The International Franchise Association (IFA) is asking congressional leadership for the creation of a $300 billion fund to provide liquidity to franchises struggling through the coronavirus pandemic.
Up to 393,000 franchise jobs could be lost from a 90-day shutdown, the IFA warned. The U.S. franchising community is comprised of more than 733,000 establishments that employ over 7 million individuals and contribute $674.4 billion to the U.S. economy.
The IFA also found that approximately 20,000 to 30,000 franchise businesses will lose liquidity in the next 45 days if immediate relief is not provided.
It is calling for the creation of a Treasury Department-administered Small Business Workforce Stabilization Fund and Small Business Stabilization Account to provide immediate support to employers that keep employees on payroll and streamlined access to capital so businesses can grow when the epidemic passes.
“IFA members include franchise companies in over 300 different business format categories, from hotels to restaurants, hair salons to in-home health care, child education and home services,” IFA Senior Vice President of Government Relations Matt Haller wrote in a letter.
Haller added, “These small business franchise owners and their workforce are acutely experiencing the devastating economic impact of the crisis as a result of movement restrictions and social distancing guidelines as Americans do their part to prevent the spread of the coronavirus.”
The association also requested that franchisors and franchisees with more than 500 employees be eligible for government-backed loans, grants and other programs.
IFA responded to a multibillion-dollar emergency aid package President Trump signed into law Wednesday night, saying its paid leave mandate and refundable tax credit “exacerbates” the problem for small businesses who already have a significant and immediate cash flow crisis.
“We hope that Congress will address this small business crisis immediately and without partisan bickering. Major actions are needed to ensure businesses can keep employees and continue employer provided benefits, especially health care benefits as people’s livelihoods are at stake,” Haller said in a statement on Thursday.
Multiple other industries are seeking relief because of quarantines and closures due to the coronavirus.
The National Association of Manufacturers asked for the creation of a $1.4 trillion fund for loans to provide liquidity to manufacturers and small businesses struggling through the coronavirus pandemic.
The National Retail Federation asked for a direct, government-based loan program, and the National Restaurant Association called for financial relief, loans and tax measures to help it combat the crisis.
The airline industry this week, through Airlines for America, requested $50 billion in the form of grants, loans and tax relief to weather the coronavirus downturn. And the tourism industry, through the U.S. Travel Association and the American Hotel and Lodging Association, has called for $150 billion in overall relief.