Franchises Share Impacts of Tax Savings

The impacts of tax reform on U.S. businesses big and small is helping to jumpstart job growth, increase wages and result in other positive impacts to local communities. Click here to add your company to the list of IFA members who have pledged to reinvest.

By Andrew Parker, CFE, and Sarah Eustace

Stories continue to emerge about a wide range of companies taking various paths to turning tax savings into economic expansion while helping people directly. Across franchising, companies are stepping up in a variety of ways to serve employees and local communities. Here are some of their stories:

BrightStar Care

Steve Zishka, an Indiana-based franchisee with BrightStar Care, decided to reinvest the tax savings back into the business in the form of increased pay for employees and business expansion plans. “We signed a deal with BrightStar Franchising to build an assisted living facility in Fort Wayne,” he explained. The facility will result in around 20 new jobs in northeastern Indiana.

“We also feel that the tax savings will allow us to provide raises to all employees in 2018,” he continued, the first time in three years involving across-the-board raises to the company’s 250 employees. “These raises are critical for us to continue as the higher standard home healthcare provider in the area,” Zishka said, translating into higher employee retention and recruiting.
 

Franchise Marketing Systems

Alan George, Vice President of IFA supplier member Franchise Marketing Systems, said the company is opening a new office and hiring two new employees as a result of lower taxes.

Related: How Have Lower Taxes Impacted Franchises?

InXpress

Dustin Hansen, CFE, InXpress Americas CEO, reports that the U.S. branch of the company plans to increase staff by 23 percent in early 2018, for both management and entry-level positions. “InXpress USA has also added additional investment dollars into employee development/training, signing an agreement with vendor FranklinCovey to cover a variety of subjects based on employee development plans,” he said.

U.S. Treasury Secretary Stephen Mnuchin gave the keynote at Franchise Expo West in 2017 as part of the push for the tax bill.

Premium Franchise Brands (Jan-Pro and Maid Right)

Michael Borreca is Chief Financial Officer at Premium Franchise Brands, franchisor of the Jan-Pro and Maid Right brands. The impact from lower taxes will result in the ability to invest in more personnel, noting that the company previously only planned to hire two or three new employees and has increased the number to five or six. Existing staff will also see a salary increase.

Lynell Brooks is also with Jan-Pro. Tax reform puts the business “in a much better position to hire more employees, allowing us to grow and expand our small business.”

Trace Thompson, a Jan-Pro franchisee in Tampa, Fla., plans to offer more money through the franchise’s scholarship funds and add more vehicles to the fleet. Thompson also wants to allocate additional funding to research and development, along with hiring.

More: Tax Day 2018: How Franchises Are Investing in the U.S. Economy

Birmingham, Ala.-based Jan-Pro franchisee Dominic Gentile has already hired a new staff member, “and their salary is paid for by tax decrease,” he said. “It’s basically a free way to invest in the growth of my business. Talk about a phenomenal ROI!”

James Palkovic, a Jan-Pro franchisee in Tennessee, is taking the opportunity created by tax reform to hire a new employee. “We’re looking to outsource bookkeeping, which is currently being handled by my wife, who is spread thin with other jobs,” he said. “It will also help us market our business more as we look to grow in Nashville.”

Sun Holdings

Texas-based Sun Holdings President and CEO Guillermo Perales said that the money saved in taxes will result in new stores and more jobs being created. Sun Holdings is a multi-unit franchisee of Burger King, Popeyes Louisiana Kitchen, Krispy Kreme, Arby’s, Golden Corral, Cici’s Pizza and T-Mobile. Perales is the recipient of the 2015 IFA Entrepreneur of the Year award.

Andrew Parker, CFE, is Editor-in-Chief and Sarah Eustace is Associate Editor of IFA’s Franchising World magazine. Join IFA’s Franchise Action Network to get involved with issues that impact the franchise business model.