Committee on Small Business Holds Hearing on How Franchising Empowers Entrepreneurs to Start a Business

WASHINGTON, D.C. - Yesterday, Congressman Roger Williams (R-TX), Chairman of the House Committee on Small Business, held a hearing titled "Local Ownership, National Brands: How Franchising is a Pathway to Entrepreneurship" to examine how the franchise business model can be an affordable and accessible pathway to small business ownership.

"The franchise model empowers aspiring entrepreneurs, providing them with the tools they need to overcome the many challenges small businesses face," said Chairman Williams. "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."

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Watch the full hearing here.

Below are some key excerpts from today's hearing:

Chairman Williams: "Mr. Troutman, before you opened your first Tropical Smoothie, you had an entirely different career in the Navy-as you've talked about, and we've thanked you for that-and later as a cybersecurity defense contractor. I recently learned that veterans account for about 14 percent of all franchise owners today. So, could you share with us some lessons from your military experience that have helped shape your approach to running a successful franchise?" Mr. Troutman: "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: "Ms. Angie K, in your testimony, you describe how franchising allows stylists to move from employees to become independent business owners. What is it about the franchise model that makes that, sort of, upward mobility and the American Dream more accessible?" Ms. Katsanevas: "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." Rep. Van Duyne: "What is it about being a small owner that makes you want to give back to your community? Can you show some of the ways in which you've been able to do that?" Ms. Katsanevas: "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, and that's important to us that the service that we provide and giving back to our community is a representation of 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. It's about the relationships, and we want to continue to support them in return."

Rep. Downing: "The franchising business model is an important component of rural economies, including those in my home district of Central and Eastern Montana. Franchises help fill in service gaps. It helps create local jobs, boost tax revenues in areas where low population density can make sustaining a small business difficult…Through your experience operating Promise Hotels in Eastern Oklahoma, can you speak to the impact that your business has had on local employment and economic growth in the region?" Ms. Patel: "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 the 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."

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