independent joe magazine december 2012 #17

December 2012 • Issue 17 We Communicate, We Educate, We Advocate!

Dunkin’ Franchisees Provide Power, Comfort, Food and Drinks to Disaster Area by Chere Coen

A Wake-Up Call forYour Critical Data by Adam Goldman

and...

Surviving Sandy

The Affordable Care Act:Now, It’s Here to Stay by Susan Minichiello

IndJoe #17 covers print.indd 1 12/12/2012 12:01:14 PM

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DECEMBER 2012 • InDEpEnDEnt JoE 23

index Independent Joe

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2414 16214

19

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Kensington Company& Affiliates

Performance BusinessSolutions

RF Technologies

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Affordable Care continued from previous page

Web Sources:www.aldoi.gov/pDF/Consumers/HealthCareGlossary.pdfwww.healthcare.gov/glossary/c/index.htmlwww.healthreformgps.org/glossary/www.davisonbenefits.com/for website Glossary of terms relating to the Affordable Care Act Updated 8 2012.pdfwww.washingtonpost.com/wp-srv/special/health-care-overhaul-lawsuits/glossary.htmlwww.fairhealthconsumer.org/glossary.aspxhttp://en.wikipedia.org/wiki/patient_protection_and_Affordable_Care_Act www.dol.gov/ebsa/newsroom/tr12-01.html - .ULUnSoUmQt4www.shrm.org/hrdisciplines/benefits/Documents/Employerpenalties.pdfwww.irs.gov/uac/Small-Business-Health-Care-tax-Credit-for-Small-Employers

MA Health Care Law Update

NOTE: Franchise operations located in the Commonwealth of Massachu-setts are subject to the Massachusetts Health Care Reform Law, also known as the Massachusetts Mandated Health Insurance Law, and its subse-quent applicable amendments.

Massachusetts health care insur-ance reform became law in 2006 and served as the prototype for the federal plan. It has since undergone significant revisions, most recently to the Fair Share provisions.

As originally written, the law required any Massachusetts employer with 11 or more full-time equivalent (FtE) employees to provide employees with health insurance that passed certain tests, or pay the Common-wealth $295 per year per FtE. Further, if fewer than 25 percent of employees opted to accept the coverage, the employer had to pay the penalty.

the law made no consideration for the reasons an employee might opt out of employer coverage (e.g., already covered under a spouse’s or parent’s plan or as a senior citizen or military personnel), and the 11 FtE threshold seemed arbitrary and excessively burdensome.

Dunkin’ Donuts franchise owner Rob Branca helped lead an effort to amend the law, bringing franchise owners’ concerns to the attention of key legislators. they agreed the law was unjust and fought to fix it accord-ingly. In August 2012, the Massachu-setts legislature passed, and Gov-ernor Deval patrick signed into law, an act that includes new Fair Share provisions. the new provisions, which go into effect on July 1, 2013, will raise the FtE threshold from 11 to 21 and make an adjustment for employees with other coverage.

Special thanks to Daniel S. Field and David G. Abbott of Morgan, Brown & Joy, LLP for help building this glossary. Morgan, Brown & Joy, LLP is located in Boston and is New England’s oldest and largest management-side employment law firm. See more at www.morganbrown.com.


Hurricane Sandy Should Be A Wake-Up Call for Your Critical Data

by Adam GoldmanFor many of us in the Northeast, Sandy was our first taste of massive destruc-tion and outages that businesses in the South and Midwest know too well. Many franchisees lost power for over a week, faced floods, and even saw their stores and homes destroyed. Hopefully all will be rebuilt, equip-ment will be replaced and things will get back to normal. But what if you lost your Radiant site controller, or your manager’s work-station, or even worse your main com-puter that has all of your QuickBooks files, employee files, and bank files?

If Dunkin’ Loss Prevention, The De-partment of Labor, or the IRS serves you with an audit notice and you do not have these critical files, there is no insurance policy that will help you out of this costly situation. Fines can rise to the tens of thousands of dollars very quickly.

In my pre-Dunkin’ days I was an execu-tive with IBM, providing disaster recov-ery to our clients’ critical data. These companies understood the importance of having a disaster recovery program in place, but they also had full time CIO’s and very deep pockets. So where does that leave the small business owner with one store or a network of 20 stores who has no IT staff and a much more modest budget?

Let’s look at a few options that could save you and your data.1. Radiant has provided a backup of

your site controller to the manager’s workstation. However, in most cases, these two machines are in the same office and if you lose one you prob-ably will lose both.

2. You could burn a CD of your man-ager’s workstation and your main office computer once a month and take it home. The problem with the CD is you have to remember to back

it up, and large amounts of data may not fit on one CD; the same is true of USB thumb drives.

3. External hard drives are increasingly popular due to their low price and the ability to automatically set back-ups of your computer. But what if you have a network of 5 stores? That would require 5 hard drives plus the one for your office machine, and if you have an iPad you are not going to walk around with a hard drive attached to it all day long. Plus, the drive will be housed in the same location as the computer in-creasing the chance that if you lose the computer, you lose the backup drive.

4. Online or “cloud” backup, which until recently was reserved for Fortune 500 companies because of the cost, has now become a cheap give-away for large internet service providers. But, most offer only 2 gigabytes (GB) of space which may be inad-equate for your businesses. The other issue is that your data at work may be stored by one company and your office machine by another. On the positive side, the backup

process takes place automatically and can be set to run daily, weekly, or continuously. Since the process runs in the background, this takes the human factor out of the equation.

If online backup is truly the best solution, how do you choose between storage space provided by your internet provider, those you find through online search, or those which advertise on the radio? I spent the better part of a weekend researching each of the major companies to determine which would best suit my company’s needs.

I wanted a solution that would cover each of my locations: my office machine, my wife’s business computer and the three computers we have at home. I wanted something easy to set up; something that required no human interaction after the initial install. I also wanted a company with a proven track record.

I ended up going to a number of the larger firms that provide off-site data storage capabilities. These firms are consistently

DECEMBER 2012 • INDEPENDENT JOE 3Critical Data continued on page 16

Hurricane SandyShould Be AWake-Up Call forYour Critical DataAdam Goldman

New Laws and Regulations Threaten Franchisee ProfitabilityBetsy Lawson

The Affordable Care Act: Now, It’s Here to StaySusan Minichiello

DDIFO Directoryof Sponsors

Surviving SandyChere Coen

Index ofAdvertisers

03

05

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4 INDEPENDENT JOE • DECEMBER 2012

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DECEMBER 2012 • INDEPENDENT JOE 5

December 2012 • Issue #17Independent Joe ® is published by DD Independent Franchise Owners, Inc.

