A Small Part in a Big Company: Examining the Power of Franchising in the American Economy (House Small Business Committee hearing, May 15, 2025)
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The printed transcript of a hearing titled A Small Part in a Big Company: Examining the Power of Franchising in the American Economy, conducted May 15, 2025 before the House Committee on Small Business, 119th Congress (Small Business Committee Document Number 119–011). Opening statements are by Chairman Roger Williams and Ranking Member Nydia Velázquez. The witnesses are Randy Cross of Fish Window Cleaning, Grandville, MI; Craig Wright of Aqua-tots Swim School, Mesa, AZ; Jennifer Beaudoin, a Buffalo Wild Wings franchisee in Stephens City, VA; and Gary Kalman of Transparency International US. The transcript includes their prepared statements and additional material from the Office of Management and Budget, the Fact Coalition, the National District Attorneys Association and law enforcement groups.
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“A Small Part in a Big Company: Examining the Power of Franchising in the American Economy (House Small Business Committee hearing, May 15, 2025).”
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A SMALL PART IN A BIG COMPANY: EXAMINING
THE POWER OF FRANCHISING IN THE
AMERICAN ECONOMY
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
HEARING HELD
MAY 15, 2025
Small Business Committee Document Number 119–011
Available via the GPO Website: www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
60–425 WASHINGTON : 2025
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HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
JAKE ELLZEY, Texas
MARK ALFORD, Missouri
NICK LALOTA, New York
BRAD FINSTAD, Minnesota
TONY WIED, Wisconsin
ROB BRESNAHAN, Pennsylvania
BRIAN JACK, Georgia
TROY DOWNING, Montana
KIMBERLYN KING-HINDS, Northern Marina Islands
DEREK SCHMIDT, Kansas
JIMMY PATRONIS, Florida
NYDIA VELÁZQUEZ, New York, Ranking Member
MORGAN MCGARVEY, Kentucky
HILLARY SCHOLTEN, Michigan
LAMONICA MCIVER, New Jersey
GIL CISNEROS, California
KELLY MORRISON, Minnesota
GEORGE LATIMER, New York
DEREK TRAN, California
LATEEFAH SIMON, California
JOHNNY OLSZEWSKI, Maryland
HERB CONAWAY, New Jersey
MAGGIE GOODLANDER, New Hampshire
LAUREN HOLMES, Majority Staff Director
MELISSA JUNG, Minority Staff Director
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CONTENTS
OPENING STATEMENTS
Page
Hon. Roger Williams ................................................................................................ 1
Hon. Nydia Velázquez ............................................................................................. 2
WITNESSES
Mr. Randy Cross, Franchise Owner, Fish Window Cleaning, Grandville, MI ... 5
Mr. Craig Wright, Chief Executive Officer, Aqua-tots Swim School, Mesa,
AZ .......................................................................................................................... 6
Ms. Jennifer Beaudoin, Franchisee, Buffalo Wild Wings, Stephens City, VA .... 8
Mr. Gary Kalman, Executive Director, Transparency International US, Wash-
ington, DC ............................................................................................................. 9
APPENDIX
Prepared Statements:
Mr. Randy Cross, Franchise Owner, Fish Window Cleaning, Grandville,
MI ................................................................................................................... 39
Mr. Craig Wright, Chief Executive Officer, Aqua-tots Swim School, Mesa,
AZ ................................................................................................................... 44
Ms. Jennifer Beaudoin, Franchisee, Buffalo Wild Wings, Stephens City,
VA ................................................................................................................... 52
Mr. Gary Kalman, Executive Director, Transparency International US,
Washington, DC ............................................................................................ 58
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Executive Office of the President Office of Management and Budget ......... 70
Fact Coalition Briefing Memo ......................................................................... 71
Fact Coalition .................................................................................................... 79
National District Attorneys Association (NDAA) ........................................... 83
National Fraternal Order of Police (FOP) ...................................................... 84
National Narcotic Officer’s Associations’ Coalition (NNOAC) ...................... 86
Trump Tariffs ................................................................................................... 87
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A SMALL PART IN A BIG COMPANY:
EXAMINING THE POWER OF FRANCHISING
IN THE AMERICAN ECONOMY
THURSDAY, MAY 15, 2025
HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
Washington, DC.
The Committee met, pursuant to call, at 10:00 a.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams [chair-
man of the Committee] presiding.
Present: Representatives Williams, Meuser, Ellzey, Alford,
Finstad, Wied, Jack, Downing, Schmidt, Patronis, Velázquez,
McGarvey, Scholten, McIver, Cisneros, Tran, Simon, Olszewski,
Conaway, and Goodlander.
Chairman WILLIAMS. Okay, good morning. And before we get
started, I want to recognize Congressman Patronis from the great
state of Florida to lead us in the pledge and prayer.
Good morning, everyone. And I will now call the Committee on
Small Business to order. Without objection, the Chair is authorized
to declare a recess of the Committee at any time.
I now recognize myself for my opening statement.
Welcome to today’s hearing, ‘‘A Small Part in a Big Company:
Examining the Power in Franchising in the American Economy.’’ In
today’s hearing, we will hear from franchisors and franchisees on
all aspects of the franchise business model. We will focus on how
we in Congress can protect this model to ensure generations of
Americans have a chance to achieve the American dream.
Franchises operate in every corner of America. My family has
been a part of the franchise model for over 80 years in the car busi-
ness. I have seen firsthand the benefits to consumers, manufactur-
ers in local communities, and, most importantly, individual citizens
and people in the community. Whether you are in a small town or
a big city, you are likely to encounter locally owned franchises that
support and drive the local economy.
Across the United States, there are an estimated 831,000 fran-
chise businesses employing nearly 9 million workers. These fran-
chise establishments generate close to $900 billion in economic out-
put, which is roughly 3 percent of the U.S. GDP. When the fran-
chises thrive, the American economy thrives.
Unfortunately, the franchise business model came under attack
under the prior administration. The Biden Harris National Labor
Relations Board, the NLRB, issued its disastrous Joint Employer
ruling, which threatened to upend the franchise business model.
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Congress fought this misguided attack on a bipartisan basis, only
to be met with Biden’s veto. If the courts had not struck down this
Joint Employer Rule, franchises would have incurred an estimated
$33 billion in additional costs each year.
Franchises face yet another uphill battle as Democrats are fight-
ing tooth and nail to oppose extending President Trump’s pro small
business Tax Cuts and Jobs Act. Failing to extend the TCJA will
result in the greatest tax hike on the American people in its his-
tory. Rather than being undermined through excessive regulation
and being subject to Democrat tax hikes, the franchise business
model should be supported. This model offers small business own-
ers access to resources and tools to assist with many challenges
and make the dream of becoming a business owner more attainable
and also reliable.
It is an honor to work alongside my colleagues and President
Trump to create commonsense policies that uplift our nation’s
small businesses through deregulation, lower taxes, and greater ac-
cess to capital. I would like to thank the witnesses to participate
in this important hearing. We look forward to your testimony.
Now with that, I want to yield to my friend and distinguished
Member, Ranking Member from New York, Ms. Velázquez, for her
opening remarks.
Ms. VELÁZQUEZ. Thank you, Mr. Chairman. Today’s hearing on
the franchise business model gave us the opportunity to assess the
issues franchises and other small businesses face in today’s econ-
omy, so let me give you the facts.
President Trump’s economic on-and-off again economic policies
are setting off alarm bells. Americans are becoming increasingly
worried about the health and future of our economy. Recent eco-
nomic data showed that our economy shrank by 0.3 percent in the
first quarter as the President’s policies created significant uncer-
tainty. Growth in consumer spending slowed considerably, with
GDP down from the 2.4 percent growth the economy experienced
in the fourth quarter of 2024.
Despite lowering costs on day one, prices remain high. GDP data
released at the end of April confirmed that prices are climbing as
consumer inflation jumped 3.6 percent in the first quarter and core
inflation rose 3.5 percent. When combined with a generally weak-
ening economy, the uncertainty and higher costs caused by the
President’s tariff policies are beginning to force franchises and
other small business owners to make difficult choices. Thirty per-
cent of small business owners indicated in March that they plan to
increase prices, the highest amount reported over the last year.
Employment of small employers declined by 3 percent since Presi-
dent Trump took office, and 5 out of 12 federal reserve districts re-
cently reported weakening manufacturing activity.
Perhaps worse, small businesses report that they anticipate
these challenges to grow and forecasters from across the spectrum
are increasingly concerned about the chances of an economic reces-
sion. J.P. Morgan now places the odds of a U.S. and global reces-
sion at 60 percent and directly attributes that forecast to President
Trump’s tariff policy. Again, these are the facts.
Combined with the Trump administration’s decision not to en-
force the beneficial ownership reporting requirements under the
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Corporate Transparency Act, the American economy is left in a
particularly vulnerable state. Passed in 2021 with wide bipartisan
support from a broad array of stakeholders, including from Presi-
dent Trump, the CTA requires the Treasury Department to develop
and maintain a registry of the real beneficial owners of established
businesses in order to crack down on the use of anonymous shell
companies in the U.S.
Mr. Chairman, I would like to include for the record a statement
of administration policy from the Trump administration supporting
passage of the CTA in 2019; a letter signed by the National District
Attorneys Association, the National Narcotic Officers Association,
and a list of 583 law enforcement, business, human rights, national
security, and other experts supporting passage of the CTA.
Chairman WILLIAMS. So moved.
Ms. VELÁZQUEZ. While there is no doubt that there were prob-
lems with FinCEN’s rollout, establishment of the registry, and edu-
cation to small businesses of their reporting obligation, that is not
justification for not enforcing the statute. I will soon be leading
other House and Senate Democrats in introducing legislation to im-
prove the BOI reporting process for small businesses, and I encour-
age anyone who is interested to join me in this effort. The CTA is
the law of the land and must be enforced.
Franchises and other small businesses are especially vulnerable
to tariffs and economic uncertainty, and the Trump administra-
tion’s decision not to enforce the CTA expanding the use of anony-
mous shell companies, which harms fair competition for legitimate
small businesses looking to compete in the marketplace. I look for-
ward to exploring all of these and other issues here this morning.
Thank you. I yield back.
Chairman WILLIAMS. The gentlelady yields back. And we will
now move to witness introductions.
I recognize my colleague, Representative Scholten from the great
state of Michigan, to briefly introduce her constituent who is testi-
fying before the committee today.
Ms. SCHOLTEN. Thank you so much, Mr. Chairman. I really ap-
preciate the spirit of bipartisanship that dominates this committee
and the opportunity to introduce my constituent here today.
I am so pleased to introduce Mr. Randy Cross, the president of
Fish Window Cleaning. Mr. Cross is a constituent of mine. We en-
joyed a great conversation over at Fish Window Cleaning just a few
weeks ago, and my boys are very interested in getting into the
squeegee business at some point in the future. I have to say, they
re very fascinated. Thank you for your hospitality.
After opening his first Fish Window Cleaning franchise location
in 2003, Mr. Cross has gained years of experience in the fran-
chising world. He is now both a franchisor and a franchisee, pro-
viding a unique perspective on the ins and outs of this business
model. As Co-Chair of the Franchise Caucus myself, I look forward
to hearing from Mr. Cross on how Congress can do more to help
entrepreneurs like him build up their businesses and, by extension,
our nation’s economy.
Thank you. I yield back.
Chairman WILLIAMS. The lady yields back.
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Our next witness here with us today is Mr. Craig Wright. Mr.
