,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #dga  ,,9 ,,! ,,h\se ,,(            
,,repres5tatives  ,janu>y #ab1 #bjag,mr4
 ,ellison 7= himself1 ,mr4 ,huffman1    
,mr4 ,cony]s1 & ,ms4 ,mc,collum7        
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,en]gy & ,comm]ce  ,a  
,,bill  ,to e/abli% m9imum /&>ds (      
disclosure by fran*ises ^: fran*isees   
use loans gu>ante$ by ! ,small ,bus9ess 
,adm9i/ration4  #a4 ,%ort title ,?is    
,act may be cit$ z ! ,small ,bus9ess    
,adm9i/ration ,fran*ise ,loan           
,transp>5cy ,act ( #bjag4  #b4 ,f9d+s & 
purpose  7a7 ,f9d+s ,congress makes !   
foll[+ f9d+s3  7#a7 ,fran*ise bus9esses 
repres5t a l>ge & gr[+ segm5t ( ! retail
 & s]vice bus9esses ( ! ,unit$ ,/ates & 
are rapidly replac+ m traditional =ms ( 
small bus9ess own]%ip 9 ! economy ( !   
,unit$ ,/ates4  7#b7 ,! ,small ,bus9ess 
,adm9i/ration 7,,sba7 gu>antees mu* ( ! 
f9anc+ available 9 fran*is+4  7#c7 ,!   
,,sba requires pro =ma projections1     
includ+ project$ rev5ue1 = ! fir/ ye> ( 

op]ations ( a fran*ise z "p ( ! /&>d    
op]at+ requirem5ts = a fran*isee to     
qualify = f9anc+4  7#d7 ,on ,july #ac1  
#bjaa1 ! ,,sba ,(fice ( ,inspector      
,g5]al publi%$ an audit 7,report ,no4   
#aa-af7 on loans made "u section #g7;a7 
( ! ,small ,bus9ess ,act to ,hunt+ton   
,le>n+ ,c5t] fran*ises :]e fir/ ye>     
rev5ue projections 7 all significantly  
inflat$4  7#e7 ,on ,july #b1 #bjac1 !   
,,sba ,(fice ( ,inspector ,g5]al publi%$
 an audit evaluation 7,report ,no4      
#ac-ag7 %[+ t ! ,,sba ne$$ to improve ! 
managem5t ( its #g7;a7 loan portfolio   
risk1 specifically ) c]ta9 fran*ise br&s
 t _h exceptionally high default rates t
 cont9u$ to receive gu>ante$ loans f !  
,,sba4  7#f7 ,9 ,septemb] #bjac1 !      
,gov]nm5t ,acc\ntability ,(fice publi%$ 
a /udy 7,,gao-#ac-gei7 %[+ t ov] !      
#aj-ye> p]iod f #bjjc to #bjab1 #bh     
p]c5t ( #g7;a7 loans to fran*ises       
requir$ a gu>antee paym5t4 ,! /udy 0    
bas$ on #cb1cbc loans total+ #aj4f      
billion1 :i* requir$ #a4e billion 9     

gu>antee paym5ts4 ,! report specifically
 /at$1 ,pot5tial fran*isees %\ld include
 fir/-ye> rev5ue e/imates 9 _! ,,sba    
loan applications4 ,h[ev]1 ?is in=mation
 is n necess>ily available to pot5tial  
fran*isees 9 ! fran*ise organization's  
disclosure docum5t44  7#g7 ,fran*ise    
companies mo/ (t5 collect royalties bas$
 on gross rev5ue2 !re=e1 rev5ue data on 
ea* fran*ise outlet are readily         
available4  7#h7 ,:ile bo? ! fran*isor &
 ! l5d] pr(it z a result ( ! ,,sba      
f9anc+1 only ! fran*isee be>s ! total   
liability = ! loan4  7b7 ,purpose ,x is 
! purpose ( ?is ,act to-- 7#a7 ensure   
transp>5cy 9 ! loan processes ( ! ,small
 ,bus9ess ,adm9i/ration1 s t ! fran*isee
 borr[]1 ! l5d]1 & ! ,adm9i/ration all h
 access to in=mation t is key to ! l5d+ 
process2  7#b7 remove any hidd5         
discussions betwe5 ! fran*isor & ! l5d] 
on f9ancial data critical to ! loan     
approval process2  7#c7 l[] ! fees &    
rates *>g$ to fran*isee borr[]s2 &  7#d7
 help ensure l[] default rates 9 ord] to

 make m money available = loans4  #c4   
,requir$ disclosures  7a7 ,9 g5]al ,a   
fran*isor1 except = a fran*isor ( a     
fran*ise 9 ! lodg+ indu/ry1 %all        
disclose 9 ! requir$ ,f$]al ,trade      
,commission disclosure docum5t1 !       
foll[+3  7#a7 ,! av]age fir/-ye> rev5ue 
= all fran*ise locations = ea* ( !      
prec$+ five ye>s ( op]ation4  7#b7 ,!   
numb] ( fran*ise locations t w5t out (  
bus9ess or 7 sold by ! fran*isee dur+ ! 
fir/ ye> ( op]ation = ea* ( ! prec$+    
five ye>s4  7#c7 ,av]age rev5ues = all  
locations ( ! fran*ise = ea* ( ! prec$+ 
five ye>s ( op]ation1 aggregat$ to %[ ! 
top #be p]c5t1 middle #ej p]c5t1 & !    
bottom #be p]c5t ( rev5ue4  7b7         
,disclosure to prospective fran*isee    
,any f9ancial in=mation relat+ to !     
p]=mance ( any location ( a fran*ise t  
is provid$ by ! fran*isor1 or its       
repres5tatives1 to ! l5d] = ! purpose ( 
qualify+ ! loan1 %all be disclos$ to !  
prospective fran*isee borr[]4  #d4      
,def9itions ,= purposes ( ?is ,act1 !   

foll[+ def9itions apply3 7#a7 ,! t]m    
disclosure docum5t means ! disclosure   
/atem5t requir$ by ! ,f$]al ,trade      
,commission 9 ,trade ,regulation ,rule  
#dcf 7#af ,f$4 ,reg4 #dcf74  7#b7 ,!    
t]ms fran*ise1 fran*isee & fran*isor h !
 mean+s giv5 su* t]ms 9 section #dcf4a (
 title #af ( ! ,code ( ,f$]al           
,regulations z 9 effect on ,july #a1    
#bjjg4  #e4 ,sev]ability ,if any        
provision ( ?is ,act or any application 
( ?is ,act to any p]son or circum/ances 
is held invalid1 ! rema9d] ( ?is ,act & 
its application to any p]son or         
circum/ance %all n be affect$ !reby4