Editors: Edwin Shanahan, Matt EllisContributors: Chere Coen, Adam Goldman, Betsy Lawson, Susan Minichiello

Advertising: Joan Gould • Graphic Design/Production: Susan Petersen

Direct all inquiries to:DDIFO, Inc. • 150 Depot Street • Bellingham, MA 02019

508-422-1160 • 800-732-2706 • [email protected] • www.ddifo.orgDD Independent Franchise Owners, Inc. is an

Association of Member Dunkin’ Donuts Franchise Owners.

INDEPENDENT JOE®, INDY JOE®, and DDIFO® are registered trademarks of DD Independent Franchise Owners, Inc.

Any reproduction, in whole or in part, of the contents of this publication is prohibited without prior written consent of DD Independent Franchise Owners, Inc.

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When this issue went to press, fran-chisees in New Jersey were looking at a possible 17 percent increase in the state’s minimum wage. In Florida, state regulators are auditing Dunkin’ Donuts franchisees to be sure they are comply-ing with sales tax regulations. And in Illinois, close scrutiny was being given to the legal language governing whether a dozen donuts is considered a bulk sale or not. A business owner’s misinterpre-tation of the Illinois law could result in negative tax repercussions down the line.

While these regulations may seem specific to the individual states involved, they are singular in theme says New Hampshire franchisee John Motta. “Leg-islation, whether at the local, state or national level, is going to have a bigger and bigger impact on the small business owner,” he said.

With more than three decades in the Dunkin’ Donuts system, Motta knows first-hand all the responsibilities vying for owners’ attention: from hiring and sched-uling, to overseeing product quality and customer satisfaction, to bookkeeping and taxes. Motta acknowledges that especially for the new business owner, it can feel like there aren’t enough hours in the day to keep stores running smoothly, let alone stay current on legislative is-sues at home and across the country.

And yet it’s crucial they be informed, Motta says, so they can have an active voice in the process. One of the reasons DDIFO took a leadership role in found-ing the Coalition of Franchisee Asso-ciations (CFA) in 2007 was because the organization provides a platform to organize and speak for franchisees at the national level. Based in Washington, DC, the CFA brings together some of the largest and most reputable independent franchisee associations to leverage the collective strength of franchise owners (see sidebar “CFA Members” page 21).

Motta, a member of CFA’s government relations subcommittee, says he makes it a point to stay current on issues by reading and attending workshops and forums. Like many businesspeople, he often has a more thorough understand-ing of the business impact of impending or newly passed regulations than the legislators responsible for their passage. An example of this just happened last July during the annual CFA Day Forum on Capitol Hill.

Motta met with a senator’s top aide to discuss health care regulations and laid out the figures as he understood them. The aide expressed surprise that the legislation affected small business owners to the extent Motta had outlined. At the time, Motta was visiting the Hill with a small group of CFA members, representing various franchise systems. Motta’s hope for this coming July’s CFA Day Forum is to have some two dozen or more DDFIO members in attendance as well.

“There is definitely strength in numbers.”Motta says he has noted an increased emphasis on government relations from Dunkin’ Brands over the past few years. There will be cases, such as the use of Styrofoam cups, where the interests of Dunkin’ Brands aligns with the franchi-sees, but that will not always be the case. As such, the more the franchisees can work with one another to speak from their collective best interest, the better.

Motta acknowledges learning the ins and outs of operating a Dunkin’ Donuts restaurant can seem overwhelming for a new franchise owner. Navigating the political process is an even greater chal-lenge. But, when franchisees speak with one voice—whether it’s on paper or at a meeting—there is room for a wide-range of experience.

New Laws and Regulations Threaten Franchisee ProfitabilityDDIFO Working to Leverage Collective Strength to Protect Franchise Owners

by Betsy Lawson

New Laws continued on page 17


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Two years of campaigning and an esti-mated $3 to $6 billion dollars in spending later, the makeup of the federal govern-ment is essentially the same as before the election, and there is little doubt the Affordable Care Act (ACA), also known as Obamacare, will survive. Small busi-ness owners and large employers alike need to start planning now for the upcom-ing health insurance provisions.

“For Dunkin’ Donuts franchise owners who have not been subject to state man-datory health laws before, it is crucial to understand the costs associated with the Affordable Care Act and to begin planning now,” said Daniel S. Field, a partner with Morgan, Brown & Joy, LLP, a Boston law firm specializing in representing employ-ers in employment and labor law matters. “If you haven’t done so already, it is es-sential to begin shopping for health insur-ance options and to work closely with a tax professional to weigh plan costs and potential tax benefits, and to plan for the provisions of the ACA that become effec-tive in 2013 and beyond.”

With numerous rules and potentially substantial penalties, the ACA presents a variety of challenges for employers. Two initial critical steps must be taken: The first entails examining the size and composition of an employer’s workforce. The second requires analyzing circum-stances under which commonly-owned or commonly-controlled organizations must be considered a single “employer” for regulatory purposes. And throughout, it is vital to understand the terminology used in the law itself. (See page 22 for a Glos-sary of Terms.)

Automatic EnrollmentThe automatic enrollment provision requires an employer with more than 200 full-time equivalent (FTE) employees to automatically enroll new full-time em-ployees in one of the employer’s health benefits plans and to continue the enroll-ment of current employees. The rule also requires adequate notice and the oppor-tunity for an employee to opt out.

The Department of Labor has delayed

implementation of the automatic enroll-ment provision until further guidance and related regulations are issued, likely sometime in 2013 or later. While not yet in effect, however, it appears to be just a matter of time.

The Employer MandateUnder the ACA, large employers must offer to full-time employees a health ben-efits plan that is both affordable and of minimum value, or pay tax penalties if at least one full-time employee obtains cov-erage from a Health Insurance Exchange (HIX) and receives a federal premium tax credit. Like the well-publicized individual mandate, under which nearly all Ameri-cans will be required to maintain health insurance or pay a tax penalty, the em-ployer mandate goes into effect January 1, 2014.

Employers must offer the option for employees to cover their dependents, but the employer is not required to contrib-ute to the cost for dependent coverage. The mandate applies to “large employ-ers,” that is, those with 50 or more FTE employees.

How HIXs workEach state must establish a fully certified and operational HIX by January 1, 2014. These exchanges are state-managed “marketplaces” where individuals and small businesses can shop for and pur-chase private health insurance. Federal premium tax credits and subsidies on HIX coverage will be available to individuals for whom employer-sponsored insurance does not meet the affordability standard.

