Green Franchise Businesses - Industry Report 2010
Incentives for Franchised Businesses
For many franchised businesses the recession provided a stimulus for change and innovation. Not only were consumers continuing to show preference for green products and services but there existed a growing need to cut operating costs to maintain competitiveness.
According to research completed by the Harvard Business Review, sustainability is not the burden on bottom lines that many executives believe it to be. Becoming environmentally friendly and reducing energy use can lower costs and increase revenues. In the future, companies that make sustainability a priority will achieve a competitive advantage9.
Tax incentives for renewable energyIn building a new energy economy in the U.S., the government is specifically interested in businesses engaged in green industries, including renewable energy, energy efficiency and sustainable buildings. These areas have proved to be fast-growing sectors of domestic and global economies in recent years.
There exists a wide range of tax credits, rebates and other financial incentives designed to encourage franchised businesses to introduce initiatives that will be environmentally beneficial. Twenty-three states offer some form of tax incentive to encourage businesses to use renewable energy or adopt energy efficiency systems and equipment10. An $819 billion economic stimulus package introduced by the government during 2009, in an effort to restart the economy, has encouraged businesses to implement green initiatives11.
The bill includes:
- $3.4 billion to states for clean energy projects
- A grants program for renewable energy technologies covered by the renewable energy tax incentives
- $3.5 billion for the Energy Efficiency and Conservation Block Grant Program (supports clean energy projects primarily at city and county levels)
- $2 billion for clean energy research & development
According to the Natural Resources Defense Council's Director of Programs, Wesley Warren:
“The House is getting on board with moving America to a clean energy economy. President Obama and Congress are investing in solutions that will help solve our economic and energy challenges together" 12
As cars emit more than 300 million tons of carbon into the atmosphere each year in the United States, for many franchised businesses a fleet of company cars is their biggest carbon producer. Examples of franchises with fleets of company cars are UPS, an international shipping franchise, and Pizza Fusion, a pizza delivery franchise. Under the American Recovery and Reinvestment act, introduced by President Obama, individuals and businesses that buy or lease a new hybrid gas-electric car or truck are eligible for an income tax credit for vehicles "placed in service" starting January 1, 2006, and purchased on or before December 31, 2010. The amount of the credit depends on the fuel economy, the weight of the vehicle, and whether the tax credit has been or is being phased out. Hybrid vehicles that use less gasoline than the average vehicle of similar weight and that meet an emissions standard qualify for the credit.
The government also provides tax credits for Plug-in Electric Vehicles, Plug-In Hybrid Conversion Kits and Low Speed & 2/3 Wheeled Vehicles.
9 Harvard Business Review, “Why Sustainability Is Now The Key Driver of Innovation”, September 2009
10 The PEW Charitable Trusts, “Pew Finds Clean Energy Economy Generates Significant Job Growth”, www.pewtrusts.org
11 The Daily Green, Economic recovery Bill: $100 Billion for Environment and Energy, 1/29/2009, www.thedailygreen.com