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Policymakers can boost job growth by backing franchise business model

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July 19, 2016, 9:50 pm

A central issue shaking up this election has been declining opportunity. Not only is the middle class stretched beyond its ability to cope, the most challenged class of workers – immigrants and workers without a college degree – are having trouble rising out of poverty. Candidates are stumping for a wide variety of potential solutions for revitalizing the American Dream. An essential component to any successful solution is opportunity. No business model in the United States relies more on opportunity than the franchise business model, a catalyst for entrepreneurship and job creation.

Robert Cresanti

Robert Cresanti

Today, franchising provides 9 million homegrown American jobs, including 484,000 here in Colorado. Franchises are creating new employment opportunities at twice the rate of the rest of the economy. Franchised businesses provide employees on-the-job training, offering entry-level workers a chance to launch a career and learn the skills they’ll need in the future. Just ask President Barack Obama and Speaker of the U.S. House of Representatives Paul Ryan, who both got their first jobs at franchises. Yet confusion remains at the highest echelons about this uniquely accessible engine for growth and opportunity for Americans of all walks of life.

Consider for a moment your tasks this week – many of them will likely bring you in contact with locally-owned franchises in your neighborhood. Whether it’s taking your kids to after-school tutoring (Sylvan Learning Center), shipping a package (PostNet) or picking up a quick dinner for the family after your kids’ soccer practice (Firehouse Subs), chances are, these franchises are locally-owned by families in your neighborhood. Don’t let the recognizable brand names fool you, they are “mom-and-pop” companies run by your neighbors.

Stacy Swift

Stacy Swift

And that’s the whole point of franchising—taking a successful concept and scaling it into an opportunity for aspiring entrepreneurs to open their own businesses and serve their communities. For example, at FranNet, we not only create opportunities for entrepreneurs to become franchisees, but we are in the business of connecting would-be franchisees with brands who fit their skills, experience and financial wherewithal.

Franchises like FranNet thrive because participating entrepreneurs – many of them first-time company owners – go into business for themselves, but not by themselves. Being part of a franchise brings significant advantages, including a trusted brand name, a proven operating model, a built-in network of colleagues, and advertising and marketing support. These benefits help franchise owners prosper, and with their success our economy expands. At FranNet, 85 percent of franchise placements were successful after five years, compared to 50 percent of non-franchise small businesses, according to the U.S. Census.

Unfortunately, the franchise industry is still largely misunderstood by policymakers and the public. This has the potential to remake our communities in profound ways, jeopardizing much-needed job creation, threatening opportunities for Coloradans from becoming successful small business employees and owners, and decreasing choices for consumers throughout the state.

The good news is that franchise owners are motivated to protect America’s Main Streets from the negative economic consequences that would ensue should government diminish the franchise business model.

In a tour launching this week, we’ll be visiting neighborhoods across Colorado and other states throughout the U.S. that rely on franchises and showcasing their contributions. Franchise owners will be telling our stories of how we got started and how franchising empowered us to achieve the upward mobility we desired. And most importantly, we’ll be advocating for smart policies and supporting conscientious policymakers who can help keep the franchising dream and opportunities alive for all of our children.

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Stacy Swift is Owner of FranNet Mountain West in Denver, a franchise brokerage and consulting company that helps match people with the right franchise opportunities. Robert Cresanti is President and CEO of the International Franchise Association in Washington, DC.  Both will be participating in a roundtable discussion with local business leaders and elected officials Tuesday, July 19, at PostNet International Franchise Corporation in Denver to highlight the impact of franchising on Colorado communities.

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