Wright is the chief executive officer of AquaTots Swim School in
Phoenix, Arizona. Mr. Wright has over 30 years of executive leader-
ship experience and joined AquaTots Swim School in 2017. Prior to
that, he served in multiple positions for Leslie’s Pool Supplies and
as senior vice president for Millard Refrigerated Services. He
worked his way up in his career, starting as a box boy at Buttrey
Food and Drug, all the way up to vice president of distribution,
merchandising, and support. Mr. Wright graduated from Montana
State University in Billings.
I want to thank you for being here today and thank you for tak-
ing the time to bring your family with you, too.
Our next witness here with us today is Ms. Jennifer Beaudoin.
Did I say that right, Jennifer? Ms. Beaudoin is a franchise owner
of multiple Buffalo Wild Wings locations in West Virginia and Vir-
ginia. Ms. Beaudoin has been a Buffalo Wild Wings franchisee for
more than 25 years, founding her first restaurant with her family
in 1999. Ms. Beaudoin serves as Vice Chair of the Franchise Busi-
ness Services Board of Directors and is a co-owner of Black Rock
Bar and Grill. She is a graduate of West Virginia University.
And thank you for joining us today. I am looking forward to
hearing your conversation.
I now recognize the Ranking Member from New York, Ms.
Velázquez, to briefly introduce our last witness appearing before us
today.
Ms. VELÁZQUEZ. Thank you, Mr. Chairman.
I would like to introduce Mr. Gary Kalman, Executive Director
of Transparency International, U.S. In this role, he oversees the or-
ganization’s U.S. operations, focusing on illicit finance and the U.S.
role in global anti-corruption efforts. He was a founding member of
the Financial Accountability and Corporate Transparency, FACT,
Coalition, a nonpartisan alliance promoting policies to combat the
harmful impacts of corrupt financial practices and served as Execu-
tive Director from 2016 to 2019. He is currently an Advisory Coun-
cil Member for the International Coalition Against Illicit Econo-
mists.
Mr. Kalman, it is nice to see you again. Welcome back to the
Committee. Thank you.
Chairman WILLIAMS. The lady yields back. And so thank again
all of you for being here.
Now, before recognizing the witnesses, I would like to remind
them that their oral testimony is restricted to 5 minutes in length,
and we do stick with that. If you see the light turn red in front
of you, it is over with. Okay. It means your 5 minutes have con-
cluded and you should wrap up your testimony. If you continue to
go, you will hear this, reminding you that you need to stop.
I now recognize Mr. Cross for his 5-minute opening remarks.
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STATEMENTS OF RANDY CROSS, FRANCHISE OWNER, FISH
WINDOW CLEANING; CRAIG WRIGHT, CHIEF EXECUTIVE OF-
FICER, AQUA-TOTS SWIM SCHOOL; JENNIFER BEAUDOIN,
FRANCHISEE, BUFFALO WILD WINGS; AND GARY KALMAN,
EXECUTIVE DIRECTOR, TRANSPARENCY INTERNATIONAL US
STATEMENT OF RANDY CROSS, FRANCHISE OWNER, FISH
WINDOW CLEANING
Mr. CROSS. First of all, thank you to my congresswoman, Hil-
lary Scholten, for the introduction. And thank you, Chairman Wil-
liams, Ranking Member Velázquez, and distinguished Members of
the committee for inviting me here today. My name is Randy Cross
and I am the president of Fish Window Cleaning, which is the na-
tion’s premier window cleaning service with more than 275 fran-
chise locations nationwide. It is a unique privilege to appear before
you today alongside our fellow franchise business leaders to talk
about this incredible all American business model of franchising.
Mr. Chairman, as a franchisor, it is my honor to help aspiring
entrepreneurs open and operate their own window cleaning busi-
ness. But perhaps more importantly, I am also a franchisee in
Grand Rapids, Michigan, and I opened the second Fish Window
Cleaning location back in 2003. Today, I proudly employ 31 em-
ployees at my Fish franchise.
I appear before you today on behalf of the International Fran-
chise Association, where I also serve on the Board of Directors. To-
day’s hearing is a great opportunity to highlight the power of fran-
chising, a business model that supports nearly 9 million jobs at
831,000 establishments in America, contributing a staggering $897
billion to our economy. Franchising is perhaps the most important
business growth strategy in American history.
Mr. Chairman and friends of the committee, my message today
is this: franchising is small business. When you see in your commu-
nities a Fish Window Cleaning business, an AquaTots Swim
School, or a Buffalo Wild Wings restaurant, what you are looking
at is small business. The vast majority of our franchisees in the
country are like me, and they operate a tiny enterprise. Over 80
percent of franchise owners own and operate just a single location.
And for all the benefits of operating under that established brand,
franchisees pay an average of 6 percent royalty to a brand to sell
that brand’s products or services. This means franchisees retain an
average of 94 percent of their business revenue.
So now that you understand most franchisees are very small, you
also need to understand that the vast majority of franchisors are
also very small enterprises. The majority of the nearly 3,500 fran-
chise brands in operation today have less than 20 franchise units
in their system. So franchising truly is a small business.
And because we are a small business, we are far more affected
by the government policies than multinational corporations are.
The franchise community is very pleased that Congress is advanc-
ing tax policy that allows small businesses to flourish. Specifically,
we are excited that the House Ways and Means Committee is ad-
vancing a bill to extend, increase, and make permanent the Section
199A deduction for passthrough businesses. This benefit will pro-
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vide monumental certainty to small business franchisees and
franchisors.
Franchise business people are also very pleased about the exten-
sion of the bonus depreciation and estate tax provisions from the
2017 tax laws. These two policies, respectively, will allow busi-
nesses to immediately write off 100 percent of the cost of capital
investments and prevent an unimaginable burden to a family in
the event of a death of a franchise owner.
Another policy I would like to discuss is the unnecessary impact
of the Corporate Transparency Act enacted by Congress in 2021.
The CTA would require the smallest franchisees in America to re-
port sensitive and personal information to the federal government.
And while I certainly support the goal of reducing illicit activity,
it is rare that policymakers pass a regulation that only affects the
smallest businesses who are least able to understand how to com-
ply. The IFA was pleased that the Treasury Department will not
enforce that law, and we support a full repeal of the Corporate
Transparency Act.
Last but not least, the most important action Congress can ever
take to pave a clear future for franchise small businesses is to fi-
nally write a commonsense law for what constitutes a joint em-
ployer. While franchise businesses are predominantly small, they
are also independent businesses. And franchisees like me want to
stay independent forever. That is why we entered into this line of
work.
Last year’s expansive joint employer standard made no sense for
the franchisor-franchisee relationship, and we can all be relieved
that the IFA defeated that rule in court. The court defeat came
after Congress also rejected the rule on a bipartisan basis last year
through a Congressional Review Act resolution that passed both
the House and the Senate last year. This year, Congress still has
an opportunity to pass legislation, like the Save Local Business
Act, to provide economic safety and security for franchise business
families everywhere.
Mr. Chairman, I cannot thank you enough for the invitation to
appear at this hearing on franchising and I look forward to our dis-
cussion.
Chairman WILLIAMS. Thank you very much.
I now recognize Mr. Craig Wright. You can swim, can’t you?
Mr. WRIGHT. I can swim. I can swim, yes.
Chairman WILLIAMS. I now recognize Mr. Craig Wright for his
5-minute opening remarks.
STATEMENT OF CRAIG WRIGHT, CEO, AQUATOTS SWIM
SCHOOL
Mr. WRIGHT. Thank you. Good morning, Chairman Williams,
Ranking Member Velázquez, and distinguished Members of the
committee. My name is Craig Wright and I am the CEO for
AquaTots Swim Schools, a franchise based in Mesa, Arizona.
AquaTots Swim Schools is a family-owned business that began in
1991 with a simple goal: to make quality swim lessons accessible,
safe, and convenient for families. What started as a single lesson
taught by a teenage lifeguard in Tempe, Arizona, has grown into
one of the world’s largest swim school franchises. Initially oper-
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ating in backyard and hotel pools, AquaTots pioneered one of Arizo-
na’s first indoor year-round facilities. The success of this business
laid the concept and foundation for the brand’s expansion under
the franchise model.
In 2007, AquaTots launched its first franchise. Today, AquaTots
is in over 170 locations, 14 countries. We have taught over 47 mil-
lion swim lessons to 2-1/2 million children worldwide. The majority
of our 75 franchise owner groups are made up of first-time business
owners and families who are passionate about water safety and
childhood development. Since 2017, I have had the privilege of
leading AquaTots as the CEO. It is an honor to be here today and
give my perspective on the impact of franchising in its hundreds
and thousands of small businesses.
At its core, franchising is about the relationship between the
franchisor and the franchisees, specifically how the franchisor sup-
ports its franchisees and how the franchisees meet their obligations
to deliver products and services in accordance with the system’s
brand standards. A franchise relationship is a long-term relation-
ship that spans a decade and in many cases more than 20 or 30
years. These long-term relationships only work when the parties
can trust that the relationship and expectation each party has of
the other will remain stable.
While the franchisor provides the brand and the operating sys-
tem and the training and the ongoing support, the franchisee is the
one on the front lines making the daily operational decisions, man-
aging their team, and building relationships with their customers.
We see our franchisees as partners who bring the brand to life in
their unique local markets. Their success is our success and that
success is built on the foundation of their individual small busi-
ness.
The collective network of a franchise brand can be substantial,
comprised of hundreds if not thousands, thousands of individual
small business owners. These entrepreneurs are the backbone of
the franchise model and significantly contribute to their local
economies. As franchisors, we are proud to empower these individ-
uals to achieve their dreams of business ownership and witness the
positive impact they have every single day.
When franchising is mistakenly painted with a broad big busi-
ness brush, it can lead to misguided policies and regulations. Legis-
lation aimed at large corporations can inadvertently harm the
small business owner, hindering their ability to grow, create jobs,
and serve their communities. To that end, I would like to highlight
an issue that has clouded the franchise community for decades, no-
tably the ever changing joint employer standard.
Franchise businesses have faced four different definitions of the
joint employer standard over the past decade and while there is re-
prieve from previous NLRB’s Joint Employer Rule, I want to stress
the importance that the current commonsense standard in federal
labor law has on franchise businesses like AquaTots, and state that
any action to towards permanently preserving the current NLRB
rule would not only protect both businesses and workers, but also
create the regulatory conditions that would allow both franchisors
and franchisees to thrive, grow, create jobs, and serve in the oppor-
tunities in their local communities.
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Lastly, the SBA plays a critical role in the franchising success.
The SBA and the access to capital that its lending programs pro-
vide are an instrumental part of the franchise success story. His-
torically, franchises have represented about 20 percent of the bil-
lions of dollars in SBA loans. On April 25, we welcomed the SBA’s
news that it would be reinstating the Franchise Directory. This di-
rectory which was, unfortunately, eliminated in 2023, is an essen-
tial and centralized tool for lenders to access SBA loan eligibility
and financing for franchisees. It also serves as a beneficial tool for
prospective franchises and as they evaluate franchise opportunities.
I appreciate the attention that this committee has to this issue
given the critical importance of SBA lending to new franchisees. I
also appreciate your efforts to once again make the Franchise Di-
rectory available to both banks and borrowers.
Mr. Chairman and distinguished Members of the Committee,
thank you again for the opportunity to testify. I am happy to an-
swer any questions you might have.
Chairman WILLIAMS. Thank you. The gentleman yields back.
