HELP VETERANS OWN FRANCHISES ACT
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STATUS
The Help Veterans Own Franchises Act (“HVOF” Act/H.R. 2672) was introduced June 3, 2009 by Reps. Leonard Boswell (D-Iowa) and Aaron Schock (R-Ill) and seeks to increase the level of business ownership by America’s military veterans. The bill establishes a tax credit for franchise businesses that choose to offer qualified veterans a discounted initial franchise fee. The tax credit would amount to 50 percent of the total franchise fee discount offered by the franchisor to the franchisee and would be capped at $25,000 per unit. It also provides a tax credit to the veteran who chooses to purchase a franchise and open a business in their local community.
BACKGROUND
Given the current economic climate, many franchised businesses are finding it harder to access the capital they need to open new stores and recruit new investors. In order to encourage economic growth and to make it easier for veterans to own their business, the International Franchise Association (IFA) supports enactment of this tax credit for those franchise systems that choose to offer qualified veterans a discounted franchise fee.
Franchise small businesses find that veterans make great franchise owners because of the skills and experiences they have acquired through their military service. The number of franchise systems participating in VetFran reached an all time high of 411 in May 2009. To date, purchases of franchised businesses by former military personnel have surpassed 1,370, and 222 others are in negotiation. There is a wide variety of franchise small businesses from which to choose, and most which offer significant reductions of the initial franchise fee required are available to veterans for purchase.
The HVOF Act is a natural compliment to IFA’s popular Veterans Transition Franchise Initiative (VetFran), established in 2002 to help those who have so honorably served their country to seek the dream of business ownership.
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