AKFCF GAC 2011 Fall Regional Meetings Federal Legislative Update

1. AKFCF GAC 2011 Fall Regional Meetings Federal Legislative Update Prepared by: Dan Gans, Polaris Consulting, LLC

2. AKFCF 2011 Washington Fly-IN • October 4 – 6, 2011 • the 6th Annual AKFCF Congressional • Reception – over 1000 congressional staff • and members of Congress attended Congressman Michael Grimm (R-NY) with Brandon Robertson and Larry Starkey

3. AKFCF 2011 Washington Fly-IN • continued… • Members of the GAC met • with over 30 Member Offices • to discuss the legislative • Priorities of the AKFCF

4. Membership of the GAC Southwest – Brandon Robertson, GAC Chairman Great Lakes – Lesley Hottinger, PAC Chairman Southeast – Wiley Dean Southeast – Chris Fowler, At-Large Northeast – Bob Carlucci Northwest – Brett Sibert Northwest – Brett Harris, At-Large Upper Midwest – Gene Duenow Southern California – Jeff Baker Upper Midwest – Peg Duenow, Treasurer Executive Committee Designees – Larue Kohl Larry Starkey

5. AKFCF Legislative Priorities • Ethanol Subsidies • Tax Priorities / Super Committee • NLRB / Card Check • Immigration

6. Ethanol • AKFCF opposes subsidizing the end use of commodities for one purpose to the detriment of another • The cost of commodities is approaching an all time high. Franchisees are particularly vulnerable to corn and chicken prices • The price of chicken was at $0.82 per pound in October 2009 and now is at $1.05 per pound, a 25% increase • Some franchisees are seeing their costs rise dramatically – up to 10%

7. Super Committee • The Super Committee, created by the Budget Control • Act of 2011, consists of 12 Members of Congress, 6 • Senators and 6 Representatives, divided bipartisanly • They are charged with issuing a recommendation by • November 23, 2011 for at least $1.5 Trillion in deficit • reduction over the next ten years • The committee's recommendations would then be put to • a simple up or down vote by Congress by December 23, • 2011 • Speaker Boehner (R-OH) has stated that tax reform • should be on the table

8. Super Committee Continued… • We expect the Super Committee to repeal the ethanol • subsidies which will create $1.33 Billion in savings • President Obama and Congressional Democrat • Leaders are demanding tax increases as part of the • Super Committee process • Republican Congressional Leaders are demanding entitlement reform • The differing priorities of Republicans and Democrats have created a difficult environment to reach a compromise • If the Committee cannot reach a deal, then cut will be enacted using a process called Sequestration

9. Super committee / Tax Reform • AKFCF believes raising taxes in a recession is bad • fiscal policy and punitive on small businesses • We oppose any attempt to raise individual tax rates. • Corporate Tax Rates – Many in Congress are talking about cutting corporate tax rates in the context of tax reform. • AKFCF supports reducing corporate tax rates, but only if a comparable tax reduction is provided to small business owners who file as an LLC or S Corp.

10. Tax Depreciation • Set to expire 12/31/2011 • H.R. 1265 , introduced by Jim Gerlach (R-PA-6) and • Richard Neal (D-MA-2) • S. 687, introduced by Senator Kent Conrad (D-ND) and • Senator John Cornyn (R-TX) • for every $1 spent in the construction industry, an • additional $2.39 has been generated for spending in • the rest of the economy. • Moreover, for every $1 million spent in the • construction industry, 28 U.S. jobs have been created • in the broader economy.

11. Death Tax • The AKFCF supports the abolishment of the death tax, • however half or three quarters of a loaf is better • then none. • For the 2010 and 2011 tax years franchisees will • receive a $5 Million exemption and 35% tax rate beyond • the first $5 million. • the current provisions expire in 2012. If Congress • does n’t act, then the provisions will revert back to • the original 55% . • The AKFCF GAC would like to see Congress provide • longer term certainty on this and other tax issues.

12. Work Opportunity Tax Credit (WOTC) • Current provision expires 12/31/2011. • It was enacted as a key component of the 1996 • welfare reform law. • WOTC provides a 40% credit on the first $6,000 of • qualified wagers paid to certified employees. WOTC • helps to offset the higher costs of recruiting, hiring, • and retaining those who are eligible. • WOTC is a key bridge from Welfare Dependence to • Work. • It has helped over 6,000,000 individuals (940,000 in FY 2010)

13. NLRB / Card Check • EFCA is dead on arrival in the current House of Representatives, the concern now is that the Obama Administration is looking for ways to implement Card Check on a regulatory basis through the NLRB. • The NLRB recently proposed a plan to dramatically speed up the timeline for holding union elections (from 42 days to 10 days). • In August, the NLRB finalized rules requiring employers to post a notice informing employees of their right to organize • A number of groups led by NAM and the NRA have filed suit against this requirement • Last week, the NLRB delayed the notice requirement until January 31, 2012 • AKFCF opposes any legislation or regulation that tilts the balance of employer/employee relations.

14. E-Verify / Immigration • Immigration reform should accomplish the following goals: control and secure our borders; improve employment verification systems for determining whether an employee is authorized to work in the United States • AKFCF supports the establishment of a mechanism to provide temporary and possibly permanent legal status for undocumented workers currently in the United States seeking employment. • AKFCF desires a stable and legal workforce and recognize that current employment verification procedures need to be improved • AKFCF is fundamentally supportive of E-Verify, but is opposed to legislation that does not contain a safe-harbor clause for employers who follow the proposed expansion of E-Verify in good faith.

15. Your Support Makes a Difference! • Bills have been passed because of our PAC – help us keep the momentum going! • Get involved with the AKFCF GAC! • Support the AKFCF PAC!!!