I now recognize Jennifer Beaudoin for her 5-minute opening re-
marks.
STATEMENT OF JENNIFER BEAUDOIN, FRANCHISEE, BUFFALO
WILD WINGS
Ms. BEAUDOIN. Good morning, Chair Williams, Ranking Mem-
ber Velázquez, and distinguished Members of the committee. My
name is Jenny Beaudoin and I am a proud small business owner.
I operate four Buffalo Wild Wings restaurants, three in Virginia
and one in West Virginia, as well as a steakhouse in Maryland.
My story, like that of many small business owners, is a personal
one. I literally grew up in a rest the restaurant my parents owned.
We lived in the apartment above it. I saw firsthand the long hours,
the financial risks, and the sheer grit it takes to make a small
business succeed. There were no days off, no paid vacations, and
every dollar earned was victory. That experience shaped my under-
standing of entrepreneurship and instilled in me a deep apprecia-
tion for the challenges and rewards of owning a business. I learned
that being a small business owner isn’t just about making a profit.
It is about being part of a community, providing for your family
and creating opportunities for others.
When I was in college, my father, a seasoned restaurant owner,
was looking to expand, but he wasn’t sure how to do it. He was
hesitant to take on more debt and replicate the challenges of start-
ing from scratch. That is when I suggested franchising. I remember
inviting him to a local Buffalo Wild Wings near my college campus.
He was struck by the vibrant atmosphere, the loyal customer base,
and the efficient systems. He saw a model that offered a potential
for growth with a proven framework. In fact, he was so impressed
that he called the number on the back of the menu to inquire about
franchise opportunities. That decision changed our lives. We be-
came part of the Buffalo Wild Wings brand 26 years ago. We were
the 97th location and I opened my first franchise 24 years ago.
Over the years, I have expanded my operations, always rein-
vesting in my business and my people. And now I am incredibly
proud to say that my daughter has recently graduated from James
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Madison University and is preparing to join our family business.
She also got engaged yesterday. Impressively, not uncommon in the
franchising industry, she represents the third generation of our
family dedicated to serving our communities, creating jobs, and
building a legacy.
This personal history is important because it highlights a funda-
mental truth. Franchisees are small business owners. We are not
simply managers of corporate stores. We are entrepreneurs who in-
vest our own capital, take on significant financial risk, and are
deeply committed to our local communities. The franchise model of-
fers a unique opportunity for individuals to achieve the American
Dream of business ownership. It combines the support and brand
recognition of a larger entity with the entrepreneurial drive and
local knowledge of individual owners. It is a model that has proven
to be a powerful engine for economic growth and job creation.
However, it is crucial that policymakers understand the realities
of franchising and recognize that franchisees are in fact small busi-
ness owners. Policies that treat franchisees as large corporations or
employees of the franchisor can have unintended consequences,
harming the very small businesses that this committee is intended
to support.
To that end, some of the governmental policies that help my
business and others like it thrive include: a clear and consistent
joint employer standard that protects my business from the
franchisor’s legal liability affirming that I am, in fact, a business
owner and not solely a manager of my restaurants. A strong, quali-
fied business income deduction 199A that allows me to free up cap-
ital to reinvest in my restaurants and team members. One hundred
percent bonus depreciation of assets that allowed me to recently re-
model two locations and which allows me to pay my equipment
suppliers upon delivery like they expect. Interest deductibility
based on EBITDA, not just EBIT 163(j), that allows me and my fel-
low franchisees to secure access to capital to expand our busi-
nesses, which I hope to do soon by building two more restaurants
with my family.
I appear today on behalf of myself as a franchise owner of Buf-
falo Wild Wings through S&J Enterprises LLC. I also appear as
Vice Chair of the Association of Buffalo Wild Wings Franchisees,
the Buffalo Wild Wings Franchise Business Services. I am grateful
for the opportunity to share my story and advocate for pro-fran-
chising policies for me, my daughter, and for countless other fran-
chise owners in the U.S. supporting their communities and their
families and their dreams.
Thank you for your time and attention. I would be happy to an-
swer any questions that you have.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Gary Kalman for his 5-minute opening re-
marks.
STATEMENT OF GARY KALMAN, EXECUTIVE DIRECTOR,
TRANSPARENCY INTERNATIONAL U.S.
Mr. KALMAN. Thank you. Chairman Williams, Ranking Member
Velázquez, and distinguished Members of the Committee, thank
you for inviting me to testify today, on behalf of Transparency
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International U.S., I appreciate the opportunity to discuss the crit-
ical role of the Corporate Transparency Act in providing law en-
forcement with necessary tools to do their jobs and keep us safe.
I also hope to share how this law benefits small business and to
help dispel some of the unfortunate misconceptions that have sur-
faced.
When I testified before this Committee last spring, I offered more
than a dozen examples in my written testimony in which anony-
mous companies were used to cover up the laundering of proceeds
of drug trafficking, human trafficking, sanctions evasion, counter-
feiting operations, and scams that harm small businesses, includ-
ing stolen contracts and disruptions to supply chains. The current
administration has made clear its prioritization of disrupting, even
dismantling, drug cartels and transnational criminal organizations.
Any suspension of enforcement or weakening of our anti-money
laundering rules undermines their ability to deliver on that prom-
ise.
Since then, studies and investigations with new and previously
underreported evidence continue to surface. Consider that a new
April 2025 GAO study found that fraud is a significant and per-
sistent problem in federal procurement practices and that some of
this fraud is perpetuated by companies obscuring beneficial owner-
ship information when they compete for contracts and apply for
federal benefits. The GAO detailed several examples, including
anonymous companies implicated in the diversion of contracts for
small businesses and for veterans-owned businesses that were oth-
erwise ineligible for those contracts.
The effective implementation of the CTA is also integral to the
President’s tariffs plans. Whether one supports or opposes tariffs,
we should all be able to agree that additional uncertainties in sup-
ply chain integrity and price variability created by tariff-dodging
via anonymous shell companies is harmful to small businesses al-
ready trying to navigate the policy change. The Financial Times re-
cently reported that Chinese logistics managers told Asian media
last month that they were creating shell companies to evade the
tariffs.
The FT also reported that Customs and Border Protection said
that enforcement will include the most severe penalties permitted
by law. While the intention is no doubt genuine, they cannot pros-
ecute what they cannot find. Without the CTA, this tariff dodge
creates gaps for law enforcement and raises serious questions for
small businesses about their role in undermining federal tax policy.
Since this week is Police Week and tens of thousands of officers
and their families are in D.C., it seems fitting to mention the
strong support for the CTA from police associations and law en-
forcement officials in all levels of government. I would also add
that prior to the House vote, the first Trump administration issued,
as the Ranking Member suggested, a Statement of Administrative
Policy that said the CTA would assist law enforcement in detecting
and preventing illicit activities, such as terrorist financing and
money laundering.
On March 21st, the Treasury Department issued an interim final
rule that narrows the scope of the law to apply only to certain for-
eign companies that register to do business in the United States.
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The exemption for domestic companies from the CTA is not con-
sistent with a risk-based approach to countering financial crime.
We strongly urge the Treasury Department to return the scope to
the intent of Congress and provide law enforcement with the tools
necessary to protect Americans from both foreign and domestic
threats. The current rule does neither.
Small business trade associations we spoke with seem to agree
that compliance is not actually a major concern for their members.
Small Business Majority wrote that small businesses across Amer-
ica are grappling with the impact of tariffs and cuts to vital pro-
grams supporting entrepreneurial innovation. Enforcement of this
law is quite simply not close to a major concern for the main street
small business owners with whom we are in contact every day. I
would suggest that there seems to be a disconnect between K
Street and main street on the top challenges facing America’s en-
trepreneurs.
Finally, we recognize that there are improvements to the imple-
mentation that could be made. We have suggested FinCEN sim-
plify the reporting form for the smallest businesses and adopt in-
stant verification to reduce filing times and improve data quality.
And Congress should provide these financial police with the re-
sources to make these changes and expand outreach and education
to small businesses.
Thank you for the opportunity to present this testimony and I
look forward to answering your questions.
Chairman WILLIAMS. The gentleman yields back.
And before we get started, just as a reminder, you may see some
Members coming and going and back and forth. It is not because
they are mad at anybody or whatever. Lots of times there are other
hearings going on. So you will see possibly me and the Ranking
Member will have to get up and come back. So be aware of that.
I now recognize myself for 5 minutes.
Mr. Cross, you began your career as a franchisee in 2003 and
transitioned to the corporate structure of Fish Window Cleaning in
2008, as you said. And this experience provides you with a unique
perspective from both the franchisee and the franchisor side, be-
cause there is a big difference. So how has your experience as a
franchisee impacted your thoughts and decision making as a
franchisor?
Mr. CROSS. Thank you, Congressman. I would say that I live
and breathe the business each and every day. And as a franchisee
myself, I am blessed to help lead the corporation. So my overall an-
swer is I know what it takes to be a successful small business in
this country and a franchise owner out of West Michigan. So just
what we want to do is support our franchisees in any way possible.
And I know we keep coming back to this joint employer. That is
why I am here today. That is what is on my heart is this joint em-
ployer issue. These regulations are getting in the way of my ability
as a franchisor to be able to support our franchisees. We would like
to do more. I should have brought two hats. One as a franchisee
and one as a franchisor. Sometimes it is difficult, but as a
franchisee, I want as much support as possible from the franchise
headquarters’ offices. And as a franchisor, I want to provide as
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much support to our franchisees. They send royalty dollars our way
and they expect and demand support for them.
So I am here to hopefully clear up this issue so we can get back
to just providing window cleaning services to our great customers
all across the country.
Chairman WILLIAMS. Thank you. Mr. Wright, one benefit to
owning a franchise is that it provides a means for ambitious entre-
preneurs to enter into business ownership with structure and a de-
veloped business model. At the same time, laws and regulations,
such as the Franchise Act and the Joint Employer Rule, place limi-
tations on the relationship between franchisees and franchisors. So
how do you currently work with your franchisees to help them de-
velop and be successful?
Mr. WRIGHT. Oh, that is a great question. That is really what
we do every day. It is the core of what I do and my team does. And,
you know, a lot of times we are using the word ‘‘communication,’’
like back and forth, and that is not what we want to do. We want
to build community, we want to build relationships with our fran-
chise owners.
And it is a formal process where we have monthly calls, we have
roundtables, we have owners forums. And it is a process where my
team, on a weekly, on a monthly basis, has specific schools that
they are calling and working with and communicating to. We also
have a Franchise Advisory Council made up of nine franchise own-
ers where we talk about operations, training, and marketing. Be-
cause it is really important to us that the processes that we are
putting in place, the new technology that we have, all aligns with
what is in the best interest of our franchise owners.
Chairman WILLIAMS. As a car dealer and franchise owner my-
self, I have noticed there is a misconception that franchisees are
just extensions of the franchisor, and certainly not in my business.
And when people see a Chrysler, Dodge, Jeep, or Ram dealership,
they often think it is owned and operated by Chrysler. This
couldn’t be further from the truth. In fact, back in the 1930s, my
father, Jack Williams, started a car dealership that is still in the
family today, fourth generation. And our dealership is active in our
communities. We support local charities, first responders and more.
And simply put, our business operates just as any other nonfran-
chise business.
So, Ms. Beaudoin, could you please tell us how your business
positively impacts the community that you serve in West Virginia
and Virginia?
