Rep. Ellison Introduces Bills to Improve the Franchise System
Statement
Rep. Keith Ellison (D-MN) introduced two bills to strengthen the ability of franchisees to succeed as business owners. The Fair Franchise Act of 2015 (H.R. 3196) and the Small Business Administration (SBA) Franchise Loan Transparency Act (H.R. 3559) ensure franchisees receive accurate financial information prior to buying a business and sign agreements that enhance their ability to profit from the business. (h.
"If we want an economy built on fairness, we must protect the Americans investing, hiring, and paying taxes in our communities," Rep. Ellison said. "But the current model for franchising tilts the balance of power too strongly to the franchisor. The two bills introduced today will give small business owners more information and more say in the businesses they run. When we empower franchisees, we encourage small business owners to invest in their employees and our communities."
"Franchisees often invest their life savings in their franchise businesses, leaving many of these small business owners personally vulnerable to deceptive, unfair, or predatory practices," Rep. Jared Huffman (D-CA) said. "This bill simply guarantees franchisees across the country basic business protections--already afforded to most other businesses--to help avoid bankruptcy and ensure good faith in contracts. I am glad to be continuing the work I started in the California State Assembly and I am grateful to Rep. Ellison for his leadership to support these small businesses."
"We thank Rep. Ellison for his leadership in introducing these bills. The Fair Franchise Act addresses many of our key principles as stated in the Universal Franchisee Bill of Rights", said Keith Miller, Chairman of the Coalition of Franchisee Associations. "We also appreciate the support of initial cosponsors, Rep. Conyers, who worked closely with Rep. Coble on similar legislation in the late 1990's, and Rep. Huffman, who four years ago authored legislation in California to protect franchisees. The CFA board looks forward to working on this legislation with stakeholders in the industry towards a solution that protects franchisee profitability and equity"
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