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Trump Signs 'Wartime Level' COVID-19 Response


The U.S. Capitol Building in Washington, D.C.

So far, three legislative packages to help get America through the disastrous effects of the COVID-19 virus have focused on the coordination between hospitals and states around treatment and response efforts. 

There are endless updates and proposals, and for franchisees, it’s a confusing mess of big numbers and fine print. In this story, we summarize the legislative actions and how they affect the franchise industry. 

Bookmark this page; will be updated throughout the coming weeks and months as legislative action continues with the most recent legislative action first. 


CARES Act - March 27

The massive $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act is now the largest stimulus package in history. It was called a “wartime level of investment” by Senator Mitch McConnel and has been signed by President Donald Trump. The third measure to address the widespread effects of the COVID-19 virus includes language to expand prevention and treatment efforts and bypasses some FDA approval processes. It also suspends payments for federal student loans. This is the first bill with real help for business owners, along with direct cash payments to American consumers. It also affirms the IRS guidance to push tax deadlines back to October 15. 

The franchise industry should especially watch for the following provisions:

Cash Infusions for Americans

Every American with a tax ID will receive cash infusions. Anyone making up to $75,000 per year will receive $1,200 in payments. The payment will scale down from there, getting smaller payments to anyone making between $75,000 and $99,000—those making more will not receive payments. Families will also get $500 per child in the household. 

Fund for Businesses Large and Small

The final deal creates a $500 billion fund made up of $425 billion for Federal Reserve to dole out as loans and $75 billion for industry-specific loans like the airline and cargo transporting industries. 

After complaints from Democrats, the fund will now have greater oversight from an inspector general, a Congressional panel and as a rule, no funds will go to companies owned by President Donald Trump or any senior political leadership. The final bill also includes a provision that any companies accepting money must also agree to halt stock buybacks for the duration of relief and an additional year afterward. The widespread use of stock buybacks meant less cash on hand for companies to weather disruptions like the COVID-19 pandemic. 

Under the new business loan rules around express loans, business can borrow up to $1 million, up significantly from the prior $350,000 outlined in the SBA guidelines. That rule would last through January 1, 2021. It does maintain the rule in original bills that limits loan size to 2.5 times payroll. 
The SBA also has 30 days after the passage of this bill to fill in details of the disaster relief loan program. 

Forgivable Loans to Keep Employees on Payroll

One major concern is that by furloughing or laying off workers, they just won’t come back. It took a decade to return to post-crisis employment saturation after the Great Recession; this bill seeks to nip that in the bud by keeping people paid. 

The final bill includes $350 billion for small businesses, including franchised businesses, to keep people on payroll through the crisis in what’s called the paycheck protection program. Owners who keep workers can also qualify for cash-flow assistance in the form of federal loans. Such loans would be forgiven if the employer keeps people on the payroll. 

One minor caveat, the payroll costs are capped at $33,333 for the period under the bill; which runs March 1 though June 30—essentially reiterating the cap for help is for earners who make less than $100,000 annually. 

Unemployment Benefit Expansion

The bill extends unemployment insurance benefits by 13 weeks, including a four-month enhancement of $600. Unlike prior bills, the expansion allows unemployed workers to keep their entire salaries while unemployed. 

Robert Cresani, the IFA president and CEO, called on legislators to pass the bill as soon as possible to save the franchise industry from greater damage. 

“Without this significant and immediate action in the form of direct federal aid, zero interest loan guarantees and tax credits to keep employees on payrolls, we estimate that 30,000 franchise owners may permanently close their businesses in the next 45 days, causing approximately 330,000 job losses in franchise community alone," said Cresanti in a statement. "In the next four months, we estimate that more than four million franchise workers will be without work, whether through layoffs or business closures." 

While $2.2 trillion is an astounding number, one of the key leaders at the Fed through the Great Recession, Kashkari said their response proved too “timid.” 

“We were always slow, and we were timid. We were too small. And the reason is we didn't know how bad the crisis was going to get, and we didn't want to overreact. Well, that was wrong. We kept thinking, well, maybe we've done enough. And then we'd realize, oh, my gosh, we have not done enough,” said Kashkari in an interview on NPR’s Planet Money. “One of my takeaways is when the downside scenario is that devastating, you should overreact. The right policy response is to overreact to try to avoid that terrible downside scenario.”

Cresanti echoed that sentiment. 

“While the cost of this legislation is high, the cost of inaction will be higher. It is likely that additional legislation will be needed in the coming weeks to support America’s 733,000 franchise businesses and their nearly 8 million workers," said Cresanti. "Our economy depends on it."

Industry Advice: Understand your business options in the act. 


IRS Extends Filing Deadline – March 21

The IRS officially extended all tax filing deadlines to July 15, including individuals, families and corporations.

The Families First Coronavirus Aid Package – March 13

The second federal action, HR 6201, pushed money toward SNAP benefits and programs for low-income and elderly Americans. It also expands paid leave benefits for anyone who is required to take 14 days or more of leave from work because of qualifying COVID-19 reasons. It covers two-thirds of wages up to $4,000 per month for leave that occurs from January 2020 to January 2021. It also expands funds for unemployment processing and payment for states. 

Outcome for businesses: In Division F of the act, the legislation expands unemployment paid sick days, requiring all employers to allow employees to accrue seven days of paid sick leave and to provide an additional 14 days immediately in the event of a public health emergency, including COVID-19. It also insures that paid sick leave covers parents when a child’s school is closed or if they or a family member is quarantined. This applies to any worker: full time, part time, interns, union employees, new hires, etc. Only independent contractors are not eligible for this expanded sick leave. 

Small businesses (fewer than 50 employees) will be reimbursed under this act for the costs of providing the 14 days of additional paid sick leave used by employees during the emergency after April 2, 2020, and before December 31, 2020.  

Employers will get a tax credit as reimbursement against Social Security taxes. If the credit exceeds the taxes, they will be issued a refund of the difference. The Department of Treasury has also authorized the IRS to provide loan assistance to businesses that cannot pay out sick leave. 

Industry Advice: In an advisory note from law firm Best & Flanagan, the firm advised business owners to contact their payroll provider to systematize tracking of employee usage of paid sick leave related to COVID-19 now to ensure the maximum reimbursement.


Coronavirus Preparedness and Response Supplemental Appropriations Act – March 6

The first federal action was HR 6074. In short, the appropriations bill outlaid $8.3 billion to fund all manner of health testing, vaccine work and state-level responses to the pandemic. 

Outcome for businesses: This act provided appropriations to the Small Business Association Disaster Loans Program Account. This allows small businesses to apply for low interest loans to help with any business expenses or hardship caused by the COVID-19 pandemic. 

Small business owners can apply for loans up to $2 million to “alleviate economic injury caused by the disaster,” including workforce capacity, capital access, supply chain issues, insurance or clean-up costs. The interest rate for such loans cannot crest 3.75 percent. 

Industry Advice: Earmark any costs or damages associated with COVID-19.


State Actions

There are numerous state actions, funds, relief efforts and rules around COVID-19. The national Conference of State Legislatures has a running list of such actions for each state and fiscal responses. 

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About This Blog

The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at




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