Reaching compromise in Congress to create business-friendly policies isn’t pie-in-the-sky. At least not according to Rep. Mike Quigley, who spoke with a group of private equity executives at a pizza chain based in Chicago in his home district.
The discussion addressed public policy issues impacting middle-market companies—including regulation and taxation—as Quigley emphasized the need for lawmakers to find common ground.
Gary LaBranche, president and CEO of the Association for Corporate Growth, presented Quigley with the ACG Growth Award in recognition of the congressman’s efforts on behalf of the middle market.
The Nov. 23 event was hosted by ACG at Giordano’s, a Chicago-based pizza franchise backed by private equity firm Victory Park Capital. Yorgo Koutsogiorgas, the restaurant chain’s president and CEO, described the benefits of private equity investment he’s seen firsthand.
“If it wasn’t for Victory Park, we wouldn’t have the capital to grow,” he said. Koutsogiorgas added that even for a company like Giordano’s with healthy cash flow, outside capital was necessary to open new restaurants. Giordano’s currently has 57 locations along with nine new restaurants in the pipeline.
To help private equity firms that invest in businesses like Giordano’s, Quigley, a Democrat, has crossed party lines. He voted to amend the Dodd-Frank Act, the sweeping legislation passed in 2010 following the recession that increased the regulation of financial services firms, including private equity. Most recently, the congressman helped introduce H.R. 3784, the SEC Small Business Advocate Act, which provides small and midsize businesses with a voice in the Securities and Exchange Commission.
“One way to deal with Dodd-Frank is to have an entity embedded within the SEC that focuses on small and midsize businesses,” he told the group at Giordano’s, which included representatives from other Chicago-area private equity firms.
Another issue of particular importance to franchise businesses like Giordano’s is the joint employer standard. The National Labor Relations Board in August ruled to expand the definition of a joint employer. The decision would make franchise owners liable for actions of their franchisees.
“If it were to become law, it would create a wedge,” Koutsogiorgas said. “Anything (Giordano’s franchisees) do, we’d have to be extremely involved because the risk would be shared,” he added.
Amber Landis, ACG Global vice president of public policy, told Quigley that the joint employer issue is “rising in terms of importance” with ACG and its constituents. She expressed the uncertainty felt by many private equity firms.
“Is private equity going to be considered a joint employer?” she asked, noting “the NLRB decision puts every business-to-business relationship in jeopardy.” Quigley promised to look into the issue.