1851

<a href="https://www.cortezmasto.senate.gov/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">U.S. Sen. Catherine Cortez Masto </a>of Nevada has released an <a href="https://www.cortezmasto.senate.gov/imo/media/doc/Franchise%20Report%20from%20the%20Office%20of%20Senator%20Cortez%20Masto.pdf?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">87-page report </a>on the franchise industry, outlining what she calls unfair and sometimes deceptive practices that can leave franchisees bankrupt and U.S. taxpayers covering the losses.Calling for greater oversight of the franchise industry from both the Federal Trade Commission and Small Business Administration, the Democratic Senator said inflated revenue projections, overcharges, misleading contracts and forced arbitration were among the most egregious practices.“Owning a franchise business can be a good opportunity for an eager entrepreneur,” Cortez Mastro told 1851 Franchise. “But for too long, some franchise corporations and lenders have been allowed to treat entrepreneurs unfairly, which cascades into low-wage employment and store closings. I am alarmed by these stories of small business owners in Nevada and across the country losing so much at the hands of deceptive and misleading corporations and lenders.”The report called out ten franchise brands for their deceptive practices —&nbsp;including <a href="https://burgerim.com/contact/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">Burgerim</a>, <a href="https://www.subway.com/en-us/ownafranchise?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">Subway</a>, <a href="https://franchise.dickeys.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">Dickey’s </a>and <a href="https://ownaquiznos.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">Quiznos</a> — while noting <a href="https://www.dunkinfranchising.com/franchisee/en.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">Dunkin’ </a>and <a href="https://www.popeyes.com/company?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">Popeyes</a> as franchises that worked for their franchisees.The Senator called for Congress to tighten laws surrounding disclosure requirements for franchise brands that seek federally-guaranteed loans, including Small Business Administration loans for “at-risk” franchises and to let franchisees sue franchisors for violations of franchise regulations.This isn’t the first time Cortez Mastro has voiced complaints about franchise practices. In April 2020, the Senator <a href="https://www.cortezmasto.senate.gov/news/press-releases/cortez-masto-urges-ftc-to-protect-franchisees-during-covid-19-pandemic?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">urged the Federal Trade Commission</a> to make changes to the Franchise Rule in response to the COVID-19 pandemic.&nbsp;In May 2019, Cortez Mastro <a href="https://www.cortezmasto.senate.gov/imo/media/doc/2019%20May%2022%20Cortez%20Masto%20SBA%20Franchise%20Issues.pdf?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">sent a letter to the Small Business Administration</a>,&nbsp;questioning the SBA’s practice of guaranteeing loans tied to “franchises with a history of complaints about unfair and deceptive practices.”And in July 2019, she <a href="https://www.cortezmasto.senate.gov/news/press-releases/cortez-masto-introduces-legislation-to-protect-prospective-franchise-owners-from-predatory-practices?utm_source=1851franchise.com&utm_medium=article&utm_campaign=senator-calls-for-ftc-sba-crackdown-on-franchising-2715484" target="_blank" rel="nofollow">introduced legislation</a> to protect entrepreneurs from bad actors in the franchise industry who use deceptive financial information to sell underperforming or unprofitable businesses.But under President Joe Biden’s Administration and a Democratic-controlled Congress, Cortez Mastro’s efforts to protect franchisee rights are more likely to succeed and arguably even more necessary.“The COVID-19 pandemic has increased the appeal of franchising for people looking for new opportunities after losing their job or business,” Cortez Mastro told 1851 Franchise. "I’m concerned that some entrepreneurs may decide to purchase a franchise at a 'discount' without being aware of the risks they are taking. “I’ll continue to introduce legislation to protect franchise owners. I hope this report and these stories encourage the franchise sector, the Biden Administration, and Congress to institute reforms to protect franchise owners.”

Senator Calls For FTC, SBA Crackdown on Franchising

1851 Franchise

A new report from U.S. Sen. Catherine Cortez Masto of Nevada alleges deceptive practices within the franchise industry that can leave owners and taxpayers facing huge losses.

senator-calls-for-ftc-sba-crackdown-on-franchising

ServiceMaster Restore

ServiceMaster Restore Powers Into the Second Half of 2025 With Growth and Purpose-Driven Impact

ServiceMaster Restore Powers Into the Second Half of 2025 With Strong Growth and Purpose-Driven Impact

servicemaster-restore-powers-into-the-second-half-of-2025-with-strong-growth-and-purpose-driven-impact

Comfort Keepers

Comfort Keepers - Midyear Press Release 2025 - 1851 Franchise

Comfort Keepers® Hits Mid-Year Stride With Strong Franchise Growth and Rising Demand for In-Home Care

comfort-keepers-franchise-midyear-momentum-2025

petbar

petbar - Garrett Dewan - Why I'm Investing - 1851 Franchise

Why Garrett Dewan Is Choosing To Reinvest in petbar

petbar-franchise-austin-garrett-dewan-multi-unit

Paris Baguette

NJBIZ: Paris Baguette Ramps Up Expansion With New Franchises, Facility and 2030 Growth Target

njbiz-paris-baguette-ramps-up-expansion-with-new-franchises-facility-and-2030-growth-target

Busy Bee Jumpers

Top 10 Reasons To Buy a Busy Bee Jumpers Franchise in 2025

top-10-reasons-to-buy-a-busy-bee-jumpers-franchise-in-2025

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Wendy's CEO Kirk Tanner Steps Down - Breaking News - 1851 Franchise

Wendy’s CEO Kirk Tanner Steps Down Amid Challenges, Leaving Franchisees Facing Uncertainty

wendys-ceo-transition-kirk-tanner-franchisee-uncertainty

"Come in, We're OPEN" sign against abstract background

Small Business Optimism Dips, Raising Concerns for Franchise Owners

small-business-optimism-dips-raising-concerns-for-franchise-owners

Photo of Roof Scientist truck and trailer

Roof Scientist Expands Into Northern Indianapolis as Entrepreneur Dale Speckman Launches New Business in Fishers

roof-scientist-expands-into-northern-indianapolis

Image of Donald Trump pointing with red stripes in the background

August 1 Tariff Deadline Is Said to Have ‘No Extensions’: What This Could Mean for Franchises

august-1-tariff-deadline-franchise-impact

What June’s Jobs Report Means for the Franchise Industry

what-junes-jobs-report-means-for-the-franchise-industry

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores - Agg - 1851 Franchise

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores

hooters-franchise-model-company-owned-closures

Technomic Releases Annual Ranking of the Top 15 Fast-Food Chains in the U.S.

technomic-releases-annual-ranking-of-the-top-15-fast-food-chains-in-the-us

The Ultimate Guide to Selling Franchises: How To Create a Strong Incentive

how-to-build-strong-incentives-to-attract-prospective-franchisees

Kansas Couple Revitalizes Local Childcare With Children’s Lighthouse

From Corporate Careers to Community Roots: Kansas Couple Revitalizes Local Childcare With Children’s Lighthouse

kansas-couple-opens-childrens-lighthouse-gardner-olathe

From Prescriptions to Pastries: Kari Khandelwal Creates a Comforting Community Bakery 

From Prescriptions to Pastries: Kari Khandelwal Creates a Comforting Community Bakery in Overland Park, Kansas

paris-baguette-franchise-overland-park-khandelwal

Hely and Hiral Patel Bring Their Longtime Dream to Life With The Brass Tap

Senator Calls For FTC, SBA Crackdown on Franchising

MORE STORIES LIKE THIS