Ifa-chamber Survey Findings

8/13/2019 Ifa-chamber Survey Findings

1/23

1INTERNATIONALFRANCHISEASSOCIATION/U.S.CHAMBER OFCOMMERCE

BillMcInturff,Partner

MicahRoberts,

Vice

President

Presentationof

Findings

from

NationalResearchConducted

AmongBusiness

Decision

Makers

September October2013


2/23


Executive

SummaryOnbehalfoftheInternationalFranchiseAssociation(IFA)andtheU.S.

ChamberofCommerce,PublicOpinionStrategiesconductedsurveysof

208decision

makers

in

franchise

owned

businesses

and

206

decision

makersinnonfranchisebusinesseswith40to500employeesaboutthe

impactoftheAffordableCareAct(ACA)ontheirbusinesses.

Together,franchise

owned

and

non

franchise

businesses

with

40

to

500

employeesaccountforover42millionjobs,whichisover25%ofall

employedAmericans.

Overall,thedecisionmakersreportthattheACAhasalreadyresultedin

highercosts andfewerfulltimepositions.Whenfullyimplementedin

2015,thesurveyresultssuggesttheACAemployermandatewillresult

infeweremployersprovidinghealthcare.


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Executive

Summary

(cont.) Sixtyfourpercent(64%)ofbusinessdecisionmakersinfranchisee

ownedbusinessesand53%innonfranchiseeownedbusinessesbelieve

theACAwillhaveanegativeimpactontheirbusinesses.

Manybusinessesarealreadyseeingtheirhealthcarecostsincreasing

becauseofthelaw. Tocope,31%offranchiseand12%ofnonfranchise

businesseshave

already

reduced

worker

hours,a

full

year

before

the

employermandategoesintoeffect.

Additionally,27%offranchise and12%ofnonfranchisebusinesses

have

already

replaced

full

time

workers with

part

time

employees.

Othercostcontrolmethodscitedbysurveyparticipantsincludedhiring

onlytemporaryhelpandcuttingbenefitsandbonuses.


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Executive

Summary

(cont.) Amongbusinesseswith40to70employees, 59%offranchiseand52%

ofnonfranchisebusinesses plantomakepersonnelchangestostay

belowthe

50

full

time

equivalent

employee

threshold.

This

accounts

for

23%ofallfranchiseand10%ofallnonfranchisedecisionmakers

surveyed.

Largechunks

of

decision

makers

say

the

employer

mandate

will

mean

theywilldrophealthcoverage,optinginsteadtopayapenaltyforeach

employee.Ineffect,amongthissegmentofbusinesses,theemployer

mandatewillmorethandoublethepercentageoffranchiseowned

businessesand

more

than

triple

the

percentage

of

non

franchise

businessesthatwillnotofferhealthcoverage.


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In

an

Open

ended

QuestionSummaryofResponsesAmongthe64%ofFranchiseBusinessand53%ofNonFranchise

BusinessDecisionmakersWhoSaidtheLawisHavingaNegativeImpactonTheirBusinesses

Decisionmakersfrombothaudiences,franchiseandnonfranchise,toldustheyaremost

concernedwiththecostsofhealthcoverageandcompliance.Theyfeelthelawwillproveto

beadisincentivefortheircompaniestogrowandwilldoquitetheoppositeforcethemto

cutstaffandhours,getmoreoutoffewerfulltimeworkers,andcauseunduestrainontheir

operations.

Especiallyamongdecisionmakersfromfranchiseeownedbusinesses,thereisaconcernfor

thehourlyworkerswhowillbehurtmostbythedownwardpressurethelawputsonnon

salaryworkers.AsoneQuickServeRestaurantownerinKansassaid:

Theworkforce,thebackboneofthepeoplehere,arethehourlypeople.Theyrelyonaforty

hourweek.Youtaketenhoursaway,thatsgoingtokillpeople.ButIguaranteeyouthat

morecompaniesandcorporationswilldojustthatbecausethatstheloopholethatisin

there.Itsnotawinwin.Havingeveryoneinsuredisagreatidea,butthisisthewrongway

of

going

about

doing

it.


