The ranking minority member on the U.S. Senate Small Business Committee, Senator Catherine Cortez Masto (D-NV) filed legislation last week to protect entrepreneurs who are considering purchasing a franchise. The SBA Franchise Loan Transparency Act of 2019 (SB 2383) would require that before a lender could make a government-backed loan to a franchise, the franchisee must have accurate and complete revenue and store closing data from the franchisor. In fact, SB 2383 states that the franchisor must specifically provide the average and median first-year revenues for all franchises, and the number of a franchise business’ first-year failures – either through closing or transfer to another franchisee – as well as the average and median revenue for all businesses operated under the franchise. Furthermore, the act prohibits a franchisor from providing any information to/through a third party that conflicts with the financial information provided to prospective franchisees in disclosure documents. As the SBA 7(a) loan program is a self-funding program, each program loan that defaults yields higher fees and rates for the good loans in order to ensure program solvency. SB 2383 should help alleviate that problem.