Ms. BEAUDOIN. Yes, sir. We are honored that we are the place
that people come to when they need something, whether it is a
meal for a football team before a game or if it is—we took wings
this week to the police, local police force just as a thank you. We
make ourselves visible in the community as much as possible. We
recently had sponsored a community day within our locations
where each location got to pick a charity that was on their heart,
anywhere from a local animal shelter to the Boys and Girls Club.
And we paid our team to go and actually volunteer at those loca-
tions. So we really do pride ourselves and we are the place that
people come to after their Little League games or just to celebrate
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whatever it is that is going on in their lives. And we value the op-
portunity to do that.
Chairman WILLIAMS. And you are also the first one to get to
work and the last one to leave, right?
Ms. BEAUDOIN. Absolutely. My team works harder than any-
body I know, especially during COVID. That was a time where we
really shined within our communities and gave people a respite
and a place to come and relax.
Chairman WILLIAMS. And sometimes the last to get paid.
Ms. BEAUDOIN. Yeah, yeah, for sure.
Chairman WILLIAMS. Right? That is the way it works.
Ms. BEAUDOIN. Yeah. The franchisee definitely is last to get
paid.
Chairman WILLIAMS. So quickly, in the time remaining, what
are your future plans for the future of your business?
Ms. BEAUDOIN. We are hoping to expand two more locations.
We are looking at two locations in Virginia that we are hoping to
expand.
Chairman WILLIAMS. Okay. I yield back.
I now recognize the Ranking Member for 5 minutes of questions.
Ms. VELÁZQUEZ. Thank you, Mr. Chairman.
Mr. Kalman, shortly after the Trump administration announced
the Treasury Department will not enforce the legally mandated
penalties or fines against domestic reporting companies and indi-
viduals that intentionally failed to complete their beneficial owner-
ship information reports, the Treasury Department quickly turned
to exempting all U.S. companies and individuals while maintaining
the requirements solely for foreign firms. This announcement is
contrary to Congress’ intent, correct?
Mr. KALMAN. Yes, we believe it is.
Ms. VELÁZQUEZ. What was Congress’ intent?
Mr. KALMAN. Congress, when it passed the law, created what
we call a risk-based approach. That is, what are the greatest risks
for money laundering that could harm the American people? There
are numerous examples of—and case studies and other reports
where companies were created in the United States, both from U.S.
citizens, but also from foreign actors that simply create a company
in the United States. Iran created companies in New York, in Cali-
fornia; you have Venezuela creating companies in Miami. So there
are numerous examples of where that risk exists.
Ms. VELÁZQUEZ. The Corporate Transparency Act passed by a
wide bipartisan vote, didn’t it?
Mr. KALMAN. Yes.
Ms. VELÁZQUEZ. What was the vote?
Mr. KALMAN. I believe it was 260—270—249 to 173.
Ms. VELÁZQUEZ. By a big margin.
Mr. KALMAN. Over 70 votes.
Ms. VELÁZQUEZ. The Trump administration supported it dur-
ing House passage, arguing, and I quote, ‘‘represents important
progress in strengthening national security, supporting law en-
forcement, and clarifying regulatory requirements.’’ Correct?
Mr. KALMAN. Yes.
Ms. VELÁZQUEZ. So, Mr. Chairman, I would like to enter into
the record an article from the Financial Times that at the end says,
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‘‘Chinese logistics managers told Nikkei Asia last month that they
were creating shell companies to evade tariffs.’’ The FT also re-
ported that Chinese exporters were attempting to avoid tariffs by
shipping goods via third countries.
Chairman WILLIAMS. So moved.
Ms. VELÁZQUEZ. Mr. Kalman, in my opening statement you
heard me mention that the President’s on-again, off-again tariff
policies are causing significant uncertainty for small businesses
and their suppliers. Can you speak to why the CTA and BOI re-
porting is even more important in this uncertaint economic envi-
ronment?
Mr. KALMAN. Yes. So, as you mentioned, the Chinese compa-
nies are already telling Asian media that they are setting up com-
panies to avoid tariffs. They could set them up overseas and create
a web of companies. They could also set them up in the United
States. We have also seen other reporting in the Washington Post
and other media showing that other countries are trying to figure
out how they could game the system using anonymous companies.
Ms. VELÁZQUEZ. Mr. Kalman, this committee recently passed
H.R. 2966, the American Enterprise Act, which requires the SBA
7(a) and 504 program loans only be made to small businesses that
are 100 percent owned by a U.S. citizen, national, or lawful perma-
nent resident. Can you explain how the SBA is supposed to certify
that a business is 100 percent owned by a U.S. citizen, national,
or permanent resident without knowing who the beneficial owner
is?
Mr. KALMAN. I don’t see how they can do that. I think they
would have to set up a parallel system and businesses would have
to both, you know, enter their data to the Treasury Department
and the Small Business Administration redundantly.
Ms. VELÁZQUEZ. So then you agree that it is inconsistent to be
supportive of H.R. 2966 while opposing the Corporate Trans-
parency Act’s beneficial ownership information reporting require-
ments?
Mr. KALMAN. It does seem to be an inconsistency, yes.
Ms. VELÁZQUEZ. If you take the position that 7(a) and 504 pro-
gram loans should only be extended to small businesses that are
100 percent owned by a U.S. citizen, national, or permanent resi-
dent—can you explain how the beneficial ownership information
registration process can help ensure the requirement is carried
out?
Mr. KALMAN. Well, having a central register means that busi-
nesses would only have to register once. I think the intent of the
bill shows the value of the information and that the SBA may find
it valuable and other agencies may find it valuable to ensure that
they are dealing with U.S. citizens. So having a central register
that agencies can check, I think simplifies the bureaucracy.
Ms. VELÁZQUEZ. Thank you. I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Finstad from the great state of Minnesota
for 5 minutes.
Mr. FINSTAD. Thank you, Chairman Williams. Thank you for
holding this important hearing today, and thank you to our wit-
nesses for being here.
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Across rural America, entrepreneurs have worked hard to pursue
the dream of owning their own businesses. The franchise model
provides entrepreneurs with that opportunity, the opportunity to
achieve this goal and to bring an established brand to their local
communities. I represent a pretty rural district, and it is on the
front page of the news when an O’Reilly’s Auto Parts comes to
town or when a Culver’s or when a Buffalo Wild Wings comes to
our communities. And so we are very appreciative of this model.
On main streets across our country, franchise owners collectively
employ thousands of Americans. You all sit on local chamber of
commerce boards, other community organizations, and, Mr. Chair,
most importantly, they sponsor things like local town ball baseball
teams. Unfortunately, for years franchise owners have been subject
to misguided regulations, as was pointed out in your opening testi-
monies, these regulations coming from bureaucrats at the federal
and state levels, which limit your ability to grow and operate.
So with that being said, Mr. Wright, someone who has fostered
significant growth in your businesses throughout the franchise
model, can you maybe talk to us about how challenging the chang-
ing regulatory environment on the federal and state level have
been to you and what impacts that has had on your ability to ex-
pand and to grow?
Mr. WRIGHT. Yeah, sure. Especially the Joint Employer Act is
probably the greatest impact on us. As I stated in my opening re-
marks, a franchisee purchases a franchise because they need the
help. They want the help. And that is what we want to do. That
is what we were created for, that is what we are wired for. That
is what they pay us to do in their royalties. So anything that puts
in jeopardy our ability to give them 100 percent of our attention
and our training and our operations, because with the Joint Em-
ployer, there is risk associated with that. There have been many
lawsuits associated with that.
We conduct trainings in our headquarters where owners fly in
general managers and aquatics managers, and we don’t want to
stop doing that. We think it is critical that we continue to do that.
And so any rule that puts that in jeopardy hurts us, hurts the fran-
chise owner, and hurts the communities in which they are serving.
Mr. FINSTAD. Thank you for that. In your opening comments,
you also talked, Mr. Wright, about having locations, many locations
across several states. I believe you have two locations in the state
of Minnesota. So my question is, in your experience in multistate
franchise model, what has been some challenges and do some
states work better than others in regards to this model, your
model?
Mr. WRIGHT. Certainly the biggest challenge we have within
the states is the local health rules and regulations because in a lot
of times they don’t understand what a commercial swimming pool
is. And so they put rules and regulations that are more like a hotel
swimming pool. And that absolutely causes us to have lots of con-
versations and issues in making adjustments to both the physical
pool itself and the entry and exit into the pool.
Mr. FINSTAD. Thank you for that. All right.
Now going to Mrs. Beaudoin. I would like to say that this body
was in part built by Buffalo Wild Wings, but I don’t want to hurt
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your brand so I won’t say that. But I appreciate all of the risks that
you have taken and, you know, the story that you talked about in
regards to your family and I think that is great.
So you mentioned that your hope is that your newly engaged
daughter, newly graduated daughter, was going to come into the
family business. I am a small business owner myself. I have seven
children, so it is something that is on my mind quite a bit. What
are the biggest challenges that you face or that you are facing in
regards to bringing that next generation into business?
Ms. BEAUDOIN. So in regards to bringing her in, one of the con-
cerns we have is really, and we haven’t addressed it yet, is with
the estate tax and what that is going to mean for her taking over
our business and even for me taking over when my parents—my
parents are 50 percent owners in my business and what—the busi-
ness that I already own, what I am going to have to pay on the
estate tax to just acquire the rest of my business. So I would say
that is a big concern.
Another one is just around the administrative burden that I have
had to acquire lately. And then with Joint Employer, our franchisor
cannot provide any human resources related—anything human re-
sources related. So I have to take an additional expense to get out-
side counsel for handbooks and anything else with our team mem-
bers where we run into issues.
Mr. FINSTAD. I appreciate that. Thank you again for each and
every one of you for being here. Thank you for the risks that you
take day-in, day-out. Thank you for the jobs that you provide our
neighbors and just the great, really part of the fabric of our local
communities that you really bring each and every day.
So with that, Mr. Chair, I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Scholten from the great state of Michigan
for 5 minutes.
Ms. SCHOLTEN. Thank you so much, Mr. Chairman. And thank
you to all of our great witnesses. I am a huge fan of BDubs. My
constituent services director is a former BDubs server. He says
nothing prepared him more for this job than doing that. And we
frequent our local BDubs after my boys Little League games.
So I am also thrilled, as I said in my intro, to have my con-
stituent here, Mr. Cross, just weeks after I visited his business.
And I appreciate his willingness to come to Washington to express
concerns that so many franchisors have communicated to me.
While Mr. Cross and I might not align on every single issue, that
is okay. That is what these hearings are about to hash out some
of the most important issues that are facing our country when it
comes to small businesses.
I support having beneficial ownership reporting requirements
within the Corporate Transparency Act because we need to ensure
that American businesses are protected from bad actors who have
taken advantage of our nation’s business-friendly environment to
the detriment of our entrepreneurs’ security and access to fair mar-
kets. But I understand that my constituent and other witnesses
here today may have a different perspective. That is not something
to be afraid of. That is something to discuss and figure out how we
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can do it better. I look forward to hearing what he and many oth-
ers have to say.
Fundamentally, I believe that we should work to make these re-
porting requirements easier to navigate so legitimate hard-working
businesses, like the ones here today, are rewarded for playing by
the rules.
With that said, Mr. Cross, thank you for being here today. My
first question is for you. I had the pleasure of touring your business
back in West Michigan just a month ago. Can you tell me about
your experience with the franchising ownership model and how it
has benefited you, your family, and our community?