The affordability standard requires that, for an employee whose household in-come falls between 100 percent and 400 percent of the federal poverty line, his/her contribution to the self-only premium (i.e., not the premium for family members/dependents) must not exceed more than 9.5 percent of his/her household income. Since employers do not have the right to demand disclosure of actual household income, the government is providing a “safe harbor” exception: Employers who use employee W-2 income to calculate

affordability will not be subject to fines for violating the standard. The minimum value standard means that a plan must cover at least 60 percent of allowable medical expenses.

“Health Insurance Exchanges will be the lynchpin of the employer mandate and will have a significant role in screening and identifying insurance carriers that meet the affordability standard,” Field said. “As we have already seen in Mas-sachusetts, these exchanges will be a significant clearinghouse and informa-tional resource for identifying compliant, credible coverage.”

Determining Automatic Enrollment or Large Employer StatusTo help determine whether or not a franchise owner is an applicable large employer, the U.S. Department of the Treasury provides the following guidance for calculating FTE employees.

For each calendar month of the preceding calendar year, employers must:

1. Count the number of full-time employ-ees, defined as those who work on average 30 hours per week per month.

2. Calculate the number of FTEs by ag-gregating the number of hours worked by part-time employees per month and dividing by 120. (For example, an employer with 20 part-time employ-ees who each work an average of 96 hours per month yields 16 additional FTEs, i.e., [(20 x 96) ÷ 120].)

3. Add the number of full-time employees and calculated FTEs for each of the 12 months in the preceding calendar year.

4. Add the monthly totals and divide by 12. If the resulting number is 200 or more, the employer must follow the automatic enrollment rules. If the result is 50 or more, the employer is considered an applicable large em-ployer under the employer mandate.

Affordable Care continued on page 11

The Affordable Care Act:Now, It’s Here to Stay by Susan Minichiello

CML OperationsMid-State Isuzu35 Southwest Cutoff, Worcester, MA 01604Craig Judge • [email protected] • www.midstateisuzu.com

CommunicationsComcast Business Services500 South Gravers Road, Plymouth Meeting, PA 19462Comcast National Sales • [email protected] • www.business.comcast.com/internet/index.aspx

Sprint3 Van De Graaff Drive, Burlington, MA 01803Caroline Fedele • [email protected] • www.sprint.com/ddifomembers

Cost RecoveryBedford Cost Segregation, CPAs 60 State Street, Suite 700, Boston, MA 02109Bill Cusato • [email protected] • www.bedfordcostseg.com/who_we_serve/ddifo.asp

EF Cost RecoveryPO Box 79361, North Dartmouth, MA 02747Ed Craig • [email protected] • www.efcostrecovery.com

Performance Business Solutions, LLC87 Lafayette Road, Suite 11, Hampton Falls, NH 03844Jeff Hiatt • [email protected] • www.revenuebanking.com

AccountingAdrian A. Gaspar & Company, LLP, CPAs1035 Cambridge Street, Suite 14, Cambridge, MA 02141Robert Costello • [email protected] • www.gasparco.com

Bederson & Company LLP - CPAs and Consultants405 Northfield Avenue, West Orange, NJ 07052Steven Bortnick, CPA • [email protected] 973-736-3333 • www.bederson.com

Cynthia A. Capobianco, CPA60 Quaker Lane, Suite 61, Warwick, RI 02886-0114Cynthia Capobianco • [email protected]

James P. Ventriglia, CPA, Inc.145 Phenix Avenue, 2nd Floor, Cranston, RI 02920 Jim Ventriglia • [email protected] • www.jpvcpa.com

Rubiano & Company, CPA’s5 Austin Avenue, Suite 1, Greenville, RI 02828Daniel J. Rubiano, CPA • [email protected] • www.rubianocpa.com

Sansiveri, Kimball & Co., LLP55 Dorrance Street, Providence, RI 02903Joseph Mansour • [email protected] • www.sansiveri.com

Thomas Colitsas and Associates, CPA103 Carnegie Center, Suite 309, Princeton, NJ 08540Tom Colitsas • [email protected] • 609-452-0889“A Member of Franchise Pros”

Back Office IKMS Group, Inc. PO Box 6221, Manchester, NH 03108Cliff Pratt • [email protected] • www.ikmsgroup.com

Jera Concepts - Order and Production Management Software17 Fruit Street, Hopkinton, MA 01748Wynne Barrett • [email protected] • www.jeraconcepts.com

Building Trane HVAC225 Woldwood Avenue, Woburn, MA 01801Jonathan Ralys • [email protected] • www.Trane.com/commercial

ViewPoint Sign and Awning35 Lyman Street, Northboro, MA 01532Bill Gavigan • [email protected] • www.viewpointsign.com

WatchFIre Signs1015 Maple Street, Danville, ILDevon Mourer • [email protected] • wwwwatchfiresigns.com

Business Broker Kensington Company & Affiliates185 Roslyn Road, Roslyn Heights, NY 11577David Stein • [email protected]: 516-626-2211 • M: 718-490-2218 • www.kensingtoncompany.com

Directory of SponsorsPlease Visit The DDIFO Sponsor Directory online at: www.DDIFO.org


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EnergyGlacial Energy 24 Route 6A, Sandwich, MA 02563Kristy Solt • [email protected] 340-201-4323 • www.glacialsales.com/dunkindonuts

Metromedia Energy200 West Park Avenue, Suite 125, Westborough, MA 01581Scott Werman • [email protected] • www.mmenergy.com

Finance Business Financial Services3111 N. University Drive, Suite 800, Coral Springs, FL 33065Scott Kantor • [email protected] • www.businessfinancialservices.com

Capital One Bank710 Route 46 East, Suite 306, Fairfield, New Jersey 07004Stuart Vorcheimer • [email protected] • www.capitalone.com

Centrix Bank & Trust 1 Atwood Lane, Bedford, NH 03110 Deborah Blondin • [email protected] 603-589-4071 • www.centrixbank.com

Direct Capital Franchise Group155 Commerce Way, Portsmouth, NH 03823Robyn Gault • [email protected] • www.franchise.lendedge.com

Fidelity Bank465 Shrewsbury Street, Worcester, MA 01604Sally Buffum • [email protected] • www.fidelitybankonline.com

First Franchise Capital2715 13th Street, Columbus, NE 68601Karen Johnson • [email protected] • www.firstfranchisecapital.com

GE Capital, Franchise Finance 201 Merritt 7, 2nd Floor, Norwalk, CT 06851Christine Keating • [email protected] • www.gefranchisefinance.com

Infinity Franchise Capital3154 18th Avenue, Suite 3, Columbus, NE 68601Sharon Soltero • [email protected] • www.infinityfranchisecapital.com

Joyal Capital Management Franchise Development50 Resnik Road, Plymouth, MA 02360Daniel Connelly • [email protected] • www.jcmfranchise.com

Merchant Cash & Capital450 Park Avenue South, 11th Floor, New York, NY 10016Seth Broman • [email protected] • www.merchantcashandcapital.com

NFA Restaurant Finance400 E. 22nd Street, Suite A, Lombard, IL 66148Larry Howard • [email protected] • www.nfaloans.com

Priority Capital174 Green Street, Melrose, MA 02176Brian Gallucci • [email protected] Ext 14 • www.prioritycapital.com

Directory of Sponsors

Sponsors cont. page 18

Thank You to Our Sponsors!

