With the 119th Congress underway and the Trump administration getting ready to take workplace, the International Franchise Association (IFA) has outlined its 2025 Roadmap for Small Business Growth. The suggestions, designed to bolster franchise companies and drive small enterprise development, deal with 5 key areas that might form the way forward for franchising. This is what franchise house owners ought to look ahead to.
Joint employer requirements
Certainly one of IFA’s high priorities is codifying a joint employer customary. The purpose is to make sure franchisees keep autonomy whereas nonetheless benefiting from franchisor assist and model consistency and would deliver much-needed readability to a long-debated situation. A transparent joint employer customary would shield workers of franchisees from being unfairly categorized as workers of the franchisor whereas permitting franchisors to implement model requirements with out taking over further legal responsibility.
The IFA waged a legal battle with the Federal Trade Commission in 2023 and 2024 towards the proposed expanded rule. The IFA-led coalition in the end defeated the industry-changing rule in federal courtroom final July.
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Tax insurance policies that promote development
The group is advocating for a number of key modifications to tax coverage to create a extra favorable surroundings for franchise development. Certainly one of its major targets is to make the Section 199A deduction everlasting, because it provides vital tax relief to small companies by lowering taxable earnings, thereby encouraging reinvestment and growth.
Moreover, the IFA seeks enhancements to the Work Opportunity Tax Credit (WOTC), which incentivizes hiring people from teams going through employment boundaries and helps franchise house owners construct a extra various workforce.
One other precedence for the IFA is the repeal of the property tax, sometimes called the “dying tax.” Its elimination would ease the monetary burden on franchise house owners seeking to go their companies right down to the subsequent technology. Lastly, the IFA is looking for an extension of the veteran tax credit, which rewards employers who rent veterans — a step that not solely helps veteran employment but additionally strengthens franchise groups.
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Higher transparency
One of many IFA marketing campaign’s focuses is modernizing the FTC’s Franchise Rule, which requires franchisors to reveal key particulars to potential franchisees and strengthens pre-sale disclosure necessities. For the IFA, enhancing transparency is about extra than simply compliance — it is about creating an surroundings the place franchisees could make well-informed choices with a transparent understanding of the dangers and rewards. This, in flip, helps stop misunderstandings and disputes, resulting in stronger, extra sustainable franchise relationships.
By advocating for clearer disclosure, the IFA goals to scale back friction within the franchising course of and foster long-term success for all events concerned.
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Combating regulatory burdens
Extreme laws and charges can place vital monetary and operational pressure on franchise house owners, making it tougher to compete and thrive. To handle these challenges, the IFA is advocating for streamlined laws and fairer charge buildings, guaranteeing small enterprise house owners can deal with development and sustainability. Its roadmap contains the next initiatives, every tailor-made to assist franchisees:
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Enhance entry to SBA loans: SBA loans are a lifeline for a lot of franchisees, providing reasonably priced financing choices to start out or develop their companies.
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Cut back credit card transaction fees: Many franchise companies rely closely on card funds, and excessive transaction charges can erode already skinny revenue margins.
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Help a balanced nationwide privateness legislation: Presently, a patchwork of state privateness legal guidelines creates compliance challenges and will increase prices for franchisees working in a number of states.
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Problem the Company Transparency Act (CTA): The CTA imposes new reporting necessities on small companies, including administrative burdens.
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Blocking dangerous state-level insurance policies
State-level insurance policies typically add complexity for multi-unit franchise operators. Constant federal requirements might assist mitigate operational headaches and assist growth. The IFA warned towards state-level initiatives that might undermine the franchise mannequin.
Though it helps imposing current labor legal guidelines, it opposes the creation of recent regulatory councils that might overburden small companies.
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Wanting ahead
As franchising continues to evolve, the IFA’s 2025 roadmap highlights the group’s dedication to fostering development, sustainability and resilience in an more and more complicated enterprise surroundings. The proposed initiatives purpose to handle a few of the most urgent challenges going through franchise house owners as we speak, from regulatory burdens to financial pressures, whereas additionally laying the groundwork for long-term innovation and success.
Nonetheless, the success of those initiatives hinges on legislative motion on the federal and state ranges and sustained advocacy from the franchise group. Franchise house owners and stakeholders play a crucial function in amplifying the IFA’s voice, participating with policymakers and demonstrating the tangible advantages of a vibrant, truthful and aggressive franchise sector.
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