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    Having President Trump and a Business Friendly Presidency in Office Makes a HUGE Difference for Franchising and Small Business

    Having President Trump and a Business Friendly Presidency in Office Makes a HUGE Difference for Franchising and Small Business

    President Donald Trump will have a significant impact on the franchise and small business market due to his policy approaches and past influence on business. Let’s look at the ways his policies have supported growth in the small business and franchise sector.

     

    1. Tax Reductions for Small Businesses

    During his presidency, Donald Trump introduced the 2017 Tax Cuts and Jobs Act (TCJA), one of the largest tax reform bills in U.S. history. For small businesses and franchise owners, the TCJA provided several advantages:

     

    • Reduced Corporate Tax Rates: The TCJA lowered the corporate tax rate from 35% to 21%, allowing small businesses operating as corporations to retain more profits. This reduction made it easier for franchisees and small business owners to reinvest in their operations, hire more employees, and expand their businesses.

     

    • Pass-Through Deductions: Many franchises and small businesses operate as pass-through entities (such as LLCs, S-corporations, and sole proprietorships). The TCJA allowed these businesses to deduct up to 20% of their income, effectively reducing their tax burden. This tax deduction increased cash flow, making it easier for franchise owners to meet operational costs and improve profitability.

     

    • Increased Depreciation Deductions: The TCJA also increased the limits for business asset depreciation, allowing franchisees to deduct the cost of assets, such as equipment, faster. This change benefited franchises that required significant investment in assets, such as restaurants, fitness centers, and retail outlets.

     

    These tax reductions helped reduce the financial strain on small business owners and encouraged new investments, making franchises more attractive to potential investors.

     

    2. Deregulation and Reduced Compliance Burden

    One of Trump’s primary policy goals was reducing regulations to make it easier for businesses to operate. Many small businesses and franchises struggle with the complexities and costs associated with regulatory compliance, so Trump’s deregulatory approach was welcomed by many in the business community.

     

    • Reduced Environmental and Labor Regulations: Some regulations affecting labor and environmental standards were rolled back or reduced under Trump. While maintaining essential protections, these changes reduced compliance costs for small businesses and franchises, especially those in highly regulated industries like food service and hospitality.

     

    • Eased Financial Regulations: Trump’s administration rolled back aspects of the Dodd-Frank Act, which had increased financial regulations. Easing these restrictions made it easier for small businesses to access capital, as community banks and credit unions had fewer regulatory hurdles when lending to smaller enterprises. This was beneficial for franchisees seeking financing for initial franchise fees, expansion, or renovations.

     

    • Focus on Streamlining Government Oversight: Under Trump, there was a broader effort to simplify business regulations and eliminate unnecessary oversight, especially at the federal level. This focus on deregulation made it easier for new franchisees to enter the market and helped existing business owners focus more on growth and less on bureaucratic requirements.

     

    For franchise operators, these deregulatory efforts resulted in lower administrative costs and greater flexibility, allowing them to allocate more resources toward business expansion and development.

     

    3. Emphasis on Economic Growth and Consumer Spending

    Trump’s pro-business approach also included policies designed to boost the economy, increase consumer spending, and create a favorable environment for small businesses.

     

    • Economic Growth Policies: Trump focused on policies that aimed to stimulate economic growth, including infrastructure spending and promoting a manufacturing resurgence in the U.S. Strong economic growth means higher consumer spending, which benefits franchises and retail-based small businesses that rely on consumer traffic and demand.

     

    • Unemployment Reduction: Trump’s policies prioritized job creation, leading to low unemployment rates during much of his tenure. With more people employed and with disposable income, consumer spending increased, creating more demand for franchise services such as dining, fitness, and retail. Franchises in particular benefited as local demand for their services grew.

     

    • Rising Stock Market and Consumer Confidence: A rising stock market and strong consumer confidence were hallmarks of Trump’s presidency. These conditions created an optimistic economic environment, encouraging more entrepreneurs to consider franchise investments. When the public is confident in the economy, there is often an increased willingness to spend on services provided by franchises, from dining out to fitness memberships.

     

    This economic momentum increased the appeal of investing in franchises, as steady consumer spending and growth made franchise opportunities more promising.

