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Franchisee Action Required – H.R. 6201, Families First Coronavirus Response Act

Posted on Date: Mar 15, 2020

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As you probably know, and has been widely reported, the U.S. House of Representatives passed H.R. 6201, the Families First Coronavirus Act overnight this past Friday.  It will be debated and likely passed in the Senate on Monday, and the President has already expressed his support.  Of course, the question on all of our minds is how does it impact us as franchisees?  First, a lot will come out in the coming days, with many organizations providing their analysis of the legislation.  It's 124 pages long, so it's not an easy task.  As detailed analysis becomes available, I will get that to you. A link to the legislation can be found here.

The primary focus of the legislation is to keep workers having income during this crisis, whether through illness or cutbacks due to loss of business.  The bill talks about using the Social Security Act to fund emergency leave, and it would include self-employed.  That provision would cover 2/3 of the individuals average monthly earnings, up to $4000.  I'm guessing to qualify, all your outlets would need to be closed, and that is unlikely over an extended period of time.  Most likely, we will just see a massive loss of revenue.  And reality, $4000 per month would only cover one month’s rent for many outlets.

Then we get to sick pay.  It starts with 1 hour earned for every 30 hours worked, up to 56 hours of sick leave per year, and the employee is eligible after 60 days of employment.  However, if a "public emergency" is declared, the employee can receive up to 14 days of paid sick leave.  Employers with 50 or less employees will be reimbursed by the U.S. Treasury in a "timely" manner.

The issue is this, "timely" reimbursements or tax credits won't help if you don't have the funds to pay any of this paid leave.  We are looking at possible massive losses in revenue immediately.  If that happens, most franchisees will have difficult time paying next month’s rent, their next product/supply delivery, or fund payroll.  The government and SBA need to look at loan deferments and bridge loans to potentially help franchisees survive.  While most employees live paycheck to paycheck, many franchisees live much the same off their outlet’s revenue.  It's not a matter of arguing if employees should get that sick pay, it's how can it get paid?  We are all in this together, and AAFD members are supportive of a plan that helps everyone through this crisis, knowing that if one segment fails, the whole plan fails.

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Franchisees need to act now and have their voice heard.  Contact your U.S. Senate offices immediately.  Because staff will likely be working at home, it will be best to contact them via email.  Go here to find your Senators, then go to their web page, and go to the contact section. Send a message that states something like this:

Dear Senator,

I am a (insert your brand)  franchisee in (insert your state) with (insert your number of outlets) outlets, with (insert the number of employees you have) employees.  I appreciate the emergency actions Congress is taking with the Coronavirus outbreak, however, must express my concern that small business franchised owners like myself are being left behind.  We are already seeing large declines in business that are impacting our ability to service our business debts, pay rent, pay for product deliveries, and of course pay our employees their wages.  H.R. 6201 creates paid sick requirements that I will likely not be able to meet.  Like you, we want to protect our valuable employees, however, tax credits or "timely" reimbursements may not be quick enough to have funds available to meet those demands.  Franchise owners across the country are scared, scared that they may lose everything from the impact of this crisis. We franchise owners have all invested, employed, supported, and paid taxes in our local communities.  All that is at risk.  I ask you to make sure there is assistance for us to weather this crisis.

Sincerely,
(insert your name)

This is just a sample you can write.  Feel free to write your own letter. Time is of the essence.  Act today.

And just in, two news stories that show why we need to act immediately.  Let Congress know your story.

https://www.morningstar.com/news/dow-jones/20200315549/us-treasury-to-help-advance-funds-to-employers-for-paid-sick-leave

https://www.marketwatch.com/story/mnuchin-suggests-coronavirus-relief-measure-may-be-in-trouble-in-senate-2020-03-15?mod=hp_minor_pos19

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