Most franchisors and franchisees are well acquainted with the reality of how their businesses can be negatively affected by government regulation. IFA, which represents these major contributors to the U.S. economy, applauded Calif. Gov. Jerry Brown for vetoing SB 610 that would have devastated the franchise community in California because “Franchising remains the most viable way to own and operate a small business for many Americans, and provides small-business owners with a chance to build equity for themselves and their families.” Although this bill would have only affected one state and those doing business there if it became law, it would have set a new, dangerous precedent. Imagine the impact of such wrong-headed legislation at the federal level.
Now there is some solid evidence about the impact of a regulation-heavy federal government. A new National Association of Manufacturers report, “The Cost of Federal Regulations to the U.S. Economy, Manufacturing and Small Business” finds that:
- In 2012, federal regulations cost $2.028 trillion (in 2014 dollars).
- An average payroll of 21 percent or $233,182 represents the cost burden for an average U.S. business each year.
- 88 percent of respondents consider federal regulations a leading challenge for them.
According to NAM President and CEO Jay Timmons in the report’s executive summary: “The analysis finds that the average U.S. company pays $9,991 per employee per year to comply with federal regulations. The average manufacturer in the United States pays nearly double that amount — $19,564 per employee per year. Small manufacturers, or those with fewer than 50 employees, incur regulatory costs of $34,671 per employee per year. This is more than three times the cost borne by the average U.S. company.” Learn more about the report.
Join IFA’s Franchise Action Network to defend the franchise model against harmful regulations and legislation. The FAN is a grassroots network that brings together the franchise industry to speak with one consistent, strong and collective voice on the issues facing our industry. On the website, you are able to keep up on current news and issues surrounding the industry, take action at the state and federal level and gain information on franchising and its economic impact across the Nation. By joining the FAN, you will become a critical part in educating and informing lawmakers at every level about the benefits of franchising.