     

    4. Support for Domestic Production and Small Business

    Trump’s focus on supporting American manufacturing and domestic production encouraged businesses to source locally, which benefited small businesses that produce or purchase American-made goods. Additionally, there was a general push toward incentivizing local hiring and supporting smaller domestic businesses over foreign competition.

     

    • “America First” Approach: Trump’s policies promoted domestic production, benefiting small businesses and franchises by encouraging consumers to support American businesses. For instance, franchises that focused on locally-sourced or U.S.-made products could capitalize on the administration’s push for domestic goods.

     

    • Reduced Global Competition for Small Businesses: Policies that prioritized domestic products over imports helped some small businesses reduce competition from larger, international corporations. This was advantageous for certain franchise models that relied on domestic supply chains or offered locally-produced goods.

     

    • Incentives for Small Manufacturers: Some incentives and grants under Trump’s administration encouraged small manufacturing businesses, creating opportunities for franchises in sectors like specialty retail to offer locally-produced goods. This focus supported small businesses, especially in regions that depended on manufacturing.

     

    5. Expanded Small Business Administration (SBA) Programs

    The Trump administration sought to expand access to Small Business Administration (SBA) loans, which are a key financing source for franchisees and small business owners. The SBA provides low-interest loans and guarantees that can make it easier for entrepreneurs to obtain funding to start or expand their franchises.

     

    • Increased Loan Limits: The administration worked with the SBA to increase loan limits, making more funds available to small business owners and franchisees. This was especially beneficial for new franchisees who required upfront capital to cover franchise fees, equipment, and initial operating costs.

     

    • Simplified SBA Loan Process: Efforts to simplify the SBA loan application process made it easier for small business owners to access financing. For franchises, which often require significant capital, these changes meant easier access to the funds needed to get started or expand.

     

    • COVID-19 Support: During the COVID-19 pandemic, Trump’s administration implemented the Paycheck Protection Program (PPP), which provided crucial support for small businesses and franchises to retain employees and manage operating costs. The program’s forgivable loans helped many franchisees stay afloat during lockdowns and economic uncertainty.

     

    The expansion of SBA programs and targeted relief during the pandemic demonstrated Trump’s commitment to helping small businesses remain resilient and survive challenging times.

     

    6. Focus on Employment and Wage Policies

    Trump’s approach to employment policies generally focused on promoting business growth while giving businesses flexibility over wage decisions. This was particularly beneficial for franchises, where labor costs are a significant portion of operational expenses.

     

    • Minimum Wage Flexibility: Unlike some of his successors, Trump did not push for substantial increases in the federal minimum wage. For franchises operating in industries with slim profit margins, such as fast-food or retail, this flexibility in wage laws allowed them to manage labor costs and remain competitive.

     

    • Support for Independent Contractors: Trump’s policies were more lenient toward businesses employing independent contractors, giving franchisees flexibility in managing their workforce. This policy was particularly beneficial for franchises in service industries that rely on flexible staffing models.

     

    Maintaining lower labor costs allowed franchises to invest in other areas, such as marketing, product development, and expansion, ultimately creating a favorable environment for growth.

     

    Donald Trump’s presidency had a notable impact on the franchise and small business market through tax reductions, deregulation, and pro-business policies. His administration’s focus on economic growth, domestic production, and business-friendly policies created an environment that benefited franchises and small businesses alike. Lower corporate tax rates and expanded SBA loan programs made it easier for prospective franchisees to access the funding needed to start or grow their businesses. Additionally, the emphasis on deregulation and flexible wage policies allowed franchise owners to reduce costs and maintain competitive pricing.

     

    For investors considering a franchise, the Trump administration’s policies emphasized a commitment to fostering an environment that supports business growth, profitability, and innovation. This approach not only helped franchise owners thrive but also encouraged a more robust and resilient small business sector overall. While political landscapes shift, Trump’s policies highlighted the potential for government action to create favorable conditions for franchise investment and entrepreneurship, demonstrating the influence that political leadership can have on the broader business environment.

     

    For more information on how to find the right Franchise, search the American Veteran Franchises network:

    https://americanveteranfranchises.com/explore/

     

    For more information on how to grow your business through franchising and franchise your business model, contact FMS Franchise:  www.FMSFranchise.com