Spotlighting Small Businesses: A Day with Franchisees

On Tuesday, June 20, 2023, Assistant Chief Counsel Janis Reyes spoke at the “Government’s Role in Protecting Small Businesses” session of the 2023 Coalition of Franchisee Associations (CFA) Day Forum. Reyes was invited to join an issue panel which discussed regulatory actions and programs concerning franchisees. Ms. Reyes was joined by Lois Greisman of the Federal Trade Commission’s Division of Marketing Practices (FTC) and Nick Rajpara, an Economic Development Specialist at the Small Business Administration (SBA).

The CFA Day Forum is an annual event at which franchisees meet with members of Congress and learn from industry experts on important legislative issues concerning franchising. This year’s forum furnished an excellent opportunity for the Office of Advocacy (Advocacy) to meet with franchisees, speak with them about pending legislative topics, and inform them of the work Advocacy conducts on behalf of American small business owners.

Ms. Greisman of the FTC started the discussion. She spoke about two FTC initiatives to protect franchisees­—the agency’s March 2023 Request for Information regarding provisions of franchise agreements and franchisor business practices and the FTC’s proposed rule on non-compete clauses. Both of these initiatives would impact many franchises, and Ms. Greisman fielded many questions on these topics. Advocacy wrote a comment letter on the FTC’s non-compete proposal. Ms. Greisman also noted that the FTC has taken more enforcement actions in recent years to protect small businesses, including franchisees.

Mr. Rajpara discussed ways that SBA can protect and help franchisees, such as capital access programs, contracting and procurement opportunities, and counseling and training opportunities.

Nick Rajpara presenting at the 2023 Coalition of Franchisee Associations (CFA) Day Forum
Nick Rajpara presenting at the at the 2023 Coalition of Franchisee Associations (CFA) Day Forum

Kicking off Advocacy’s portion of the panel, Reyes gave attendees a brief overview of Advocacy’s work providing feedback to federal agencies on proposed rules and those rules’ economic impact on small businesses. Advocacy’s statutory directive requires it to act independently in its review of executive branch actions. Ms. Reyes also gave attendees an overview of the comment letter process, along with instructions to franchisees on how to write a comment letter to federal agencies.

A theme of Advocacy’s comments: not all small businesses are alike. Given this reality, Assistant Chief Counsel Reyes underscored the importance of franchisees, and all small business owners, reaching out and communicating feedback to Advocacy so the office can best give voice to their concerns.

To round out her remarks, Ms. Reyes also touched upon upcoming regulations that are likely to impact franchisees. Ms. Reyes noted that the Department of Labor (DOL) has announced that it will release a proposed rule in August 2023 that will affect overtime payments to employees. Under the Fair Labor Standards Act, employees must be paid at least minimum wage and overtime for time worked over 40 hours a week. DOL plans on updating the exemptions in the Fair Labor Standards Act for executive, administrative, and professional employees. These changes could mean that more employees could be eligible for overtime pay. Reyes also discussed DOL’s independent contractor rule and the National Labor Relations Board’s proposed rule on joint employment. Advocacy has written comment letters on both rules.

The Office of Advocacy looks forward to continuing its work with the Coalition of Franchisee Associations and its members to find solutions to the regulatory challenges faced by franchisees.

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