their own.
One of the biggest challenges facing Dunkin’ and other franchise owners is a shortage of workers. What, in JCN’s view, should be done to solve this problem?
There are more jobs out there right now than people looking—6.3 million compared to 6 million job hunters. The big challenges we are hearing from franchises in general is where do we find the people? There are a lot of people out there who are qualified to work but are not entering the workforce. They are dis-incentivized. A lot of people don’t know about the earned income tax credit (for low-income workers). Let’s rename it the Working Americans Tax Credit. A study found that using this exact same description, people were six times more likely to apply for the credit, which you have to have a job to take advantage of. I think [President Trump] is spot on in focusing on workforce training and skills development. If you make $9 an hour and you get an extra buck for flipping burgers, newsflash, you are still flipping burgers. Let’s say you are over 25 and you are flipping burgers. It is probably because there is a problem somewhere. We should identify these folks and get them the skills training they need.
Despite efforts by the Trump administration, the National Labor Relations Board’s joint-employer rule is still in force. The regulation opens up franchisors to legal liability over complaints about pay and working conditions, which critics say undercuts the independence of franchise owners. What is JCN’s view of the controversial rule?
We actually protested outside a couple of NLRB offices. We had small business owners carrying signs like “Keep your hands off my business.” The owners become managers. It really makes no sense. We thought it was a horrible attack on the franchise system. We were really excited the Trump administration came along and changed the [Board’s] position. It is in the hands of Congress now. Franchising is truly one of the easier and best ways for any hard working American to get a piece of the American Dream. A lot of people don’t understand that the Dunkin’ Donuts down the street isn’t a big corporate entity. It’s a franchisee – a hard working American pursuing the American Dream. The joint employer rule is an attack on our way of doing business.
Health care costs are a major issue for franchise owners. What is JCN’s view of the new federal rules that will enable small business owners and other companies to band together and purchase coverage?
When Obamacare passed, many small business owners couldn’t afford it and had to drop health care coverage. The Trump administration’s Associated Health Plans initiative will be more affordable and enable millions of Americans to have health benefits. The ability of plans to go beyond state lines and [allow] businesses to bring leverage to the issue is important.
We’ve talked a lot about the impact federal regulations can have on small businesses and franchise owners. But aren’t there major regulatory issues on the local level as well?
Regulation is easier, but, hands down, local red tape is still an issue. The president can only do so much. We have to take it all the way down to city hall to make sure that citizens all around the country understand red tape kills the economy. It’s the permitting process—the time to get things done. Time is money, especially if you are buying a piece of land. •
The Job Creators Network calls itself, “The Voice of Main Street,” and believes the best defense against bad government policy is a well-educated public. It attempts to accomplish this through employee education. You can learn more at their website: www.jobcreatorsnetwork.com.