SVP Government Relations & Public Affairs, International Franchise Association
It’s been more than a year since COVID-19 first upended our economy, country, and way of life. Sadly, the headlines and tolls are all too familiar at this point: over half a million Americans lost; another three million people globally; a worldwide economic crisis of a scale unseen since the Great Depression.
In the U.S. franchise sector alone, roughly 20,000 locally owned small businesses shuttered forever. As a result 900,000 people are out of work.
However, if the past year has demonstrated anything, it’s the resiliency of the human spirit. As franchise businesses and brands navigated once-in-a-lifetime crises, they continued to showcase the best of Main Street.
First responders and medical professionals on the frontlines were fed, and hosted them in hotels to keep their families safe. They bootstrapped their businesses into personal protective equipment production centers. They shared best practices for preventing the transmission of the virus.
Thanks to the incredible and indelible efforts of so many small businesses across America, we enter summer 2021 with renewed hope and a belief that we can defeat this virus.
Help on the way
And that’s also because we’re not alone. In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act. Consisting of $2.2 trillion in emergency relief, the CARES Act was followed by the Consolidated Appropriations Act in December 2020 ($900 billion) and President Biden’s American Rescue Plan in March 2021 ($1.9 trillion). We cannot understate the scale of this mobilization of capital and resources.
Our fight against this virus has exceeded the entire cost of the American war effort in the World War II (over $5 trillion to roughly $4.5 trillion in today’s dollars, respectively). From the Paycheck Protection Program to the Restaurant Revitalization Fund, members of Congress from both sides of the aisle stepped up to the challenge. They ensured small businesses could keep their lights on, keep employees on payroll, and keep their communities safe.
Economic research conducted by the International Franchise Association (IFA) found that those efforts saved more than 20,000 franchise small businesses from closing, impacting more than 2.5 million jobs nationwide.
But now comes the hard part: picking up the pieces. Again though, franchise small businesses are not alone in this endeavor. President Biden often uses the phrase “build back better,” a centerpiece of his administration and the American Rescue Plan.
By creating high-quality jobs and opportunities, protecting the environment, and addressing inequalities and inequities in society, perhaps our new “normal” can be made better for everyone. Franchising can and should play a fundamental role in these efforts as an engine of opportunity, empowerment, and wealth creation.
What is a franchise?
The franchise business model allows any individual — regardless of their experience or education — to own their own local business without assuming the significant risks and higher costs of starting a new brand from the ground up.
That accessibility is beneficial for people of color, women, and other groups that have been historically disadvantaged and faced systemic roadblocks to accessing capital, fair and sustainable financing, property ownership, insurance, and even networking. In fact, according to data from the U.S. Census Bureau, 30.8 percent of franchises are owned by minority business owners, compared to 18.8 percent of non-franchise businesses.
And franchise businesses and brands are doing their part to make our sector and Main Streets more inclusive. IFA programs and initiatives like the Black Franchise Leadership Council and the Franchising Pride Council demonstrate our continued commitment to truly building back better. To learn more about how locally owned franchises are contributing to your community, visit www.franchiseeconomy.org.
That’s not to say we don’t face challenges ahead. The virus is still circulating in certain areas, and new variants pose significant challenges and risks worldwide. And according to that earlier-cited economic research, bad policymaking could ground our recovery to a halt.
However, if the last year proved anything, it is that when confronted with a challenge, small businesses rise to meet the occasion. Facing overwhelming odds, Winston Churchill famously said, “If you’re going through hell, keep going.” We have done just that. Now, we get to work building back. It’s up to all of us to ensure we do so for the better.