Franchise group to mayors: We'll show you some stimulus

A case for using restaurants and other franchises as a grassroots stimulus package was presented to the nation’s mayors last week at their annual convention in Baltimore.

The International Franchise Association argued that hiring and economic activity would jump in towns and cities across the country if local entrepreneurs could get the capital to open as many franchised businesses as they’d like. But a variety of factors will leave them about 20% short of their borrowing goals, the trade group concluded in a study released earlier in the year.

The IFA decided to bring that situation to the attention of the country’s mayors, many of whom are facing severe shortfalls in tax revenues as a result of sputtering economies. It secured time on the program at the U.S. Conference of Mayors, which commenced its convention on Friday.

The presentation was the first public airing of the IFA’s just compiled “lending toolkit,” a lesson-in-a-box on the need for more capital for franchises. The information kit is intended to demonstrate the economic returns of loaning money to franchises.

For instance, the IFA reports that every $1 million loaned to franchisees generates more than 40 jobs and $4.2 million in economic activity.

That insight was well received by the mayors, according to IFA spokesman Matthew Haller. “Being able to give them that hard data was a real eye-opener for them,” he says. “It’s not like we’re applying for stimulus money. We’re just asking regulators and lenders to rediscover the economic potential of this engine for growth.”

The IFA plans to present its information toolkit at seven upcoming gatherings for franchisees and lenders.

Simultaneously, says Haller, the group is working on such additions as a “lending resource hub,” an online matchmaking service for lenders and franchisees.

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