Small Business Administration Franchise Loan Transparency Act of 2015

Small Business Administration Franchise Loan Transparency Act of 2015

This bill requires a franchisor, except one with a franchise in the lodging industry, to disclose in the required Federal Trade Commission disclosure document:

• the average first-year revenue for all franchise locations for each of the preceding five years of operation;
• the number of franchise locations that went out of business or were sold by the franchisee during the first year of operation for each such period; and
• the average revenues for all locations of the franchise for each such period, aggregated to show the top 25%, middle 50%, and the bottom 25% of revenue.

Any financial information relating to the performance of any franchise's location provided by the franchisor, or its representatives, to the lender for the purpose of qualifying the loan, must be disclosed to the prospective franchisee borrower.