Please Visit The DDIFO Sponsor Directory online at: www.DDIFO.org


Susquehanna Commercial Finance2 Country View Road, Suite 300, Malvern, PA 19355Brian Colburn • [email protected] • www.susquehanna.com

TCF Franchise Finance300A Lake Street, Suite B, Ramsey, NJ 07446Mike Vallorosi • [email protected] • www.tcfef.com

United Capital Business Lending215 Schilling Circle Suite 100, Hunt Valley, MD 21031Trey Grimm • [email protected] • www.unitedcapitalbusinesslending.com

Food Products CSM Bakery Products1901 Montreal Road, Suite 121, Tucker, GA 30084Marla Cushing • [email protected] • www.csmbakeryproducts.com Quaker Oats A Division of PepsiCo402 Kilarney Way, Royersford, PA 19468Ed Bowes • [email protected] • www.pepsico.com

Human Resources CareerBuilder.Com 400 Crown Colony Drive, Suite 301, Quincy, MA 02169Maureen O’Neill • [email protected] • www.careerbuilder.com

Employers Reference Source1587 Hamilton Avenue, Waterbury, CT 06706Sandra Fabrizio • [email protected] • www.employersreference.com

Gecko Hospitality 1415 West 22nd Street, Tower Floor Oakbrook, IL 60523 Robert Krzak • [email protected] 630-390-1000 • www.geckohospitality.com

Granite Payroll Associates176 Granite Street, Qunicy, MA 02169Marco Schiappa • [email protected] • www.granitepayroll.com

Gulpfish.com1005 Main Street, Pawtucket, RI 02860Ilya Reikhrud • [email protected] Ext 101 • www.gulpfish.com

JobOn 141 Log Canoe Road, Stevensville, MD 21409Pete Steiner • [email protected] 774-217-0340 • www.jobon.com

Ovation Payroll2 Stamford Landing 68 Southfield Rd. #100, Stamford, CT 06902Jim Ferreira • [email protected] • www.ovationpayroll.com

Snagajob4851 Lake Brook Drive, Glen Allen, VA 23060Erin Brumfield • [email protected] • www.snagajob.com/employer-solutions


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DECEMBER 2012 • INDEPENDENT JOE 11Affordable Care continued on page 22

“As is clear from the regulatory guidance, the ‘large employer’ provisions of the ACA sweep up many smaller businesses that most of us would hardly think of as large employers,” said Field.

Calculating the Large Employer Penalty Applicable large employers can be penal-ized for not offering coverage to full-time employees and their dependents at all, or for offering coverage that doesn’t meet the affordability or minimum value stan-dards.

• Applicable large employers who do not offer coverage to full-time employees and their dependents will be subject to an annu-al tax of $2,000 times the total number of full-time employees* if at least one full-time employee receives a federal premium tax credit for HIX cover-age. The ACA permits employers to subtract the first 30 employees when calculating the tax penalty for not of-fering coverage at all.

• Applicable large employers who offer coverage to full-time employees and their dependents that doesn’t meet the affordability or minimum value stan-dards will be subject to an annual tax of $3,000 times the number of full-time employees* eligible for and receiving tax credits for HIX coverage. These taxes (or penalties) are capped at the employer’s potential taxes for not offer-ing any coverage as described above.

*Refers to true full-time employees (those working on average 30 hours per week in any month), not FTEs

The Role of Common Ownership or Common ControlFor employers with some level of com-mon ownership or shared corporate control over multiple business entities, an essential piece of this puzzle is the deter-mination whether or not some or all enter-prises are considered a single employer under the ACA. An employer that is part of a group of businesses under the common control of small group of individuals, as defined by IRS tax code, may be treated as a single employer.

In a recent webinar, the Coalition of Fran-chisee Associations (CFA) advised, “The common control test said that if two or more businesses have the same five or fewer owners collectively owning at least 80% of the shares or interest, they shall be considered run by a single employer.”

The CFA emphasized not taking this at face value, but consulting with one’s ac-countant and/or legal counsel for specific guidance.

“The common ownership rules that will control the determination of whether re-lated business entities will be aggregated are particularly concerning for small, family businesses as they may trigger the ACA’s large employer obligations,” Field said.

Next Questions to Ask & Steps to Consider“As we move into 2013, DDIFO leader-ship is looking to host several regional meetings throughout the year that will address the Affordable Care Act. We will advise members as soon as specific meeting dates and locations are con-firmed,” said DDIFO Executive Director Ed Shanahan. “Our goal is to ensure our members are as informed as they can be with regard to the Act and its impact on our franchise community.”

In the meantime, here are some of the questions and steps Field suggests

exploring sooner rather than later. Some of these include elements of the ACA not

detailed in this article but still important to any employer’s business. Field recommends an employer bring such issues to his/her benefit broker or health care provider, accountant, attorney and/or other professional advisors or

associations.

Regarding provisions already in effect:• Can your business take advantage of

the small business tax credit?

• Is your business eligible for a Medical Loss Ratio (MLR) rebate from your insurance provider?

• Is your business large enough to be subject to the W-2 reporting require-ment?

Regarding impending provi-sions:

• Is your business an applicable large employer?

• Should you consider any changes to hiring plans or work schedules?

• Does your business offer health insur-ance coverage?

If no, do you need to start doing so?

If yes, does it meet the affordable and minimum value standards?

If not, what should you do?

As evidenced by changes since the ACA first passed in 2010, it is by no means a static piece of legislation. There are many moving parts including additional rules, regulations and guidance still to be issued as the provisions are implemented and amended over time. It is vital that franchi-sees be vigilant and talk with their trusted advisors.

The information contained in this article is general in nature and offered for infor-mational purposes only. It is not offered and should not be construed as legal advice.

Affordable Care continued from page 7


“We had some tough times,” Sheikh said. “The good news is nobody got hurt.”

He’s “exploring the options” with FEMA and other organizations to rebuild the restaurants damaged by flood since he lacked flood insurance.

“I called up my insurance company and said I want every kind of insurance — flood, hurricane, earthquake. She said, ‘You don’t need earthquake,’ and I said, ‘I don’t care, I want it’,” he said with a grim laugh.