Mr. CROSS. I don’t think I have enough time to answer that
question, but I will tell you that I would not be here today without
the franchise business model. I can look myself in the mirror and
tell you that I did not have what it takes to start a business from
scratch, off the ground, the tremendous things that go into that
process, the uncertainties. So when I met the Merrick family, the
owners and founders of Fish Window Cleaning, and they showed
me this simple model that I could follow to be a business owner,
it has been absolutely life-changing for me. I have been able to sup-
port my family, my beautiful wife Betsy and my talented son Alex.
We have been blessed with hundreds of employees that have used
our job to put themselves through school or as a steppingstone po-
sition to whatever is next in life. I have been able to support the
local community.
As you know, Congresswoman, I am very supportive of Hope and
Calvin in the area. And I also have to stop and pause and say
thank you so much for what you have done for franchising. I appre-
ciate what you have done with the joint employer issue. I thank
you for your service as franchise Co-Chair. And I do want to con-
tinue to put that plug in. I look forward to teaching your boys how
to use those squeegees the moment they turn 18 years old. There
is an application waiting.
Ms. SCHOLTEN. Thank you. Thank you. Well, and we are so
grateful for everything you have done for our community.
In your written testimony, you talk about the CTA reporting re-
quirements and you refer to them as being confusing and burden-
some. And I think that you and I both agree on the importance of
transparency and security in our financial system. According to the
FBI, each year an estimated 300 billion in illicit proceeds make
their way through the U.S. financial system, including assets
linked to terrorism financing and human trafficking. No one wants
that. I am committed to achieving the goals of the CTA in a way
that is not overly burdensome for small business.
In your view, can you help us understand what tools or clarifica-
tion should these reporting requirements have to make them easier
for businesses to navigate?
Mr. CROSS. Well, unfortunately, because I have 31 employees,
that particular piece of law would not have affected my own fran-
chise location. So I am sorry, but I haven’t studied up on that
issue. I would say, in general, with my franchisor hat on, what I
am concerned about for my franchisees is the fact that they are
very small business, and Jennifer alluded to it, they don’t have in-
house counsel to help them navigate these issues. And they are
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really just busy trying to find new customers and hire employees
and clean more windows. And so anything that gets in the way of
that is very difficult.
And so, again, you know, we are blessed to be part of the Inter-
national Franchise Association. And while I can’t answer your
question directly, I would be happy to put you in touch with them
and we can work together on that issue.
Ms. SCHOLTEN. Thank you. I had so many more questions, but
I am afraid we are out of time. So, Mr. Chairman, I will yield back.
Thank you all.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Downing from the great state of Montana for
5 minutes.
Mr. DOWNING. Thank you, Mr. Chairman, and thank you to the
witnesses.
You know, the franchise businesses are critically and rapidly
growing part of the American economy. In my home state of Mon-
tana, franchise businesses were responsible for almost 15 percent
of job growth between 2023 and 2025. And this is despite the fact
that our franchises currently employ, you know, less than 5 percent
of the total job force in our state. And Republicans in Congress are
fighting to ensure small businesses, including franchisees, are un-
burdened by the crippling taxes and regulations. So one of our
main priorities is to extend the Tax Cuts and Jobs Act, the TCJA,
and its small business provisions.
So I am going to start with Mr. Wright. In your testimony, you
highlight the importance of TCJA Section 199A deduction, which
allows passthrough business owners to deduct 20 percent of busi-
ness income from their taxes. So can you explain in further detail
how the Section 199A deduction has specifically benefited your
business’ operations?
Mr. WRIGHT. Absolutely. Anything within the—in our franchise
process or any franchise process, the more capital that can be intro-
duced, interjected into the business is going to fuel growth. It is
going to fuel growth for building new locations, it is going to fuel
growth for expansion, it is going to fuel growth for higher wages
and benefits. And so that tax deduction puts more capital into the
hands of the franchise owners.
Mr. DOWNING. Well, thank you. And if this were to expire, if
this 199A deduction were to expire, how would that affect employ-
ees at AquaTots Swim School and—or the franchisees? How would
they be impacted?
Mr. WRIGHT. Yeah. So this isn’t theoretical. Our franchise own-
ers have been talking about that and they are actually putting on
pause, potentially, some of new leases they are looking at opening
because they are concerned about the impact that that is going to
have on their ability to invest in new schools.
Mr. DOWNING. Thank you. You know, Ms. Beaudoin had men-
tioned something about the estate taxes. Can you tell me how the
TCJA’s estate tax provisions have impacted your franchising?
Mr. WRIGHT. Oh, it is the same thing. So the—I think you said
it perfectly there. We are a younger franchise organization that
right now is looking at passing it on to the next generation. Those
estate taxes would have a—they would probably have to sell their
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locations rather than passing them on to their family, and that is
a really, really sad thing.
Mr. DOWNING. Yeah, it is. Thank you. In my home district,
many Montana business owners, particularly in rural communities,
struggle to access capital to fund their business ventures. And as
I am sure everybody on this panel understands, I mean, one of the
biggest limiting factors in building or growing a business is access
to capital.
So recently, I introduced the Expanding Access to Capital for
Rural Job Creators Act, and this is to help address these issues.
This legislation requires the Securities and Exchange Commission’s
Office of the Advocate for Small Business Capital Formation to re-
port on capital access issues faced by rural and small businesses.
You know, the franchise model offers a potential solution for some
of these capital access challenges.
I am going to move on to Ms. Beaudoin. Can you expand on how
the franchise system provides unique opportunities for aspiring
business owners to achieve their dream of business ownership?
Ms. BEAUDOIN. Yeah. So being part of a bigger brand is why
banks talk to us. Otherwise, it really wouldn’t be a conversation,
especially in the restaurant environment right now. Restaurants’
margins are so tight that banks are very, very hesitant to lend. But
because we are part of a bigger brand and have an even bigger par-
ent brand of Inspire brands behind us, they will enter into the con-
versation.
We do sometimes, because we are such a small franchise, my fa-
ther personally guarantees a lot of our loans, so there is a weight
on me that I have my parents personally guaranteeing loans as
well as trying to support my children. So it is a heavy burden. But
again, because we are a Buffalo Wild Wings franchisee, we have ac-
cess to many banks that will lend to us.
Mr. DOWNING. Yeah. Thank you. I have to admit, I had a bond-
ing moment with my daughter when she was in college and wanted
to go to dinner to BDubs. I am going what is BDubs? Is that by
that Buffalo Wild Wings over there?
Ms. BEAUDOIN. That is the Buffalo Wild Wings.
Mr. DOWNING. So what advantages in those last few seconds
here do you think the franchise model can bring for aspiring busi-
ness owners coming from rural backgrounds who are, you know,
often isolated from, you know, these sources of capital?
Ms. BEAUDOIN. Yeah, I mean, I think that it gives them an op-
portunity of a proven brand and a proven business model that they
don’t have to invent from scratch. They can work on—focus on op-
erating their businesses while the franchisor is developing, for ex-
ample, in the restaurant business, developing the menu and the
sauces and that type of thing, and they can really just focus on
building their culture and their business.
Mr. DOWNING. Excellent. Well, thank you. And on that, Mr.
Chair, I yield my time.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mrs. McIver from the great state of New Jersey
for 5 minutes.
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Mrs. MCIVER. Thank you, Mr. Chairman and Ranking Member,
for convening this hearing. And thank you to our witnesses for
being here today.
The franchise business model plays a critical role in providing an
avenue for entrepreneurs to become their own bosses and create
jobs in their communities. This model is sometimes overlooked, but
it is essential that federal policies create an environment where
these types of small businesses can thrive. But, as we all know, the
Trump administration is continuing on its path to make every part
of the federal government less transparent, more corrupt, and to-
tally ineffective. Continuing the work he started during his first
administration, Trump is ignoring the laws Congress passed, like
the Corporate Transparency Act and the Anti-Money Laundering
Act, that are meant to prevent corruption and criminal activity in
our economy. We must ensure our small businesses are not used
as pawns in global money laundering schemes or as a cover for
criminal enterprises. They deserve a level of playing field, not one
rigged by Trump and corruption.
With that being said, Mr. Kalman—am I saying that right? I
want to make sure I am pronouncing it right. Mr. Kalman, under
the Corporate Transparency Act, reporting companies must provide
the beneficial owner’s full legal name, date of birth, current ad-
dress, and unique identifying number from an identification card.
What is excessively burdensome about these reporting require-
ments?
Mr. KALMAN. We don’t think they are. In fact, most business
owners that we—when we went to look at state registrations, most
business owners actually provide this information to their state. It
is—most of the information is out there, so we don’t actually think
it is—it has not proven to be a burden. I will also say this, that
FinCEN had estimated that it would cost $85 for an initial reg-
istration. And then after that, if your information doesn’t change,
never for the history—for the rest of the eternity of your business,
would you have to think about the CTA ever again.
Mrs. MCIVER. Can you give us an example of when a legitimate
business would be incapable of providing this information?
Mr. KALMAN. You know, this was actually raised during the de-
bate and the passage of the law as a potential possibility. And in
10 years of debate, no one ever put forward an example of a com-
pany that couldn’t provide this information.
Mrs. MCIVER. Okay. Under the statute, companies are required
to report updates to the information—to the information on file
within 30 days of changes. Some claim that this will subject report-
ing companies to harsh penalties if they forget to update their in-
formation. Is this true?
Mr. KALMAN. No.
Mrs. MCIVER. Okay, thank you. With that, I yield back.
Chairman WILLIAMS. Gentlelady yields back. I now recognize
Mr. Meuser from the great state of Pennsylvania for 5 minutes.
Mr. MEUSER. Thanks, Chairman. Thank you all very much. It
is a nice conversation and appreciate your—your information. So
the Ways and Means Committee yesterday marked up their portion
of the one big, beautiful bill. We are delivering critical tax relief to
franchise businesses, small businesses. The bill has many provi-
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sions in it, such as 100 percent bonus depreciation, Section 199A
for a small business deduction, R&D tax credits, et cetera. Are
these provisions helpful? Critical? On a scale of 1 to 10, how impor-
tant are they to your growth and sustainability, Mr. Cross?
Mr. CROSS. Very important, Congressman. Thank you for the
question. Yes, any—any additional funds that we can have to rein-
vest back into our businesses, in my case, we look at vehicles and
additional labor to go out and do more work, are always much ap-
preciated.
Mr. MEUSER. Do others agree, Mr. Wright?
Mr. WRIGHT. Oh, 100 percent. Yes, exactly. Being able to take
that and invest back in the business is critical to the growth of
small business.
Ms. BEAUDOIN. A scale of 1 to 10, I would give it about a 25.
Mr. MEUSER. Very good. Thank you. That is what we thought.
I wish everybody thought that way, but we were working on it be-
cause the real world is where it matters, not in the, the theoretical
bubble that tends to exist in certain—certain places here in Wash-
ington. Small businesses franchise, you know, I get it. I was in
small business and lucky enough to grow it into a larger business
over time. I recall with the PPP, for a temporary period, franchises
were not included in availability for PPP because you were consid-
ered a larger corporation. We fixed that pretty fast. Is there any-
thing else that franchises do not gain versus small businesses that
you would like to see corrected, Mr. Wright?
Mr. WRIGHT. I can’t think of anything off hand.
Mr. MEUSER. Okay, all right. Because we differentiate quite de-
liberately. But as the Chairman was saying, you are small busi-
nesses, and we, you know, many of us understand that. I am just
making sure that there is nothing that you are not receiving be-
cause you are a franchise. And I was curious to hear about the per-
sonal guarantees, Ms. Beaudoin. I would think that being a fran-
chise, that wouldn’t be as—as——
Ms. BEAUDOIN. Yeah. Well, again, because we are our own
business, we are not Buffalo Wild Wings corporate. They just want
to make sure that we have the capital to back our loans.