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ManyBusinessesAreAlreadySeeingTheirHealthCare

CostsIncreasing

Because

of

the

Law.

Have your costs for providing health care benefits to your employees increased or decreased in the past year or so, or have they

not changed? Have your costs for providing health care benefits to your employees increased because of the new health care law,

for some other reason, or both?

Franchise(68%) NonFranchise(91%)

Costs

increasing

because ofthelaw

AmongThoseCompaniesWhoCurrentlyOfferHealthCareBenefits


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EvenwiththeEmployerMandateaYearAway,BusinessesAre

Reducing

Hours

and

Replacing

Full

time

Workers

with

Part

time

Workers.

%Yes,BecauseofHealthCareLaw

31%

15%

27%

12% 12% 12%

Reducedworker

hours Reduced

number

of

staff Replaced

full

time

employeeswithparttime

workersFranchise NonFranchise

Have you reduced the number of hours your

employees work in the past year or so?

Have you reduced the number of people you

employ in the past year or so?

Have you replaced fulltime workers with

parttime workers in the past year or so?


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AMajority ofDecisionmakerswith4070EmployeesSay

TheyWill

Make

Personnel

Decisions

to

Stay

Below

the

50

FulltimeEquivalentEmployeeThreshold.

59%52%

35%

48%

Franchiseownedbusinesses

with40

70

employees

(23%)

NonFranchiseownedbusinesses

with40

70

employees

(10%)TotalLikely TotalNotLikely

Looking forward to 2015 when the employer mandate penalty will be enforced, how likely do you think it is that your company will make

personnel decisions to keep your workforce below the threshold of fifty (50) fulltime equivalent employees and avoid the requirements and

penalties associated with the new health care law?

AmongBusinessesWith4070Employees


10/23


Decisionmakersinbusinessesemploying4070people

have

a

very

specific

set

of

actions planned

for

2015,

when

theemployermandategoesintoeffect:

Cutfulltimestaffandcuthoursofparttime

workers

Hireonlytemporaryhelporparttimeemployees

andstrictlymonitorhours

Stopmakingeffortstogrowandexpandbusiness

Cutbenefitsandbonuses

In

An

Open

ended

Question


11/23


AmongBusinessesOfferingHealthCoverage,LargeChunksofDecisionmakers

saythe

Employer

Mandate

Will

Mean

They

Will

Drop

Heath

Coverage.

Looking forward to 2015 when the employer mandate penalty will be enforced, how likely do you think it is that your company would stop

offering health insurance benefits to your employees and instead potentially pay a penalty of $2,000 a year per employee for employees

covered by a health plan available through an exchange.

32%

28% 60%

9%

28% 37%

AmongFranchiseBusinesses AmongNonFranchiseBusinesses

Currentlynotprovidingcoverage

Willdrop

coveragein

2015

TotalNot

Providing

Coveragein

2015

Currentlynot

providingcoverage

Willdrop

coveragein

2015

TotalNot

Providing

Coveragein

2015


12/23


PUBLICOPINIONSTRATEGIES

214

N.

Fayette

St.Alexandria,VA22314

BillMcInturff,Partner

[email protected]

MicahRoberts,VicePresident

[email protected]


13/23



14/23


MethodologyOnbehalfoftheInternationalFranchiseAssociationandtheUS

ChamberofCommerce,fromSeptember25throughOctober18,

PublicOpinionStrategiesconductedconcurrentsurveysoftwouniqueaudiences:

208decision

makers

in

multi

unit

and

single

unit

franchisee

ownedbusinesseswith40500employees.

206decisionmakersinnonfranchisebusinessesthatemployin

therange

of

40

500

employees.

Respondentswerereachedbyeitherphoneoremail.