Many of his employees had little or no power in their homes as well and suf-fered through the long lines obtaining gasoline for their cars.

“Hats off to my crew members,” Sheikh said. “Most had lost everything and worked 10 to 12 hours a day with a smile on their faces.”

Mo Khalid, a franchise owner in New-ark, N.J., didn’t suffer physical damage to his 12 stores but the power outages kept 10 of them in the dark. He didn’t rent a generator before the storm hit; afterwards couldn’t find one.

Laura Donavan of New York City was disappointed when the Starbucks stores in her neighborhood closed due to Hurricane Sandy, which hit the New York area late Oct. 29. Needing her morning cup of coffee, she called her local Dunkin’ Donuts and found them open.

“I immediately threw a hoodie over my flannel pajama top, changed my clothes, and dashed out the door,” Do-navan wrote in her blog. “Dunkin’ had a decent amount of customers as well.”

She gave the employees a “massive tip” and shared her story with the world.

“The company slogan ‘America runs on Dunkin’ has taken on a whole new meaning for me,” she concluded.

The scene played out throughout the affected areas where super storm Sandy knocked out power to a record 8.5 million homes across 21 states, the hardest hit being coastal New York and New Jersey. In cases where Dunkin’ Donuts restaurants had power, lines formed outside, with people desperate for not only Wifi, heat and coffee, but companionship as well.

“Customers were looking for the basics,” said franchise owner Scott Campbell, who owns 46 restaurants in Queens and Nassau County. “They love the routine; it’s part of their lives. They seek you out because it’s stable to them. It’s what they know and it’s comforting.”

The storm forced Campbell into disas-ter mode — from getting restaurants back online to opening a new location by Kennedy Airport — but he made sure customers, first responders and those in shelters were taken care of with Dunkin’ Donuts products, he said.

“If you’re going to give something, you want to give back to the community,” Campbell explained. “It wasn’t all about making money, it was about giving back.”

Dealing with DisasterRizwan Sheikh, who owns a network of five stores on Long Island, lost two to flooding, and had another three without power for days. One store had no elec-tricity for two weeks. And because he lives in Oceanside, Sheikh lost power in his home for 14 days as well.

Storm Victims Themselves, Dunkin’ Franchisees Provide Power, Comfort, Food and Drinks to Disaster Area by Chere Coen

Toppled trees from Sandy knocked out power to

communities throughout New Jersey.

Surviving Sandy


Sandy continued on page 15

stock ran low on certain items because suppliers couldn’t make their deliveries - the DCP did its job. Chief Executive Kevin Bruce says the DCP brought in extra drivers, worked with its fuel supplier to keep trucks gassed-up and kept the Dunkin’s run-ning.

“Overall the members were pleased,” he said.

A sentiment echoed by Long Island’s Rizwan Sheikh. “They were very, very helpful and they did everything they could to get supplies out here.”

But an event of this magnitude did cause disruptions. On his regular schedule, DCP delivers once a day to Campbell’s restaurants. After the hurricane, Camp-bell requested DCP meet a modified delivery schedule that would allow him to produce all day to meet increased customer demand. Campbell chose Cover Photos: The flag waves over a devastated neighborhood in the Breezy Point

section of Queens. Photo courtesy David Handschuh, New York Daily News. Dunkin’ Donuts in Cranston, RI collects donations to aid victims of Hurricane Sandy.

“I called all the way up to Canada to see if I could rent generators, and then all the way down to Florida,” he said. “I had no luck renting something big enough to run a Dunkin’ Donuts.”

Khalid says he lost $200,000 worth of cash flow because he wasn’t able to bring his stores back online.

Another complication Khalid faced was getting employees in to work, since many of them lived in the neighborhood and were facing the same lack prob-lems—no electricity and no gas for their cars. None of his locations are in low-lying areas so flooding wasn’t an issue, but gasoline was hard to find because gas stations in the area weren’t able to pump for lack of power.

“We scrambled,” Khalid explained. “We went to people’s houses to pick up employees. We drove them back to the stores. We had our own personal cars and cab service for the employees. And then, the other stores that were closed, whoever was willing to work called me, and then I sent different cars to pick them up and bring them to these stores because we needed a lot of people to work behind the counters to handle the high volume.”

Many people in the New York metro nev-er faced a storm aftermath as disruptive

as Sandy’s. Scott Campbell learned lessons from his family who lived through Hurricane Katrina in 2005. After Sandy’s storm surge, Campbell mobilized to as-sist employees living in the impacted area who had no electricity at their homes and no access to gas for their cars.

He also needed to move product around his network of restaurants, carrying donuts from store to store, filling in need where it appeared. “We weren’t sure where the demand would kick in,” he said. “It was all hands on deck.”

Because he lives north of New York City—away from the hardest hit areas—Campbell had access to gasoline and would drive home, fill tanks and return them to the city.

Supply Chain SupportThe storm also challenged the DCP’s distribution center in Westampton, NJ, which supplies 2,000 Dunkin’ Donuts shops in New York, New Jersey and Pennsylvania. Despite the impact of Sandy on the region - power outages forced the facility to run on genera-tor power for a week, trucks had to be re-routed because of flooded roads and

Rizwan’s Island Park, NY location was also a total loss after seawater flooded the inside.

Satellite photo courtesy of NOAAHurricane Sandy was the largest Atlantic hurricane ever, affecting 24 states. Its force caused over $71 billion in damage.

Outside damage to Rizwan Sheikh’s shop on Austin Blvd. in Island Park, NY is minor compared to the inside. Seawater flooded the entire restaurant.


In 2012, 21 stores have been sold/under contract/letter of intent.We currently represent 12 DD owners in 7 states looking to sell their network of stores.


Sandy continued from page 13

products that were fast and easy to create and Dunkin’ Brands worked with him, he said. Half of his stores are gas stations, so the market side supplied themselves, another plus. “It (the gas station franchises) made it easier for us if DCP couldn’t make it to us.”

Comfort FoodOne of Mo Khalid’s shops in New-ark became a refuge. The shop had power because its electric lines were

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Rhode Islanders donating to the Red Cross relief effort for Hurricane Sandy victims at a Dunkin’ Donuts in Cranston.

Dunkin’ Brands has donated $100,000 to the American Red Cross,

and The Dunkin’ Donuts and Baskin-Robbins Community Foundation

has donated $100,000 to Feeding America, both to aid in the recovery of those

affected by Hurricane Sandy.

Feeding America is the country’s largest domestic hunger-relief organization and the donation will be

distributed among numerous food banks in the areas hardest hit by Sandy. The DDBRCF has had a national partnership with Feeding America since 2007 and has donated nearly $1 million to support local food banks.

underground and once residents real-ized the shop had power, they lined up to get in. They were seeking shelter in a place with electricity, food and drinks.