Mr. MEUSER. Sure. And I signed many in my day as well, so
I understand. The tax provisions, 199A, obviously affect your long-
term planning and your investment strategies for your businesses?
Okay. So, very important.
You know, onto this beneficial ownership rule. Listen, when it
was, well, you know, when it was passed, there were four questions
that, on a regulatory basis, the Biden Department of Treasury
turned it into 52 questions. All right? And by the time January 1st,
2025, came around, when it was—when it was supposed to go into
effect, there was something like 25 percent of small businesses ac-
tually submitted. And yet, and meanwhile, domestic companies
were now excluded, which was, I certainly think, the right thing to
do because of the level of fines and other penalties that were being
expressed, but foreign companies must still abide by it. Why would
you think that that would be something that should have been im-
plemented or express to me why you are very happy it wasn’t? I
will start with you, Mr. Cross, and we will go down if you can an-
swer in a short period of time.
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Mr. CROSS. Again, Congressman, thank you for the question. I
think it is just the uncertainty of how to comply and the fear of
the fines. And again, I mentioned it in my previous response. We
don’t maintain on-site legal counsel to help us navigate these
issues.
Mr. MEUSER. Right
Mr. CROSS. And with my franchisor hat on, because of the limi-
tations of the joint employer, I as a franchisor am limited with the
support that I can provide our franchisees to help coach and guide
them through it.
Mr. MEUSER. Thank you. Mr. Wright?
Mr. WRIGHT. I think that was said very well. There is not a sin-
gle franchise owner that we have has any legal counsel at all. And
they will absolutely have to have some help in getting that docu-
mented completed.
Mr. MEUSER. Ms. Beaudoin?
Ms. BEAUDOIN. Yeah. And we are thankful to have the fran-
chise association that kept us abreast of this issue. That being said,
though, it is just another administrative burden that small busi-
ness—if I were not part of a franchise, I pray for the small busi-
ness owners daily of what they are missing, and it is the fear of
what am I going to miss and what am I going to be—have an exor-
bitant penalty for. And I am not sure the penalties around this, but
there are just so many administrative things that franchisees or
small business owners can miss.
Mr. MEUSER. Thank you for your honest real-world information
so we can base policy and support for small business based upon
it. Thank you very much.
Chairman WILLIAMS. Gentleman yields back. I now recognize
Mr. Cisneros from the great state of California for 5 minutes.
Mr. CISNEROS. Thank you, Mr. Chairman. And as a former
franchisee, I appreciate the witnesses being here today to share
their views with us, but I—I need to take a few moments to make
a note that we have been asking for months to have the SBA ad-
ministrator come speak before the committee about the policies and
changes at the SBA that affect our small businesses. My colleagues
and I have sent multiple letters to the SBA that have gone unan-
swered. Legislation about the SBA has been pushed through this
committee with no input or insight from the SBA on how it will be
implemented. It is important that the SBA administrator come in
person to answer questions like, you know, what was the extent of
the DOGE access to SBA headquarters and systems, and what was
done by the SBA to ensure the systems were not abused or
accessed by individuals without clearance? What specific offices or
departments within the SBA are affected by the reduction in the
workforce and where are the gaps? Where is the SBA relocating
the six regional offices and will any others be closed in the future?
What is the SBA’s plan to handle $1.7 trillion in student loan port-
folios while cutting 43 percent of their staff and also having staff
not trained to work with such a complex student—complex student
loan system?
So, that being said, I want to thank the Chairman and the com-
mittee staff for finally making it happen and getting the adminis-
trator on our calendar for the first week of June. If it took this long
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for the—for Members of Congress to get ahold of the SBA, I am
very concerned about how long, you know, any help from the SBA
is taking to get to our small businesses. So I sincerely hope the ad-
ministrator comes with actual answers as I look forward to work-
ing with the SBA to help small businesses in my district and
throughout our great nation.
So, that being said, Mr. Kalman, many opponents of the bene-
ficial ownership information reporting requirements claim the pen-
alties for small business owners who do not comply with the BOI
reporting requirements are overly punitive, with prison sentences
up to two years and fines up to $10,000. Yet the statute only pro-
vides penalties for willful failure of deception and reporting. Why
is this inclusion of the word willful so important and how does it
impact small business owners?
Mr. KALMAN. Thank you for the question. I think in the lead-
up to the passage of the bill, there was a lot of discussion. Nobody
wanted a negligence standard. No one wanted a reckless standard.
For those that are not familiar with these terms, all the sort of ‘‘
I forgot, ‘‘ ‘‘ I didn’t know the law existed, ‘‘ and ‘‘I didn’t realize
that that was what I was supposed to report, ‘‘ those are not pun-
ishable under the system. It is a willful standard. The original
standard was knowing, and they changed it to a willful, which is
even a higher bar. So we felt confident that we are only going after
people who know about the law and knowingly, willfully, you know,
whatever the term, choose to violate the law. And we think that
that is a safer standard and therefore the punishments are appro-
priate.
Mr. CISNEROS. So if a small business owner accidentally makes
a mistake on their submission, what are the consequences?
Mr. KALMAN. Nothing.
Mr. CISNEROS. All right, thank you for that. As I stated, the
SBA administrator is going to be here the first week of June. I
would love to hear from our franchisees if there is anything specific
that you would like us to address with the SBA administrator that
could go and help your businesses.
Mr. WRIGHT. I would like to thank the SBA for once again
opening up the SBA directory for both banks and lenders and po-
tential franchisees to be able to see that information.
Mr. CISNEROS. Anyone else?
Mr. CROSS. Anything that could be done to streamline the proc-
ess for our prospective franchisees. Franchisees that are using SBA
funds, it typically takes—it is an onerous process to get them
through it.
Ms. BEAUDOIN. I tried to apply for an SBA loan with my
steakhouse, and it was such an onerous process that I backed off,
and I found other investors to come in and help me get it started.
Mr. CISNEROS. All right, well, thank you for your testimony. I
will make sure that we address those issues when she is here. And
I yield back.
Chairman WILLIAMS. Gentleman yields back. I now recognize
Mr. Jack from the great state of Georgia for 5 minutes.
Mr. JACK. Thank you, Mr. Chairman, and thank you for con-
vening this hearing. And I will start with Ms. Beaudoin. Is that the
right pronunciation?
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Ms. BEAUDOIN. It is Beaudoin, but anything works.
Mr. JACK. Beaudoin. Yeah, I say that because I know a lot of
our colleagues on both sides of the aisle have already tried to af-
firm their loyalty to the franchise that is Buffalo Wild Wings. But
I suspect I am the only Member of this committee that has eaten
at perhaps one of your restaurants within the last week. So very
excited that you are here. And I, you know, I think what is impor-
tant—important about this hearing, in all seriousness, is that, you
know, for so many of our colleagues, it is instructive to know that,
you know, franchisees are small businesses. You think of these
massive corporations with these huge brands, trillions of dollars in
brand value, but ultimately, they are small businesses. And I am
just curious, you know, states such as Oregon and Illinois have in-
stituted minimum wage laws that treat franchisees as if they were
part of their franchisor. This includes attributing the franchisor’s
total employee count to the local franchisee. What say you to that
and is this treatment of franchisees fair?
Ms. BEAUDOIN. It has been tough on my colleagues in those
states for sure, to where they are looking at different ways to han-
dle their service models. They are working on ways to cut team
members. They are looking at automation. They are looking at
using computers to, or for servers, to have tablets to cut servers on
the floor. So, yes, I know it has been extremely burdensome on
those franchisees in those states.
Mr. JACK. Mr. Wright, I will give you a chance to comment.
Mr. WRIGHT. Yeah, I agree. Anything that we are doing to
hinder the growth of the franchise owners is—it is—it is just not
common sense. The process, in my opinion, and the regulation is
just not common sense.
Mr. JACK. Sure. And to help me understand scale as it relates
to just how many. I think you noted, ma’am, that you have got five
restaurants, and given your leadership across Buffalo Wild Wings
writ large, what is the average size of a small business that oper-
ates a few restaurants? Is it three, four, five? What do you see the
average being for the franchisee?
Ms. BEAUDOIN. Across Buffalo Wild Wings, I believe the aver-
age is around 14. I don’t know for sure.
Mr. JACK. That is great. And Mr. Wright, curious about Aqua-
Tots?
Mr. WRIGHT. Yeah, the average franchise owner is three
schools.
Mr. JACK. Three schools.
Mr. WRIGHT. Mm-hmm.
Mr. JACK. And Mr. Cross?
Mr. CROSS. Mostly single unit operators with six to eight em-
ployees.
Mr. JACK. Got it. Okay, very helpful. One of the things we are
talking about today is that many Members of our leadership are
meeting with folks right now to talk about the extension of the Tax
Cuts and Jobs Act. You have seen it over and over and over across
this hearing, but also across the communications that come out of
our conference as to how important that is to revitalize our commu-
nities, to generate and incentivize investment. And I would just
love to start with you, Mr. Cross, and work our way down. What
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is the impact of us passing the extension of these tax cuts going
to do to small business?
Mr. CROSS. For me personally, I am going to get to reinvest
more in my operation with additional management staff, with addi-
tional sales staff, with vehicles to go out and perform the service.
Mr. JACK. Wonderful, thank you. Mr.——
Mr. WRIGHT. Yes, we will be able to reinvest back in our—in
our team members as well to provide greater support for our swim
schools.
Mr. JACK. Wonderful.
Ms. BEAUDOIN. And we are looking at opening two additional
locations, so this will help us invest in that.
Mr. JACK. Perfect. The only other question I have is when we
talk about regulations, one of the things that I am really proud of
having accomplished this Congress is ensuring the passage of a bill
that repealed a regulation that drastically impacted a factory in my
district. And we see the regulatory burden being incredibly com-
plex, especially because as an administration is leaving in this
case, as the Biden administration was leaving, a lot of regulations
are foisted upon businesses across the country right before that ad-
ministration ends. I am just curious if you could all three of you
speak just very briefly to how we can best serve you as it relates
to in ensuring there is a regulatory environment that enables you
to thrive. We will start with you, Mr. Cross.
Mr. CROSS. 54 seconds isn’t enough. It is the Save Local Busi-
ness Act and making sure this joint employer legislation goes
away. It is detrimental to franchising and it threatens to take away
the retirements of thousands of small business owners across the
country.
Mr. JACK. Thank you. Sir?
Mr. WRIGHT. I would say the Joint Employer Act as well. Hold-
ing a franchisor responsible for franchisee employment practices is
just not good process at all.
Mr. JACK. Absolutely, thank you. Ma’am?
Ms. BEAUDOIN. And I would agree it is the joint employer
standard that needs to be loosened up.
Mr. JACK. Wonderful. Well, Mr. Chairman, I applaud you for
convening this hearing, and, as so many of our colleagues on both
sides of the aisle have noted, there is a point of pride in a lot of
communities when some of these brands move in and have an op-
portunity to serve the constituents we represent. So grateful for ev-
eryone’s testimony today, and likewise your service to your commu-
nities. And with that, Mr. Chairman, I yield back.
Chairman WILLIAMS. Gentleman yields back. Now, I recognize
Mr. Tran from the great state of California for 5 minutes.
