April 2010 Franchising World
The Help Veterans Own Franchises Act will further encourage small-business franchise ownership by veterans.
By Jason Straczewski
In 2009, U.S. Reps. Leonard Boswell (D-Iowa) and Aaron Schock (R-Ill.) introduced legislation creating a tax incentive for franchisors to select veterans as franchisees. The Help Veterans Owns Franchises Act (H.R. 2672) would provide a tax incentive for franchisors who offer discounted initial franchise fees to qualified military veterans. Since the qualities of strong personal leadership and a structured environment are highly valued in both franchising and the military, this legislation asks the question: Why give a veteran a job when they can be given the keys to the store?
The HVOF Act is a natural complement to IFA’s popular Veterans Transition Franchise Initiative, established in 2002 to help those who have honorably served their country to seek the dream of business ownership. Since its inception in 2002 VetFran has helped more than 1,700 veterans purchase franchises. The Help Veterans Own Franchises Act will further encourage small-business franchise ownership by veterans.
Since the last report on this legislation, support for the measure in Congress has grown to more than 30 co-sponsors as this issue of Franchising World goes to press. Moreover, the HVOF has the support of both the chairman and the ranking member of the House Armed Services Committee Rep. Ike Skelton (D-Mo.) and Rep. Buck McKeon (R-Calif.), respectively. Also, members of the House Veterans’ Affairs Committee co-sponsors include Reps. Michael Michaud (D-Maine), Glenn Nye (D-Va.), Jeff Miller (R-Fla.), John Boozman (R-Ark.), Vern Buchanan (R-Fla.) and Phil Roe (R-Tenn.). IFA expresses its appreciation to all co-sponsors of the act, including the original sponsors for their continued support. Members of the franchising community can get involved by thanking these lawmakers and reaching out to lawmakers to co-sponsor this legislation by visiting the State, Federal and International Issues page in the Government Relations section of Web site Franchise.org .
Key Components of the Bill
• Incentivizes franchisors to offer discounted franchise fees to qualified veterans,
• Establishes a tax credit worth 50 percent of the total franchise fee discount offered by the franchisor to the franchisee,
• Requires that franchisors use their existing franchise fee deal, offered to all individuals, as the base calculation,
• Caps the credit at $25,000 per unit,
• Establishes a tax credit for the franchisee veteran, equal to 25 percent of the remaining franchise fee, and,
• Caps eligibility for both the franchisor and franchisee at franchise fees of $100,000.
Franchising Industry Help Needed
IFA Director of Advocacy Meredith Nethercutt, the association’s grassroots administrator, urged members of the franchising industry to contact their members of Congress about the bill and share personal stories or statistics which will help garner support for the bill.
Nethercutt expressed appreciation to IFA Franchise Congress member Jan Van Blarcum, founder and CEO of Creative Tutor 4 Kids International, who personally requested that Schock make a floor statement prior to Veterans Day last year, urging his colleagues to lend their support to the bill. In addition, IFA created a dedicated issue brief toolkit within its Government Relations Web site for veterans in franchising.
Jason Straczewski is director of government relations for the International Franchise Association. He can be reached at 202-662-0797 or jstraczewski@franchise.org .