“Imagine, [that shop was] the only food place where you could eat, use a bathroom and charge your cell phones,” said Khalid. “So, it was kind of a rescue place for the people to come, get a cup of coffee, and get food for the kids.”

“It was chaotic,” said Sheikh of his Long Island shops. “The lines were out the door.” He says he let everyone use the facilities, access a phone and charge their phones. “We tried our best to ac-commodate them. The truth was I felt guilty charging them for coffee. These were my neighbors, the people down the street. But at the end of the day I had to make a living.”

Campbell understands the needs that arise after a storm since experiencing his family’s difficulties after Hurricane Katrina. But he has a new outlook on the value of his franchises, whether as a place for necessities such as power and a hot cup of coffee or the opportunity to be with others.

“People really, really utilized us,” he said. “Probably more than we would have understood before this.”


Critical Data continued from page 3

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Some charged monthly based on the per-computer cost and the amount of storage, which I thought could end up costing me far too much money for my eight computers. In fact, one of the proposed solutions would have cost as much as $1,800 for the year. There are others however, that allow for an un-limited number of computers with 250 GB of storage for as little as a couple of hundred dollars annually. That was an easy decision for me at that point – all 8 of my computers with a total of 250GB of available space for under $300 per year—a bargain considering the ben-efits and peace of mind.

After I made my decision, it took less than 10 minutes to download and set up each computer, specifying which files I wanted to add or remove from the backup set. The solution also provided

the ability to remotely monitor each computer and the amount of data being stored, using either a web browser or a smartphone app. The app displays all of the files that were backed up on each machine. You can open and view the file or email it. For example, if you created a file at one store, you could instantly see the file and send it to another store without being in either location.

The system will also send you an email if one of the computers fails to backup for any reason. The software is fairly

small, intuitive even for a novice and I have not seen any changes in the performance of my machines (except during the initial backup which could take 24 hours if you don’t have a high-speed connection).

After using the service for the last four months, I have been extremely pleased with both the solution and the company’s 24/7 customer service. In fact, customer service representatives will gladly help walk you through the process of setting up your account and each computer on the phone. Or you can allow them remote control of your computer and they will set it up for you.

Regardless of the solution you choose, backing up your data is critical—not just when disaster strikes.

Adam Goldman is a DD franchise owner with a successful multi-store network in upper New Jersey. Contact him at [email protected].

The system will also send you an email if one of the computers fails to backup for any reason.


New Laws continued from page 5


“Newcomers can watch and learn, gain experience and see how it’s done,” Motta said.

A Different ClassificationFranchisees in Florida are waiting for the dust to settle on potential changes regarding how Dunkin’ shops are clas-sified and taxed. Until now, the state has classified a stand-alone Dunkin’ Donuts as a bakery rather than a restaurant; but, if the Dunkin’ is paired with a Baskin Robbins, it is already classified as a restaurant. According to franchisees interviewed by Independent Joe, the state is looking at a single type of classification which could result in, among other things, changes to how franchisees charge sales tax on bulk sales of donuts, muffins and bagels.

The Florida Department of Revenue (DOR) has initiated audits on several franchisees to determine whether they have been charging sales tax on bulk items.

According to the Florida DOR website, bakery products are exempt from tax

when they are “sold for intended consumption off the premises,” but can be taxed when they are “sold in quantities of five or less [and] are as-sumed to be sold for consumption on the premises.”

But, by rewriting the rules, the state would require customers to pay sales tax on all bulk sales—even if the box is sealed with a sticker—indicating the items were not intended to be consumed on premises.

Florida franchisees have retained the accounting firm Ernst & Young to re-view DOR audits and get clarification on how the system will work going forward.

“It’s still early in the process,” said one Florida franchisee. “We hope to know soon how this is going to play out.”

Strength in PartnershipsHow to tax a dozen donuts is playing out in a different way in Illinois.

At issue is the application of the state’s restaurant tax rate (about 10 percent) versus the bulk sales rate (about 2 per-cent). The restaurant tax rate applies to all goods purchased. It impacts Dunkin’ Do-nuts customers because they are charged the same tax rate on one donut as they are on a dozen, even though a dozen is technically a bulk sale. If that same customer purchased a dozen donuts in the grocery store, he would pay the lower bulk rate tax.

Franchisee Dennis Gramm is a two-store operator in greater Chicago and under-stands that value is an important driver in a very competitive QSR market. Chicago area franchisees identified an opportunity to create value for the consumer if donuts sold by the dozen are classified as bulk retail sales.

In other words, Dunkin’ Donuts restaurants would continue to charge and collect the same amount per dozen (or more) donuts, but because the state is applying a lower tax rate to the bulk sale, the guest can


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LegalLisa & Sousa Attorneys at Law5 Benefit Street, Providence, RI 02904Carl Lisa, Sr. • [email protected] • www.lisasousa.com

Paris Ackerman & Schmierer LLP101 Eisenhower Parkway, Roseland, NJ 07068David Paris • [email protected] • 973-228-6667www.paslawfirm.com “A Member of Franchise Pros”

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Directory of SponsorsSponsors continued from page 9

Access to Money ATM, Inc./Cardtronics 628 Route 10 - Suite 8, Whippany, NJ 07981Doug Falcone • [email protected] • www.accesstomoney.com

Belshaw Adamatic Bakery Group814 44th Street NW, Suite 103, Auburn, WA 98001Fran Kauth • [email protected] 206-718-3573 • www.belshaw-adamatic.com

Bunn-O-Matic Corporation 1400 Stevenson Drive, Springfield, IL 62703Todd Rouse • [email protected] • www.bunn.com

Cashmaster Cash Solutions2108 Trving Blvd., Dallas, TX 75207Jayson Dunston • [email protected] ext. 2 • www.cashmaster-us.com

Delphi/Fast Track 2+2 Drive-Thru Timer3500 West Moore Avenue, Suite M, Santa Ana, CA 92704Mike Pierce • [email protected] • www.fasttracktimer.com

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Muzak3318 Lakemont Boulevard, Fort Mill, SC 29708Joanna Barrett • [email protected] • www.muzak.com

New England Drive-Thru Communications12 Wildwood Road, Auburn, NH 03032Angela Bechard • [email protected] • www.nedrivethru.com

New England Repair Service - a div. of New England Coffee Co.100 Charles Street, Malden, MA 02148Jerry Brown • [email protected] • www.nerepairservice.com

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SKAL East, IncPO Box 303, 31 Eastman Street, Easton, MA 02334Jim Zafirson • [email protected] • www.skaleast.com/index.cfm?keyword=dunkin

SureShot Dispensing Systems100 Dispensing Way, Lower Sackville, NS, Canada B4C 4H2Steve Robert • [email protected] • www.sureshotdispensing.com

TredSafe/WalMart450 West 33rd Street, New York, NY 10001Ted Travis • [email protected] • www.walmart.com

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DDIFO® does not endorse or recommend commercial products, processes, or services. A DDIFO® sponsor is paying to advertise, and it is not to be considered a product or service endorsement by DDIFO®. Furthermore DDIFO® does not control or guarantee the currency, accuracy, relevance or completeness of information provided by sponsors in their advertising.


