IFA Issues Statement on Introduction of Damaging Franchise Business Guaranteed Loans Legislation

FOR IMMEDIATE RELEASE

Contact:

Matthew Haller, 202-662-0770

Jenna Weisbord, 202-662-0766

mhaller@franchise.org

jweisbord@franchise.org

@franchising411

IFA ISSUES STATEMENT ON INTRODUCTION OF DAMAGING FRANCHISE BUSINESS GUARANTEED LOANS LEGISLATION

WASHINGTON, July 24, 2015—International Franchise Association Executive Vice President of Government Relations & Public Policy has released the statement below following the introduction of The SBA Franchise Loan Disclosure Act 2015 by Representative Keith Ellison (D-Minn.), a harmful piece of legislation that would make it more difficult for small franchise business owners to obtain a SBA guaranteed loan.

“Rep. Ellison has introduced legislation that would unfairly burden franchise businesses, which continue to outpace growth of the overall U.S. economy. The Small Business Administration already has a thorough vetting system for new loans and the useless and expensive additional paperwork that Rep. Ellison’s bill would require of only franchise businesses will discourage their growth and job creation. Further, in 2007, the Federal Trade Commission, which oversees franchise businesses, reviewed the disclosures franchisors must make and determined no additional financial disclosures were necessary.

“In 2014 alone, new franchise businesses utilized approximately $6 billion in loan guarantees resulting in the financing of nearly 30,000 new franchised units. According to a survey conducted for IFA in 2014, 43 percent of first-time franchisees who borrowed funds from commercial lenders and 23 percent of franchisees acquiring additional franchises used SBA loan program guarantees. The Ellison bill, if enacted, would dry up SBA loans for franchising, cripple the U.S. economy, and crush a large portion of the economic job growth this post-recession economy has to offer.”

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About the International Franchise Association

Celebrating 55 years of excellence, education and advocacy, the International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising and the more than 780,000 franchise establishments that support nearly 8.9 million direct jobs, $890 billion of economic output for the U.S. economy and 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law, technology and business development.

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