Mr. TRAN. Thank you, Mr. Chairman, Ranking Member for the
panel today and the hearing today. Panelists, welcome. I appreciate
you being here. My first question is for Mr. Kalman. Recent SBA
reporting determined there are more than 34.8 million small busi-
nesses in the U.S., making up 99.9 percent of all U.S. businesses.
Despite this number, it seems to be a common misconception that
cyber threat actors who commit ransomware attacks only target
large companies or that small businesses on America’s main streets
don’t have to worry about Russia, the Chinese Communist Party,
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or North Korea targeting their small firms, their hardware stores,
or their investment advisory companies. First, can you explain why
smaller businesses or firms might attract or are more likely to be
victims of ransomware attacks?
Mr. KALMAN. Yeah. In our discussions with a number of small
business organizations, and I think it is something that my col-
leagues on the panel here have alluded to, is they don’t actually
have in-house counsel. They are not large institutions. Large insti-
tutions are much more likely to try and fight back. They are likely
to protect their brands. They are likely to have the resources to do
that. So while any individual attack might be a smaller amount of
money, it is much more likely that a small business owner might
go, I am going to pay this amount rather than higher legal costs
to try and fight it.
Mr. TRAN. Thank you. And then follow-up to that, can you ex-
plain how the Trump administration’s decision not to enforce the
Corporate Transparency Act’s beneficial ownership information re-
porting requirements makes legitimate small businesses more vul-
nerable to these types of attacks?
Mr. KALMAN. Well, if one were to try and go to law enforcement
to try and get help or actually try and pursue some remedy, they
would hit a brick wall. Without beneficial ownership information,
these companies open up and shut down overnight. They can move
across the street, they can move across the globe, and there is no
way of tracking them.
Mr. TRAN. And what could Congress do to help small business
owners who are likely targets of ransomware attacks carried out by
North Korea or China?
Mr. KALMAN. I mean, I think there are two things. One is to
reinstate the law as we have it here in the United States. But also
the United States has been a leader globally in moving anti-corrup-
tion legislation. There are now 100 countries around the world that
have pledged to start beneficial ownership directories so that we
could begin to track this stuff across countries and across con-
tinents. I would urge us to get back into that and follow up with
all those countries.
Mr. TRAN. And Mr. Kalman, your organization published a fact
sheet with numerous examples of shell companies from the
fentanyl drug trade, which is currently killing about 80,000 Ameri-
cans per year. Can you explain how small—how shell companies
are being utilized in the fentanyl drug trade? And how would the
Corporate Transparency Act help reduce their prevalence in this il-
legal market?
Mr. KALMAN. So anonymous companies are not just a mistake
or an occasional use by drug cartels. It is a feature of how they op-
erate. And the President, for example, in his latest budget, has pro-
posed to increase funding for border and customs protection. That
is only part of the problem. It is just trying to stop drugs that come
into the country. There are numerous ways in which they are going
to get here. But bankrupting the drug cartels is actually seen by
DEA agents, if you ask them, as a more effective way of shutting
down these operations. The Corporate Transparency Act is going to
be critical to do that.
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Mr. TRAN. Thank you for that. Mr. Wright, the government
guarantee provided by the SBA in the 7A, the 504, and other cap-
ital access programs enables lenders to offer more affordable loans
with more advantageous repayment terms than they would other-
wise have. This helps small businesses—small business borrowers
overcome many of the economic pressures we are discussing here
today. And I am always looking for ways to improve awareness of
the SBA’s capital access programs and the benefits they provide.
How do you think we can help the SBA improve awareness of these
programs for franchisee owners and small business borrowers?
Mr. WRIGHT. I would say working with the IFA, making sure
that you are providing that information to the International Fran-
chise Association, who does a fantastic job of communicating to all
of the small businesses and the franchisors about this opportunity.
We do that. We, as part of our process of onboarding a new fran-
chise owner, we provide them with a pretty large list of opportuni-
ties, usually through lenders who are working that process across
the country. So it has been—SBA has been vital to the growth of
our business.
Mr. TRAN. Thank you so much for that, Mr. Chairman. I yield
back the rest of my time.
Chairman WILLIAMS. Gentleman yields back. Now recognize
Mr. Alford from the great state of Missouri for 5 minutes.
Mr. ALFORD. Well, thank you very much, Mr. Chairman, and
thank you, Ranking Member Velázquez. As a previous small busi-
ness owner, I know firsthand one of the most difficult parts of
starting any business is staying in business is your branding and
your marketing. And of course, capital franchising offers a ready-
made pathway towards creating their small businesses. The fran-
chise model provides a pathway for Americans who want to be
their own boss to achieve that dream. Here in the Small Business
Committee, we are focusing on helping all small businesses, fran-
chise and otherwise, succeed on main street. I am proud to be on
this committee.
Mr. Wright, in your testimony you mentioned that franchises
typically represent about 20 percent of SBA loans by $ volume. I
am currently working on legislation that would seek to raise the
current maximum loan of SBA backed loans. How could raising the
limit on 7A and 504 loans benefit entrepreneurs looking to start
small businesses?
Mr. WRIGHT. That is a great question.
Mr. ALFORD. That is why I asked.
Mr. WRIGHT. Literally this past week I was talking to a fran-
chise owner who is up against that $5 million cap because of mul-
tiple schools that they have owned. And they are looking to grow,
and they are looking at options other than the SBA to do that. So
it would absolutely be beneficial to our owners who are opening
multiple locations.
Mr. ALFORD. We got to get that done. Missouri represents about
16,000 franchise establishments contributing to about 170,000 jobs
in the Show Me State. And we are proud in our district to have
Fish Window Cleaning headquartered there. Mr. Cross, are there
any policy changes at the federal level that you believe would sig-
nificantly benefit small franchise owners like yourself?
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Mr. CROSS. Yes, Congressman, thank you for the question. I ap-
preciate the red tie, that is our branding.
Mr. ALFORD. That is why I wore it.
Mr. CROSS. I appreciate it. It goes back to the joint employer.
Again, it is the single biggest issue that is affecting us as
franchisors to being able to support our franchisees and their pur-
suits of small business ownership.
Mr. ALFORD. Ms. Beaudoin, is that how you pronounce it? Did
I get it right? Oh my goodness.
Ms. BEAUDOIN. That is perfect. That is the French version.
Mr. ALFORD. Brian Jack told me how to pronounce it. He looked
it up.
So thank you. Thank you for being here. How many wild wings
do you own, Buffalo Wild Wings?
Ms. BEAUDOIN. I have four.
Mr. ALFORD. Four?
Ms. BEAUDOIN. Yes.
Mr. ALFORD. How did you get into that business?
Ms. BEAUDOIN. So I started in college. My father—I went to
West Virginia University, and my father was looking at getting
into a different type of restaurant. He had started a restaurant
when I was three, and we grew up in it. And I told him there was
a place he should check out, and he called the number on the back
of the menu.
Mr. ALFORD. All right. I looked this up on Guac or Grok. You
know, on X, Grok. The hottest sauce at Buffalo Wild Wings is the
Blazin’ Knockout.
Ms. BEAUDOIN. Yeah.
Mr. ALFORD. It is made with nine of the spiciest peppers, in-
cluding Devil’s Breath, Carolina Reaper, Scorpion, Ghost,
Habanero, red and green peppers, jalapenos, Chile de Arbol, and
cayenne. This sauce is so intense, it comes with a warning for po-
tential skin and eye irritation and is served with ice cream to cool
the heat. It is designed for extreme spice lovers and is significantly
hotter than other sauces like wild or hot. My question to you, Ms.
Beaudoin, have you had this hot sauce?
Ms. BEAUDOIN. I have. I have. Actually, I tested four blazin’
sauces, four versions of a blazin’ sauce, at one FAC meeting. I
would like to tell you I was the only member that tried all four.
And yes, and I frequently have participated in the Blazin’ Chal-
lenge with my team members.
Mr. ALFORD. How long does it take to get your taste buds back
after they are burnt off your tongue?
Ms. BEAUDOIN. It is a few days, yeah. It is—it is—yeah.
Mr. ALFORD. I have got about a minute and a half left. Just for
the folks who may be tuning in or maybe watching this on one of
our social media channels later, kind of describe how the franchise
model works. A lot of people don’t realize, I think, that it is—it is
not a corporate-owned store.
Ms. BEAUDOIN. Correct. No, we are—we are our own busi-
nesses. I wear many hats in my business. I coordinate the contrac-
tors and the architects when we build. I am the last one that
checks payroll. I oversee our bookkeeper. I am head of HR. I am
the operations manager. They report up to me. So I wear mar-
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keting, our local store marketing. I do have somebody that handles
our local store marketing, but again, she reports up to—to me, and
I handled that myself for many years. But that being said, we also
have resources that we can draw on from the corporate office so
that I don’t have to reinvent the wheel. Thankfully, I don’t have
to do the menu development piece. I do set my own pricing. We
have been very conservative in our pricing, which has led to in-
creased sales the last few years, but we definitely run our own
businesses well.
Mr. ALFORD. To all the witnesses here today, thank you for
coming here, as I like to say, on your own time and on your own
dime. Your time is an investment in the future of what we do here,
making main street great again under the leadership of Chairman
Williams. So thank you so much.
Ms. BEAUDOIN. Thank you.
Mr. ALFORD. And with that, Chairman, I yield back.
Chairman WILLIAMS. Gentleman yields back. I now recognize
Dr. Conaway from New—from the great state of New Jersey for 5
minutes.
Mr. CONAWAY. Thank you, Mr. Chairman, and thank you, wit-
nesses, for presenting yourself today to offer information on this
important issue. Enacted in 2020, the Corporate Transparency Act
increases transparency in business ownership in order to combat
certain financial crimes like tax evasion, money laundering, ter-
rorist financing, the trafficking in labor and in the sex trade. These
are important goals that protects our country, protects the interests
of small businesses and individuals. The administration, however,
last month decided they would no longer enforce penalties and
fines against domestic companies and individuals that inten-
tionally—that is an important part of it—intentionally and willfully
fail to complete their financial ownership information. Information
that involves a name, address, perhaps a driver’s license. It takes
20 minutes to do, $85 to file, and you never have to do it again
once done. I view this action as reckless, and I think I am joined
by many in this, because I understand that the American people
have an interest in preventing drug lords from flourishing and ter-
rorists from gaining a foothold and basically attacking freedom, at-
tacking our country. Can you, Mr. Kalman, speak to how these ac-
tions taken by the administration will weaken national security?
Mr. KALMAN. Thank you for the question. There are numerous
examples of bad actors in the U.S., adversaries setting up compa-
nies in the United States to exploit our financial system, whether
that be Chinese companies setting up in California to access and
purchase or get their hands on sensitive information from our De-
fense Department. There was actually a Defense Department con-
tract at one point in Afghanistan—in which a U.S. company was
getting funding through the Defense Department to provide serv-
ices to the troops. That company—secretly had ties to the Taliban.
We were literally giving money to the people who were shooting at
our troops. These are the kinds of horrific stories that we want to
make sure we are doing everything in our power to counter.
Mr. CONAWAY. Thank you for that. We have—there have been
a lot of concerns raised about the burden of complying with this
law, and there have been—it took 10 years for this law to be
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passed. There were a lot of interest groups and law enforcement
agencies who were involved in its passage, good government people,
people concerned about national security. Can you put more clothes
on the coalition that came together to get this law passed?
