Franchises Push for Growth Amid Debt-Deal Uncertainty
Despite the uncertainty in Washington surrounding tax hikes and spending cuts, some small companies including franchises are benefiting—at least in the short-term—from all the uncertainty and related paperwork.
BookKeeping Express, which helps small businesses with book keeping, data and analytics, is one such growing franchise. "Fiscal cliff" talks "actually is a great thing" for business, said Greg Jones, chief executive of Bookkeeping Express. "We've actually seen an uptick." He made the comments on CNBC's "Squawk Box" on Monday.
Primrose Schools, a private education franchise, is also growing. Primrose Schools has roughly 250 locations across 17 states. Franchise owners are reinvesting in staff, hiring and planning on additional locations.
But amid the debt talks, franchisees overall are uneasy about 2013, Primrose Schools COO Darin Harris said.
"What we're really seeing is an apprehension of them to go in and invest in additional locations. They're doing it, we're growing at record numbers," Harris said. "But at the same time we're hearing across our system, apprehension and fear of what is going to impact their business," he said. (Read more: Small-Business Owner to Politicians: Protect US Jobs)
Meanwhile, the word on the street from consumers and parents is they're switching to part-time care, he said. "That creates a different scenario for our franchise owners and how they invest in their people, how they hire and the hours that they can provide," Harris said.
Operating in 'Flux'
If Congress and the Obama administration can't strike a deal, hundreds of billions of dollars in tax increases and spending cuts would begin to kick in Tuesday. For example, a payroll-tax hike would have an immediate impact on paychecks. As another example, many entrepreneurs file taxes as individuals and would be hit if the tax rate on incomes exceeding $250,000 was raised.
Many small-business owners have been holding off on key hiring decisions and big-ticket investments. The broader mood among entrepreneurs is decidedly uncertain. "The small-business community is in flux," BookKeeping Express CEO Jones said. "They don't know what to do."
Optimism among small companies in November, the latest data month available, tumbled, according to the National Federation of Independent Business. Their small business optimism index reading of 87.5 last month is the 10th lowest in the survey's 37-year history. (Read more: Small Business Optimism Tanks, Owners Lose 'Hope')