Franchises need to be aware of the impact that the recently passed Tax Cuts and Jobs Act could have on their operations. The bill is likely to lead to changes such as financially stable consumers and more deductions.

How Tax Reform Positively Impacts Franchises

Here are some of the ways that your franchise could benefit due to the new legislation.

Funds to Invest in Employees

Extra money means you have the resources to expand your workforce. You’ll be able to make wages more competitive, create and expand training programs for existing employees, and add more workers to help fulfill your business’s goals.

Additional Expenses to Write-Off

As the owner of a franchise, you’ll need to spend money on investments in supplies or equipment, especially when it comes time to upgrade. The bill allows you to write off more expenses than you used to be able to do. This frees up funds to invest in your franchise. The added write-off offers an incentive to invest in real estate, equipment, or other necessities with an allowance up to $1 million for the first year of ownership.

More Cash Flow

One of the biggest changes the new law implements is a lower corporate tax rate combined with larger deductions to help reduce your company’s tax burden. The increase in available funds allows your business to invest and grow, according to Christopher Connor, who has experience working with franchises in various industries such as UPS and Blimpie.


The new tax bill offers a 20 percent deduction for pass-through entities, which is the when income goes through individual tax returns such as with partnerships, S-Corps, and sole proprietorships. The changes can allow you to restructure your company for maximum financial gain.

Financial Growth

The main goal of the bill is to help grow and stabilize the economy. The majority of franchises provide services to the middle class who spend more money since they benefit the most from the tax cuts. Franchises typically include fast food restaurants, a cell phone repair franchise, or other services consumers actively seek out.

The new bill also reduces tax rates for middle-class individuals and families. They can also capitalize on the child tax credit and an increased standard deduction. Your business might not see the benefits right away, but over time you will see the advantages and how the new legislation can help your business grow and flourish in the current economy.