ABF calls for incentives to support first jobs in franchising

Incentives to recruit young people and reductions in payroll taxes are among the priorities in the policy agenda presented to Brazil’s federal government by the Brazilian Franchising Association (ABF). The proposals put employment at the centre of the franchise sector’s demands. The sector ended 2025 with 1.76 million direct jobs in Brazil.

First jobs gain prominence on the agenda

According to a report published by Gazeta do Povo on 30 October, ABF highlights that 17% of direct jobs in the franchise sector are held by people in their first formal role. The figure illustrates franchise networks’ contribution to helping people enter the labour market and underpins the association’s case for measures to encourage youth recruitment.

The association included these incentives in a broader set of proposals for the government. Its employment agenda also includes reducing payroll-related charges in labour-intensive activities, strengthening collective bargaining and digitising employment compliance requirements.

“Payroll tax relief and incentives for first jobs are key causes for us,” ABF president Tom Moreira Leite told the publication. His statement sums up two issues the association intends to bring into public debate: the cost of maintaining a workforce and the conditions needed to widen access to formal employment.

The 17% figure refers to people in their first formal job, not the overall proportion of young people in the workforce. This distinction matters when interpreting the indicator, so that it is not taken to show more than was reported.

A sector supporting 1.76 million jobs

The recruitment debate concerns a business sector with a substantial presence in Brazil. ABF reported that the franchise sector ended 2025 with around 202,000 operating units and turnover of R$301.7 billion, up 10.5% on the previous year.

Growth continued in the first half of 2026, when turnover rose by 9.7% compared with the same period in 2025. The figures were presented at ABF Con, held during the week the report was published. According to the data released, the franchise sector accounts for 2.3% of Brazil’s gross domestic product.

These indicators help put the employment agenda into context. The number of operating units shows the reach of the businesses involved, while the 1.76 million direct jobs illustrate the size of the workforce to which the employment proposals relate.

Turnover growth, however, should not be confused with recruitment growth. These are different indicators: the revenue figures presented do not, on their own, establish how much employment increased over the same period.

Payroll, collective bargaining and digital compliance

The call for payroll tax relief focuses on labour-intensive activities. Alongside this, ABF is seeking incentives for first jobs, linking the discussion about employment costs to opportunities for people who have not yet held a formal role.

Strengthening collective bargaining is another part of this agenda. It sits alongside the proposal to digitise employment compliance requirements, forming a programme that goes beyond payroll taxation to address how employment relations are negotiated and managed.

These are the association’s policy demands, not benefits already available to franchisees. For anyone running a franchise unit, this distinction is important: anticipated cost reductions should not be treated as actual changes to budgets or hiring conditions.

Predictability also enters the debate

Although employment is a distinct policy area, ABF’s agenda also calls for greater tax predictability and simpler compliance requirements during the transition to Brazil’s new tax system. According to the association, 94% of franchisees use Simples Nacional, Brazil’s simplified tax regime for small businesses.

Décio Pecin, who will take over as ABF president in January 2027, identified uncertainty as a factor affecting business decisions. According to the report, he linked the lack of clarity over future tax rates to a more cautious approach among businesses and households.

In practice: franchisees should monitor the progress of any proposed employment incentives, but plan staffing and costs around the rules currently in force. ABF’s proposals reflect its advocacy priorities for the sector, not legislative changes that have already been approved.