A Historic Boost for America’s Franchise Sector
What the One Big Beautiful Bill Means, The One Big Beautiful Bill (OBBB), championed by President Donald Trump, is poised to reshape the economic landscape for America’s 830,000 franchise small businesses. From restaurants and hotels to home services and retailers, the bill is being hailed as a game changer by the International Franchise Association (IFA) and business owners across the country.
On June 26, IFA president and CEO Matt Haller, alongside franchise owners from across the nation, met with President Trump at the White House to discuss the bill’s sweeping impact. The message was clear: the franchise industry stands to gain in a big way.
Extension of 199A Deduction: Relief for Pass-Through Entities
One of the most impactful features of the bill is the extension of the 199A deduction. This provision allows pass-through businesses, like LLCs and S corporations, to deduct up to 20% of qualified business income. Most franchises operate under these structures, meaning this extension would significantly lower the tax burden for thousands of small operators.
By preserving this deduction, the OBBB ensures that franchise owners retain more of their income to reinvest in staff, operations, and expansion — ultimately helping them grow their businesses without facing excessive tax penalties.
Bonus Depreciation: $16 Billion in Growth Capital
Another key provision is the continuation of bonus depreciation, allowing franchises to fully expense qualifying capital investments in the year they’re made. The IFA estimates this could result in $16 billion in new investments within just the first year of the bill’s implementation.
Franchise owners can use this capital to renovate stores, purchase equipment, or launch new locations, creating jobs and driving local economic development. For an industry built on expansion and replication, this provision is particularly significant.
EBITDA Interest Deduction: More Financial Flexibility
The OBBB also shifts the calculation of business interest deductions from EBIT (Earnings Before Interest and Taxes) to EBITDA (which includes Depreciation and Amortization). This subtle change gives franchise businesses the ability to deduct more interest, with an estimated $6 billion in added interest deductions across the industry.
This move provides added financial breathing room, especially for growing franchises that take on debt for expansion or reinvestment. It allows business owners to retain more capital and manage growth with greater stability.
Tip and Overtime Tax Elimination: A Win for Workers
Franchise employees also stand to benefit in a major way. The OBBB includes provisions to eliminate federal taxes on tips, which could save tipped employees over $6 billion annually. This change ensures that service workers — from restaurant servers to hotel staff — get to keep more of their hard-earned income.
Additionally, the bill proposes removing federal taxes on overtime pay, putting another $300 million back into the pockets of hardworking franchise employees every year. In an economy where take-home pay matters more than ever, these tax relief measures offer tangible financial boosts for millions of frontline workers.
A Bipartisan Push for Economic Growth
While much of the media attention has focused on the bill’s broader tax implications, the franchise sector has emerged as one of the clearest winners. According to Matt Haller, “The numbers are clear: the tax provisions in the One Big Beautiful Bill will have a hugely positive impact on America’s 830,000 franchise small business owners and their nine million employees.”
The IFA and its member brands have long advocated for permanent tax relief, and the OBBB represents the culmination of those efforts. The bill not only reduces operating costs but also rewards job creation, business reinvestment, and entrepreneurship.
Franchise Industry Ready to Scale Up
With this bill, franchise businesses will gain new tools to scale operations, improve margins, and reward employees. Whether it’s launching a new location, remodeling an existing store, or expanding a regional brand nationally, the OBBB creates a stable foundation for long-term growth.
These reforms are timely. As inflation and wage pressures weigh on small businesses, the OBBB offers real, lasting relief — not just promises or temporary patches.
The Future Looks Bright for Franchise America
The One Big Beautiful Bill delivers on its name, offering practical solutions to the challenges facing the franchise industry. From significant tax savings to increased employee take-home pay, the bill reflects President Trump’s commitment to empowering the businesses that make up the backbone of the American economy.
Franchise owners, workers, and communities alike stand to benefit. With new momentum, the industry is prepared to invest, hire, and grow — driving prosperity in every corner of the nation.
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