On March 16, 2022, the United States Senate Committee on Small Business and Entrepreneurship held a hearing on Small Business Franchising: An Overview of the Industry, SBA’s Role, and Legislative Proposals. Key testimony was given by Senator Catherine Cortez Masto (NV) to discuss her efforts to improve the SBA loan process to protect both the franchisee and the taxpayer. The entire hearing can be found here, with the hearing starting at 18:00. It should be noted that Senator Cortez Masto has been a strong advocate for franchisees and an awardee of the 2021 AAFD Chairman’s Award.
It is somewhat frustrating watching some of the testimony from those in opposition to the Cortez Masto legislation, as they obviously hadn’t even read the legislation they were arguing against. One interesting point was made by Mr. Aaron Yelewitz as he argued against the bill as unfairly targeting franchise businesses because he has found the “difference in charge-offs between franchisees and independent businesses is statistically insignificant”. That’s a pretty damning statement as franchisees pay high fees to buy into proven business models.
You can review both of the Senator Cortez Masto bills, S.1120 and S.2162.