New Laws continued from page 17

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pocket the savings. According to Gramm, as with any change in tax law, franchisees need to be edu-cated to ensure they understand how the change applies to their business.

“DDIFO has to take a very active role,” Gramm said with regard to how the organization communi-cates information about this and other legislative and regulatory issues to its members. He stressed that DDIFO must act collabora-tively to collectively represent the voice of the franchisees.

One way DDIFO is getting active, noted Asheesh Seth, vice chair-man of DDIFO’s board, has been through reaching out to the Illinois Chamber of Commerce. Seth said a member of the Illinois Chamber was invited to address a group of local franchisees to discuss how the tax rate applies to all goods purchased in QSRs and other restaurants.

Andrew Proctor, the director of advocacy for government affairs at the Illinois Chamber says his organization recognizes that busi-ness owners–large and small–first have to be experts in their area of business, and may not have the background or understanding to decode the intricacies of a piece of legislation. One way the Chamber helps inform constituents, is by sending a weekly legislative bulletin focused on issues that can impact business owners.

Timing is EverythingGetting on the public radar can make a huge difference when it comes to impending legislation, according to Shub Hegde, who operates a number of Dunkin’ Donuts in Ocean County, New Jersey. As this issue was going to press, Hegde was awaiting a meet-ing date with Governor Chris Christie to discuss the impact that raising the state’s minimum wage would have on small business owners like himself.

On November 19, 2012, the New Jer-sey Senate Budget and Appropriations Committee released legislation that would increase the state’s minimum

wage from $7.25 per hour to $8.50, and tie future increases to the Consumer Price Index. The bill, S-3, is now before the full Senate.

If enacted, it would establish the third-highest minimum wage rate in the country, behind only Washington State ($9.04) and Oregon ($8.80). The last in-crease in New Jersey’s minimum wage was in 2009, when the federal minimum wage was increased to $7.25 per hour.

Hegde acknowledges that raising the wage may be a political eventuality in New Jersey, but that there is still room to negotiate. “It’s an increase of 17 percent,” he said. “It’s an exorbitant number.” He and other business lead-ers are hoping any significant increases can be phased in over time, to cush-ion the blow and give small business owners the chance to run their own numbers.

The timing of the bill comes as a shock to storm battered New Jersey. Like other business owners along the Jersey Shore, Hegde has focused his atten-tion on getting stores re-opened and assessing the impact to his bottom line. Adding 17 percent to his cost of doing business will be another shock.

Still, Hegde realizes he is not alone. “Right now it’s a New Jersey issue, but it’s going to spread around like wildfire.”

Members of the Coalition of Franchisee As-sociations are listed on a display at the July 2012 CFA Day event in Washington DC.



New Laws continued from previous page

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Dunkin’ Donuts franchise owner Rob Branca is CFA vice chairman and a member of its fair franchising and government relations committees. “The CFA member associations are amongst the strongest and best structured in franchising and have made ground breaking strides for their franchisees. There really is no other place that franchisees can learn firsthand about the details of these achievements from the other franchisee associations,” Branca said.

Learn more at www.thecfainc.com

• Asian American Hotel Owners Association

• Buffalo Wings National Franchisee Association

• Domino’s Franchisee Association

• Dunkin’ Donuts Independent Franchise Owners Association

• Edible Arrangements Independent Franchisees Association

• Independent Association of Massage Envy

• Independent Coalition of Franchise Owners

• Independent Hardee’s Franchisee Association

• Independent Association of Little Caesars Franchisees

• Long John Silver’s Franchisee Association

• Meineke Dealers Association

• North American Association of Subway Franchisees

• National Coalitions of Association of 7-Eleven Franchisees

• National Franchisee Association, Inc., An Association of Burger King Franchisees

• Pharmacy Franchisee & Owner Association, Inc.

• San Francisco Monterey Bays 7-Eleven Franchise Owners Association

• Service Station Franchisee Association

Current Members of the Coalition of Franchisee AssociationsWith the addition of the Long John’s Silver’s, Domino’s, 7-Eleven and Pharmacy Franchise Owners associations in 2012, the Coali-tion of Franchisee Associations (CFA) now represents more than 25,000 franchise owners, more than 66,000 locations and more than 1.2 million employees. Headquartered in Washington, DC, its members include:


Affordable Care continued from page 11

Affordable Care continued on next page

Glossary of ACA-Related TermsAffordable Care Act (ACA): The Affordable Care Act (ACA) is also known formally as the Patient Protection and Afford-able Care Act (PPACA) and informally as Obamacare or fed-eral health care. President Barack Obama signed the Act into law on March 23, 2010. Together with the Health Care and Education Reconciliation Act (enacted by Congress to amend the ACA/PPACA and signed into law by President Obama), it represents the most significant regulatory overhaul of the U.S. health care system since the passage of Medicare and Medicaid in 1965. The ACA is aimed primarily at decreasing the number of uninsured Americans and reducing the overall costs of health care. It stipulates a number of mechanisms intended to increase the coverage rate including mandates, subsidies and tax credits for employers and individuals. Additional provisions are aimed at improving health care outcomes and streamlining the delivery of health care.

Automatic Enrollment: Section 18A of the Fair Labor Standards Act (FLSA), as added by section 1511 of the ACA, directs an employer to which the FLSA applies, and that has more than 200 full-time equivalent (FTE) employees, to automatically enroll new full-time employees in one of the employer’s health benefits plans (subject to any waiting period authorized by law), and to continue the enrollment of current employees in a health benefits plan offered through the employer. Section 18A further requires adequate notice and the opportunity for an employee to opt out of any cover-age in which the employee was automatically enrolled. Re-lated regulations from the U.S. Department of Labor (DOL) have yet to be issued. The DOL has indicated that, until such regulations are issued (which it says will happen by 2014), employers are not required to comply with section 18A.

Employer Mandate: Beginning in 2014, employers meet-ing certain ACA thresholds will be required to offer minimum essential health benefit packages or pay a set portion of the cost of those benefits for use in Health Insurance Exchanges (see definition below). This ACA provision provides that an applicable large employer (50 or more FTE employees) could be subject to penalty if any full-time employee is certified to receive a premium tax credit or subsidy.

