Over the years, many franchisees, franchisee advocates, and franchisee lawyers have wondered if the Federal Trade Commission (FTC) is really doing anything to regulate franchising. While the International Franchise Association states there are 733,000 franchised outlets in the United States, the FTC assigns less than one person to the task of overseeing franchising.

While COVID-19 has stopped a lot of legislative efforts, it has also brought in new issues, many of them being fast tracked to help deal with the current issues. Here’s a brief legislative update:

CARES Act and PPP: While many documents have been put out on this, and endless webinars have been done around the forgiveness of the PPP loans, the latest from the Small Business Administration (SBA) was released on May 28, in form of the “Paycheck Protection Program Interim Final Rule – Requirements – Loan Forgiveness”.

As you probably know, and has been widely reported, the U.S. House of Representatives passed H.R. 6201, the Families First Coronavirus Act overnight this past Friday.  It will be debated and likely passed in the Senate on Monday, and the President has already expressed his support.  Of course, the question on all of our minds is how does it impact us as franchisees?  First, a lot will come out in the coming days, with many organizations providing their analysis of the legislation.  It’s 124 pages long, so it’s not an easy task.  As detailed analysis becomes available, I will get that to you. A link to the legislation can be found here.

First, I want to start by telling the AAFD membership how excited I am to be working with this organization as the Director of Public Affairs and Engagement.  I thank Robert Purvin for giving me this opportunity to work with all of you in bringing more focus and engagement to the legislative and political process. I truly believe in the power of franchisees to engage in issues that positively impact them, and of course, working to build and protect the equity in their businesses. 

Last week, we sent out an urgent call to our membership to contact your Senators and encourage them to attend a hearing held by the US Senate Banking Subcommittee on Economic Policy. The hearing was titled, “Economic Mobility: Is the American Dream in Crisis?”

What looked like the surprise franchise legislative effort for the year quickly stalled and is now on hold until next year. State Senator Chris Elliott introduced Senate Bill 129, the Protect Alabama Small Business Act, to specifically create protections for franchise owners in the state.

All of us have heard the argument: franchises are in a heavily regulated industry.  Really?  This article will attempt to briefly clarify what is specifically regulated, what isn’t, and is it enough considering those investing in a franchise not only risk their investment, but likely all their assets.