15/23


ThisSurvey/

Franchise

ThisSurvey/

NonFranchise

Government

andOtherData

Percent

of

Respondents Compared

to

FemaleOwned Businesses1 3 3 5 2 9PercentofRespondentsComparedto

MinorityOwnedBusinesses2 1 4 1 1 1 5Northeast

3 2 2 3 2 2Midwest3 2 4 2 1 2 3South3 3 4 3 2 3 2West3 2 2 2 4 2 4

ComparingThisSurveytoGovernmentData

1 NationalWomen'sBusinessCouncil,http://www.nwbc.gov/facts2 USCensusBureau,http://www2.census.gov/econ/sbo/07/pums/2007_sbo_pums_users_guide.pdf3 USCensusBureau,http://www2.census.gov/econ/susb/data/2006/us_state_totals_2006.xls

ByGender,

Ethnicity,

and

Region


16/23


ThisSurvey/

Franchise FDD

FoodRelated2 5 2 5 5AutomotiveProductsandServices 1 1 4Lodging 6 4Services General 6 3Business

Services 4 8

ComparingThisSurveytoFranchiseDisclosure

Document(FDD)

Records

for

Multi

Unit

Owners

1 DatareflectsthepopulationofmultiunitownersbyindustryaccordingtoFRANdata countsbasedonFranchiseDisclosureDocument

records.2 FoodRelatedincludesBakedGoodsEstablishments,FrozenDessertsEstablishments,QuickServeRestaurants,TableFullService/SitDown

Restaurants,andRetailFoodStores.

1

ByIndustry


17/23


18/23


ThisSurvey/

NonFranchise

D&BNon

Franchise(40500 emps.)

40to50 1 1 451to75 1 2 1 376to100 1 2 1 4101to150 2 1 1 4151to500 4 5 4 5

ComparingThisSurveytoDunandBradstreet

(D&B)Small

Business

Records

1 Datareflectsthepopulationofbusinesseswith40500employeesbyindustryaccordingtoSurveySamplingInternationalcountsbasedon

DunandBradstreetrecords.

1

ByCompanyEmployeeSizeRange


19/23


ComparingthisSurveytoOtherNationalData

ByPartyIdentification

ThisSurvey/

Franchise

ThisSurvey/

NonFranchise National

Data1

Republican 5 2 4 7 4 8Independent 1 6 2 1 6Democrat 3 3 3 3 5

1 Datashownreflectresultsamong633selfdescribedsmallbusinessownerscollectedaspartofnationallyrepresentativesurveys ofregisteredvoters

conductedbyPublicOpinionStrategiesfrom20112012. Atotalof5,600interviewswereconductedamongregisteredvotersusing bothlandlinesandcell

phonesusingrandomdigitdialing.Thetotalnumberofselfdescribedsmallbusinessownerswas633,or11%oftheinterviewsconducted.


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EconomicImpactoftheAudiences

WeSurveyed

Multiunit andsingleunitfranchiseeownedbusinessesthat

employ

40

500

people

account

for

more

than

half

of

all

U.S.

franchiseestablishmentsandemployment. Thesebusinesses

provide4.1millionjobsinover379,000establishments.

Nonfranchisebusinessesthatemploy40500peoplerepresent

abouttwopercent(2%)ofallU.S.businessesbutaccountfor

300,000companiesandover38millionjobs.

Together,thesebusinessesaccountforover42millionjobs,which

isover

25%

of

all

employed

Americans.

1

2

3

1. Source:InternationalFranchiseAssociation

2. Source: SurveySamplingInternationalDunandBradstreetSample.

3. Source:BureauofLaborStatistics


21/23


DecisionmakersinTheseBusinessesExpect

TheEconomy

to

Remain

Flat

Over

the

Next

Year

With

OnlyOneinFiveExpectingEconomicExpansion.

In 2014, do you anticipate

18% 22%

52%

66%

26%

12%

Franchise NonFranchise

Economicexpansion Aflateconomy Arecession


22/23


FewerThanOneinFiveDecisionmakersExpectsMoreThanSingle

DigitGrowthinTheirCompanyRevenues.

As you look to 2014, do you project your companys gross revenues to increase or decrease compared to 2013, or will they probably stay

the same?

16%30%

39%

13%

16%

43%

25%

16%

IncreaseMoreThan10% IncreaseLessThan10% StaytheSame Decrease

Franchise

NonFranchise


23/23

Ifa-chamber Survey Findings

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