Health Insurance Exchange (HIX): The ACA requires each state to create a Health Insurance Exchange (HIX) or Health Benefit Exchange, which is a competitive insurance mar-ketplace where individuals and small employers can shop for health plans. Exchanges will assist individuals and small businesses in comparing and purchasing qualified health plans. If a state decides not to establish an Exchange, the federal government will establish an Exchange in that state. The Exchanges are to be implemented by states or the fed-eral government by 2014.

Affordability Standard: A term used in the ACA to desig-nate both the types of coverage arrangements available to individuals and the level of family income that is considered available to pay health insurance premiums, the affordability

standard requires that, for an employee whose household income falls between 100% and 400% of the federal poverty line, his/her contribution to the self-only premium (i.e., not the premium for family members/dependents) must not exceed more than 9.5% of his/her household income. Employers can use an employee’s W-2 income to calculate affordability.

Minimum Value Standard: In order for a health benefits plan to meet the “of minimum value” threshold under the ACA, the plan must cover at least 60% of allowable medical expenses.

Large Employer Penalty: Beginning in 2014, employers with 50 or more FTE employees may be subject to a maxi-mum annual penalty of up to $2,000 or $3,000 per employee, respectively, if the employer either (1) offers no coverage; or (2) offers coverage, but such coverage does not meet the af-fordability or minimum value standards as defined above.

Common Ownership/Common Control: An employer that is part of a group of businesses under the common control of small group of individuals, as defined by IRS tax code, may be treated as a single employer under the ACA. According to the Coalition of Franchisee Associations (CFA), “The com-mon control test said that if two or more businesses have the same five or fewer owners collectively owning at least 80% of the shares or interest, they shall be considered run by a single employer.” This should not be taken at face value, however; it is essential to further consult with one’s accoun-tant and/or legal counsel for specific guidance.

Medical Loss Ratio (MLR): A Medical Loss Ratio (MLR) is the proportion of premium dollars that an insurer spends on health care services and certain recognized plan adminis-tration costs relative to health insurance premiums paid by subscribers. The ACA requires health insurers offering health insurance coverage in either the group or individual (non-group) market to submit an annual report to the Secretary of Health and Human Services on their MLR and to provide rebates in circumstances in which losses exceed permis-sible levels (80% in the individual market; 85% in the group market). The MLR and rebate requirements apply to both new and grandfathered insurance plans and went into effect for plan years beginning September 23, 2010.

Small Business Tax Credit: The ACA provides certain small businesses that offer health plans a tax credit. These tax credits vary with the size, contribution and tax status of the small business. To be eligible, the business must: cover at least 50 percent of the cost of single (not family) health care coverage for each employee; have fewer than 25 FTE employees; and those employees must have average wages of less than $50,000 a year. Such businesses may qualify for a small business tax credit of up to 35% (up to 25% for non-profits) to offset the cost of insurance. Starting in 2014, the small business tax credit increases to 50% for qualifying businesses (up to 35% for non-profits).

*All programs and offers are subject to final credit approval by Direct Capital®. Please contact Direct Capital for eligibility and program terms.

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Direct Capital Franchise Funder Franchise Financing

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Remodels & New Stores! Direct Capital® is a long standing DIRECT lending partner of the Dunkin’ Brands.® We have the experience and capital to quickly get financing in place for your project.

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was a pleasure dealing with them as I could spend my time watching over the store’s progress instead

of being concerned with financing.”

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Joyal Capital Management, LLC

Kensington Company& Affiliates

Performance BusinessSolutions

RF Technologies

Sprint

Starkweather & Shepley Insurance

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Access to Money ATM, Inc.

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Bright House Network

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Direct Capital Franchise Group

Exchange Authority

Fidelity Bank

Affordable Care continued from previous page

Web Sources:www.aldoi.gov/pDF/Consumers/HealthCareGlossary.pdfwww.healthcare.gov/glossary/c/index.htmlwww.healthreformgps.org/glossary/www.davisonbenefits.com/for website Glossary of terms relating to the Affordable Care Act Updated 8 2012.pdfwww.washingtonpost.com/wp-srv/special/health-care-overhaul-lawsuits/glossary.htmlwww.fairhealthconsumer.org/glossary.aspxhttp://en.wikipedia.org/wiki/patient_protection_and_Affordable_Care_Act www.dol.gov/ebsa/newsroom/tr12-01.html - .ULUnSoUmQt4www.shrm.org/hrdisciplines/benefits/Documents/Employerpenalties.pdfwww.irs.gov/uac/Small-Business-Health-Care-tax-Credit-for-Small-Employers

MA Health Care Law Update

NOTE: Franchise operations located in the Commonwealth of Massachu-setts are subject to the Massachusetts Health Care Reform Law, also known as the Massachusetts Mandated Health Insurance Law, and its subse-quent applicable amendments.

Massachusetts health care insur-ance reform became law in 2006 and served as the prototype for the federal plan. It has since undergone significant revisions, most recently to the Fair Share provisions.

As originally written, the law required any Massachusetts employer with 11 or more full-time equivalent (FtE) employees to provide employees with health insurance that passed certain tests, or pay the Common-wealth $295 per year per FtE. Further, if fewer than 25 percent of employees opted to accept the coverage, the employer had to pay the penalty.

the law made no consideration for the reasons an employee might opt out of employer coverage (e.g., already covered under a spouse’s or parent’s plan or as a senior citizen or military personnel), and the 11 FtE threshold seemed arbitrary and excessively burdensome.

Dunkin’ Donuts franchise owner Rob Branca helped lead an effort to amend the law, bringing franchise owners’ concerns to the attention of key legislators. they agreed the law was unjust and fought to fix it accord-ingly. In August 2012, the Massachu-setts legislature passed, and Gov-ernor Deval patrick signed into law, an act that includes new Fair Share provisions. the new provisions, which go into effect on July 1, 2013, will raise the FtE threshold from 11 to 21 and make an adjustment for employees with other coverage.

Special thanks to Daniel S. Field and David G. Abbott of Morgan, Brown & Joy, LLP for help building this glossary. Morgan, Brown & Joy, LLP is located in Boston and is New England’s oldest and largest management-side employment law firm. See more at www.morganbrown.com.


Why Grassroots Politics Benefit Your Bottom Line by Susan Minichiello

October 2012 • Issue 16 We Communicate, We Educate, We Advocate!

I’ll Have What He’s

Having!by

Stefanie Cloutier

Franchise Owne

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IndJoe #16 covers print.indd 1 10/16/2012 11:47:56 AM