New Bill Aims to Defray Costs for Veteran Franchisees

There’s a bipartisan effort in Congress to make franchising opportunities more accessible to veterans. The proposed Veteran Entrepreneurs Act of 2017 would create a tax credit to cover 25 percent of the initial franchise fees for veteran owners.

The bill has the approval of the International Franchise Association (IFA), which runs the VetFran initiative, and has also earned has earned support from the American Legion and the Veterans of Foreign Wars. U.S. Representatives Julia Brownley (D-CA), and Claudia Tenney (R-NY), are the sponsors of the bill.

The IFA’s latest research indicates that veterans own one out of every seven franchises. While many franchises offer discounts to veterans, the proposed law would make it even easier for them to afford startup costs. The average franchise fee runs between $30,000 and $50,000. The new law would apply to franchise fees less than $400,000.

If passed, the amendments to the tax code allowing for the credit would apply to taxable years beginning after 2017. The veterans eligible for the credit are those who served in the active military, naval, or air service, and who were released from service under conditions other than a dishonorable discharge. Eligible veterans could also opt to transfer the tax credit to their franchisors in exchange for a discounted fee.

The bill places a duty upon Small Business Administration and the Secretary of Veterans Affairs to publicize information regarding discounted franchise fee to veterans’ service organizations and veteran advocacy groups.

Gaining access to the capital needed to start a franchise is one of the main obstacles in the way of more veterans becoming franchisees. The bill aims to defray some of those costs and help veterans achieve entrepreneurial success.

According to the IFA, veterans make excellent franchisees for the following reasons:

**Veterans acquire strong leadership skills and a thorough understanding of teams.**

Military experience includes leading people, improving processes, and accomplishing the mission. Just like in the military, in franchising, the mission is accomplished by the team.

**Franchises run on systems.**

Implementing systems and following procedures with precision, emphasized in military training, leads to success in franchising.

**Franchises provide training.**

Veterans are trained and taught very specific skills to be used to carry out very specific tasks. Franchises have comprehensive training and support built into their opportunities. This means a veteran can enter a new field, follow the franchisor’s proven business model, and receive the training, guidance, and support a new business owner needs to succeed.