The House Committee on Small Business convened a hearing to discuss the impact of franchising on entrepreneurship and local economies. The session, led by Chairman Roger Williams (R-TX), was titled “Local Ownership, National Brands: How Franchising is a Pathway to Entrepreneurship.” The hearing focused on how the franchise model can serve as an accessible entry point for aspiring small business owners.
Chairman Williams emphasized the supportive environment for new businesses, stating, “The franchise model empowers aspiring entrepreneurs, providing them with the tools they need to overcome the many challenges small businesses face. Because of the tax cuts, deregulation efforts, and pro-growth initiatives of the Working Families Tax Cuts, there has never been a better time to start and grow a business. This Committee will continue to promote policies that give more entrepreneurs the opportunity to achieve the American Dream.”
During the hearing, witnesses shared their personal experiences with franchising. Mr. Troutman described his transition from military service and defense contracting into franchise ownership: “Transitioning from the Navy, through contracting, into franchising was a—skills we learned in the military, were directly relatable to being in the franchise business. Standard operating procedures—which are common, of course, in the military—structured approaches to doing things and getting things done, training, and organizational formats align directly with franchising. It gave us a blueprint—if you will—on how to do it. I had no experience, obviously, in Tropical Smoothie or food, but there was a template. Even when I did the application, I said no to all the things they asked me, as far as food service, but I did check that I could serve and I can follow orders, and we can follow guidelines, templates, and systems.”
Rep. Van Duyne asked Ms. Angie Katsanevas about upward mobility within franchises for employees such as stylists moving toward business ownership. Ms. Katsanevas responded: “You said it earlier, it’s a tried-and-true model, and our team is set up for success. Our team—the majority of them—start with us and grow with us, and we have a very strong career path that is focused and gives them the opportunity to grow and stay with the company, stay within the family. And they are set up for success, so it also gives them the opportunity to have a path forward to ownership and to becoming an entrepreneur rather than staying stagnant over time. So we offer that growth and successful business plan for them.” She further discussed community involvement: “We’ve been involved in several causes in our community. We are deeply embedded in our community. We employ hundreds of stylists in our business, and through that we are giving back. The majority of our guests are local guests who are neighbors and friends. And the name on our door represents our family... For us our goal is to have a strong successful business model and continue to grow; however we can give back to causes and support everyone in our community... Our community supports us...”
Rep. Downing highlighted how franchises contribute to rural economies by filling service gaps where population density makes sustaining independent businesses difficult. He cited Central and Eastern Montana as examples before inviting Ms. Patel from Promise Hotels in Eastern Oklahoma to comment on economic impact: “Huge economic impact—besides acquiring hotels we also do ground up developments so we are creating taxes for our municipalities creating jobs... And whether I continue to own that hotel or not those will continue to be paying dividends off: tax dollars to the federal government,to county,the city,the sales,and then payroll taxes.And it will continue to keep employees employed there long after I'm gone.We feel like we are stewards of the community and play a role in making sure our cities continue to thrive.”
The committee continues its work reviewing policies affecting small businesses nationwide.
