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New Bill Offers Steep Tax Breaks for Veterans to Open a Franchise
Mar 13, 2012
Tax rebate would make franchise ownership possible for a larger number of returning veterans
Photo: Alex E. Proimos on Flickr
Veterans looking to start their own business may get a big assist from the United States Senate, which is considering a bipartisan bill that would provide tax rebates to veterans who become franchisees.
The American Growth, Recovery, Empowerment and Entrepreneurship Act is cosponsored by Sens. Marco Rubio, R-Fla, and Chris Coons, D-Del., who introduced the legislation in November. The bill proposes to give veterans a 25 percent tax rebate on the cost of franchise fees, up to $100,000.
“The AGREE Act is a meaningful step to find common ground and create a better environment for job creators to start businesses or expand existing ones,” Rubio said in announcing the legislation.
A report by the International Franchise Association shows that for every $1 million of lending obtained by a franchised business, more than 34 jobs are created. The IFA and other organizations are lobbying Congress to help entrepreneurs create jobs for themselves and others by making it easier to borrow the money they need to start and operate a franchise.
The help would come at the same time that federal agencies are aggressively trying to send more of contracting dollars to veteran-owned small businesses. Executive Order 13360, signed by President George W. Bush, directed all federal agencies to send at least 3 percent of their contracting dollars to businesses owned by service-disabled veterans.
“Now is an excellent time for veterans to use the skills they’ve acquired and open new franchised businesses,” said Jania Bailey, COO of FranNet, a national franchise consulting firm. “These incentives make a franchise purchase much easier for veterans.”
With government contracting adding up to more than $425 billion a year, that means there is $12.5 billion that the government is eager to send to veteran-owned businesses.
The U.S. General Services Administration notes, though, that agencies have fallen far short of the 3 percent goal — largely due to the lack of identified veteran-owned small businesses in the marketplace.
The tax rebate on franchise fees would give service members an ideal way to start businesses that already have a proven business model — many of which are well-suited for government contracting work. FranNet can help veterans identify the opportunities.
The AGREE Act also reflects a growing realization in Congress that if the economy is going to regain its strength, something needs to be done to free up money to start franchises and other small businesses. Small businesses have accounted for 65 percent of new jobs over the past 17 years, according to the Small Business Administration.
Want to learn more about the wide range of franchise opportunities available for returning veterans? Schedule a meeting with a FranNet consultant. The advice and guidance is free and may help you start the next productive chapter of your career.
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