"Because of limited local decision-making authority, franchisees typically do not meet AMIBA’s suggested definition of a local independent business."

Read more about the Local Multiplier Effect.

Just in case you were wondering. It comes up from time to time, and the point to me remains: "They (franchises) buy into someone else’s business model."

AMIBA readily concedes the "gray" in franchising, but not the fundamental difference between your own conceptual creation and using someone else's. That's always been the crux of it for me, and it always will be. If that makes me cantankerous, so be it.

Should Franchises or Buying Coops Be Part of “Buy Local” Initiatives?

And are franchises’ advantages worth the trade-offs for business owners?

Editor’s note: we originally wrote this memo for AMIBA affiliates as a member resource. We decided to make the page publicly accessible to help prevent others from making costly errors after we saw many “buy local” campaigns derailed by mishandling franchises or cooperatives.

Franchising is a business model used by corporations (franchisors) wishing to expand their reach and increase revenues without taking direct responsibility for financing and managing each new location. The franchisor grants licenses and enters into contracts with individuals or companies wishing to open a branch (franchisees). These licenses typically are for a limited number of years and grant a specific territory to franchisees. It’s akin to leasing a business.

While some franchises are operated by area residents, others are owned by management corporations that may own many franchises (this is especially common in fast food, where a single company may run outlets of multiple brands).

Individual store owners may own or lease their store building or space, but they buy into someone else’s business model. Support from the franchisor may include a known brand, business plan, trademarks, training, site selection assistance and other tools that theoretically help make success more likely. The franchisee pays a royalty fee and also may pay a portion of sales or profits as part of the franchise agreement, which usually has a finite term attached to it that may be renegotiated at its end. For most franchises, especially restaurants, contracts typically require buying some or all inputs from the parent corporation or its chosen distributor.

The franchisor typically has the right to revoke the franchise from a franchisee if their stipulations are not followed. Because of limited local decision-making authority, franchisees typically do not meet AMIBA’s suggested definition of a local independent business. However, since we are not a franchisor, member organizations ultimately make the decision of how to handle franchises.

If you opt to allow any franchises to be listed in any of your organization or campaign materials, we recommend strongly it be in a “locally-owned franchises” category, distinct from independent businesses. Make sure your board and staff know your policy to ensure consistency and share this page with them so they can speak knowledgeably on the topic ...

AMIBA on immigration: "In fact, working people benefit from the jobs and economic opportunities provided by immigrants."

The article is from 2017, and was published at American Independent Business Alliance (AMIBA). I think it underscores the possibility of our independent local business community taking a principled stance on immigration.

Scapegoating of Immigrants Is Dangerous, Inaccurate, by Drew Callaghan

 ... In addition to contributing positively to our national economy, immigrants play a crucial role in stabilizing and revitalizing struggling communities. For decades, rural areas and post-industrial cities have grappled with debilitating out-migration. Many of the communities effectively weathering these upheavals have an influx of immigrants to thank.

Immigrants are pumping new life into communities like Akron, Ohio and Storm Lake, Iowa which, unlike nearby towns, recovered from successive economic shocks by embracing immigrants who fill essential jobs, buy homes, and do the thing elemental to a thriving economy: start businesses and create jobs.

Job creation depends largely on new business formation, and immigrant-founded businesses create new jobs that generate $20 billion annually in local and federal taxes. Embracing and welcoming these individuals isn’t just the humane thing to do. It’s also smart economic development strategy.

Trump and other immigration hawks have proposed a new merit-based system that would invite only the “best and brightest” to America. Humanitarian concerns aside, reducing the number of immigrants with low skills and education may seem like smart economic policy. Again, the data disagree. Immigrants with fewer skills and less education actually create new businesses at a higher rate. Counterintuitive, sure, but some observers suggest the characteristics this population embodies – namely risk-tolerance, perseverance and problem-solving skills – ideally suit them for entrepreneurship.

Even immigrants who don’t start businesses have, at worst, a neutral effect on earnings. An analysis by the libertarian Cato Institute found immigration had no significant impact on the wages of American workers. And, although poor immigrants may tap into social services initially, Cato found they use public benefits at a lower rate than poor native-born citizens over the long term.

Furthermore, the idea that immigrants – particularly refugees – lead to more crime is a myth ...