Mr. KALMAN. Yeah, I actually put this together because I often
get asked this question. So if you don’t mind, I am just going to
quickly read that the coalition included police, chiefs of police, sher-
iffs, prosecutors, national security experts, anti-human trafficking
organization, faith-based networks, business trade associations,
banks, real estate associations, consumer and housing advocates,
accountable governance organizations, and scholars at both con-
servative-and liberal-leaning think tanks. It was a wide coalition.
Mr. CONAWAY. Broad coalition, and that, I think, is a testimony
to how—to the strength of the desire to get this bill passed and to
bring security to the American people and to protect small busi-
nesses from attack by these foreign corporations. And indeed, in
this climate of increased tariffs, broad-based tariffs, people who can
go unidentified will make domestic shell companies here in order
to get around the tariffs and confound the administration’s desire
to collect these tariffs and then pass it along to the wealthiest in
our country.
I met with small businesses in my district a couple of weeks ago
to talk about tariffs and the impact on small businesses. This sort
of whirlybird, back and forth and uncertainty. I heard repeatedly
from car dealers and people involved in selling all sorts of items,
insurance brokers, and the like about how these are raising costs.
Many small businesses buy—make their products from items pur-
chased overseas and also sell overseas. So they get hit coming and
going, and of course the consumer pays for all of these. Can you
comment on how this—this—the CTA, helps with the terror prob-
lem that—that so many of us are facing?
Chairman WILLIAMS. Time is up.
Mr. CONAWAY. I don’t know if you can answer that now?
Chairman WILLIAMS. Time is up. I now recognize Mr. Patronis
from Florida, from the great state of Florida, for 5 minutes.
Mr. PATRONIS. Thank you, Mr. Chairman. I got to admit, I was
really excited when you had a restaurateur come up. My family,
my great granddaddy was in the restaurant business. My
granddad, my dad, and now my family. And you know, just to be
able to pick your brain and maybe empathize a little bit. Is it—oh,
I am sorry. First timer, rookie problem. Horrible. No excuse. Does
my clock start over? Nobody heard what I was saying. Thank you,
sir. But as I like to tell people, the restaurant business is intoxi-
cating, but it is also the most competitive business that exists. Peo-
ple could go anywhere for their birthday, their anniversary, maybe
in your case to watch a playoff game, and what you have to do to
ensure your product is always on the mark in order to get that con-
sistent return customer. And I struggle sometimes, and I think
about the days of pre-COVID and how it seems like life was so
much better back then and then how the workforce has changed so
dramatically since then. And then I want to get you to elaborate
on specifically, because of the competitive nature of your industry
and what you have dealt with in your family’s evolution, how much
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help did you get from the government when you decided to open
up your first restaurant?
Ms. BEAUDOIN. Our first restaurant, none.
Mr. PATRONIS. Yeah. You know, and I mean, you took that
risk.
Ms. BEAUDOIN. My father did. My father, he financed it. I
mean, after 30 years of working in the restaurant business, he
saved every penny he had. We rarely went on vacation. Well, we
went on one vacation a year to the beach.
Mr. PATRONIS. Sure.
Ms. BEAUDOIN. And the restaurant closed that week. But yeah,
so he funded our first restaurant.
Mr. PATRONIS. Yeah, I relate. Our restaurant would close in
the month of December and that is when dad would take us on our
trip.
Ms. BEAUDOIN. Yep.
Mr. PATRONIS. And all of the hundreds of jobs that you have
created, the families that you have put to work, any assistance
from the government in any way, shape, or form?
Ms. BEAUDOIN. I mean, through Covid with PPP——
Mr. PATRONIS. PPP.
Ms. BEAUDOIN.—and RRF, yes. Otherwise, no.
Mr. PATRONIS. Yeah. What are some of the—if you had a magic
wand and say, you know what, if I could change this one element,
and I don’t care if it is state, local, or government, what would
make your life easier when it comes to growing your business?
Ms. BEAUDOIN. I think it is two things, actually. I think it is
access to capital without having to personally guarantee it. That is
a burden that my father takes on, and I am grateful for. But also,
I think it is the amount of administrative duties and the con-
stant—I feel like I constantly wear a cloud over my head of what
am I missing or what am I forgetting, and what are the penalties
going to be if I check the wrong box on a form, honestly, when it
comes to government regulation.
Mr. PATRONIS. And do you ever look around at other businesses
and get envious of assistance they may receive in comparison to
what you are eligible for?
Ms. BEAUDOIN. I think I focus on my restaurants and just on
my—on my road, yeah.
Mr. PATRONIS. The restaurant business, I tell people, and I
would tell mom all the time, look, if you don’t take care of the cus-
tomer, somebody else will.
Ms. BEAUDOIN. Correct.
Mr. PATRONIS. But when you get into government, it is hard
to have that type of attitude. So I have always been in front of my
coworkers and my employees, and anywhere I have been in govern-
ment, my attitude has always been, if you don’t take care of the
customer, I am going to find somebody else that will. And it is a
culture that doesn’t happen overnight. But you know, you build out
a team, and as all these Members up here, they—they have, you
know, the teams they lead are trying to be responsive to our con-
stituents by telling you still have to be—hold us accountable, you
know, and what else can we do? And I mean, just hearing your con-
cerns about access to capital, to be able to grow the business, to
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be able to make that risk, you have got a proven track record. It
is obvious, you know, what you are doing. Otherwise, you wouldn’t
continue to expand the way you have. What about supply chains?
Ms. BEAUDOIN. Supply chains have got, again, if I did not have
a franchisor, I don’t know what we would have done through
COVID. There was a point where we had no wings. That has got-
ten drastically better. But as a small business owner, if it weren’t
for the franchisor, we would not have been able to survive.
Mr. PATRONIS. Well, congratulations on getting your daughter
into the business.
Ms. BEAUDOIN. Thank you.
Mr. PATRONIS. So my dad had four boys. My three brothers are
still there. I am the baby of the four. And up until 2017, my broth-
ers still do—they clock in and clock out every day. If you want a
paycheck, you are taking care of the customers.
Ms. BEAUDOIN. Yeah.
Mr. PATRONIS. So, anyway, it is just a real treat to have you
come up and give some reality to this group.
Ms. BEAUDOIN. I appreciate you guys having us. Thank you.
Mr. PATRONIS. I yield back.
Chairman WILLIAMS. Gentleman yields back. I now recognize
Ms. Simon from the great state of California for 5 minutes.
Ms. SIMON. Thank you all so much, and this has been a great
panel. To the gentlewoman who came in thinking about you. My
daughter got married a year and a half ago, and you will be em-
ploying a lot of small businesses to make that wedding go. I am
telling you, from the flowers to the bar to the tablecloths, you all
are providing such an incredible service in the community. I ran
a youth program some years ago for a long time for young women,
really young women who are struggling. So many of their first jobs
out of foster care, out of the juvenile justice system, were in local
small business franchises. So thank you so much for lifting up,
really, what is so important.
You know, I have a few short comments, and I want to make
sure that, you know, I associate my comments to the comments of
Ranking Member Velázquez. You know, although I was not in Con-
gress when the Corporate Transparency Act was passed, I under-
stand and agree with Mr. Kalman and your remarks earlier this
hearing. Mr. Kalman, I was extremely concerned listening to your
testimony about the potential consequences of rolling back the law.
And I am committed to working with this committee and, again,
our partners on the ground and communities to making sure that
we get it right.
Now, while my Republican colleagues are using this hearing to
justify really what is happening here in the House this week and
the tax cuts and gutting the Corporate Transparency Act, you
know, I want to highlight how this administration’s actions are ac-
tually impacting small businesses and franchises on the ground.
Unlike big companies, small businesses and franchises can’t absorb
these costs. Restructuring supply chains in a lobby for exclusions.
You know, when shipments are delayed or prices soar like they are
right now in many communities, small businesses are the first to
feel the brunt and the pain because their margins are much small-
er. In my district at the Port of Oakland, we saw shippers rush
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cargo through in April before the tariffs took effect. And these port
sellers, they are now experts; they are expecting—these experts are
expecting 20 percent fewer ships to call into the port in June. This
is a catastrophe. That translates to fewer outbound vessels for ex-
ports and higher cost for imports. This will certainly hit small busi-
nesses the hardest, as they won’t be able to win the bidding war
for container space against multinationals.
Now, I have a question for one of our witnesses, but I do want
to say, in meeting with so many franchise owners and—and so
many small business owners in my district, we know that approxi-
mately in this country, 30 percent of the employees that are em-
ployed by franchises, food service workers, et cetera, they are able
to access Medicaid. Many of them are half-time workers. Many of
them, again, are paid a low wage. And their health and their fam-
ily’s health are contingent upon them being—having this resource.
And I am so afraid for our small business community across the
country that in just weeks to come, the viability of their workforce
will be harmed. So I am hoping that this committee and others
that we band together to support small business owners, franchise
owners, and the good people that are working for them.
I do have a quick question. And actually our Ranking Member,
she lifted up and talked about an article before I go further, the
Chinese exporters, the Financial Times article. I would encourage
us all to read that article so that we know what is at stake. And
in my short question, Mr. Kalman, would you quickly explain how
U.S. law enforcement would identify shell companies, we talked
about these before, in the wake of the Trump administration’s deci-
sion not to enforce the Corporate Transparency Act’s beneficial
ownership registration requirement?
Mr. KALMAN. It will make it very difficult. I mean, we have the
experience prior to the Corporate Transparency Act being passed of
law enforcement running into a brick wall. It is the reason that
they all rallied around this bill for 10 years and worked with us
to get it passed. So I think we will return to a time where it is very
difficult.
Ms. SIMON. Thank you very much, and I will yield back. Before
I go, would anyone like my time? I have 32 seconds. All right, there
you go. Thank you, Mr. Chairman.
Chairman WILLIAMS. Did you give—go ahead. Okay.
Gentlelady yields back. Gentlelady yields back. And I recognize Mr.
Wied from Wisconsin, the great state of Wisconsin, for 5 minutes.
Mr. WIED. Thank you, Mr. Chairman, and of course, the wit-
nesses who came here today to share their experiences with us. As
a former franchise owner myself, I know the firsthand the benefits
of this model for both the franchisee and the community that they
live in and work in. Whether it is fast food like McDonald’s, gyms
like Planet Fitness, or even hotels like Motel 6, the opportunity to
become a franchise owner exists across many industries. For first-
time entrepreneurs, becoming a franchisee allows access to a rec-
ognizable brand, the framework to begin their business, and poten-
tially other resources from the franchisor. This allows first-time
business owners to develop the skills to run their business while
receiving support from their franchisor. This type of increased sup-
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port makes the American dream more possible for thousands of
Americans across this great country.
The most important point I make is that franchises are small
businesses, and they should be treated as such. However, Biden era
policies such as beneficial ownership information requirements and
the joint employer rule, as well as other state laws that misinter-
pret the relationship between franchisees and their franchisors, ac-
tively hurt these small businesses. My Republican colleagues and
I are committed to advocating for franchise owners and their busi-
nesses just like any other small business.
Mr. Cross, Fish Window Cleaning. I love good, clean windows.
Definitely love that on my businesses and at home. But as you
know, maintaining and replacing equipment can be very costly for
a small business. How would the reinstatement of 100 percent
bonus depreciation under the Section 168, the K, allow you to rein-
vest in your small business?
Mr. CROSS. Yeah, great question and thank you. And yes, every-
body loves clean windows.
Mr. WIED. Oh yeah.
Mr. CROSS. It keeps us in business. Congressman, for me par-
ticularly, again, it goes back to vans. Additional equipment are the
primary ways that additional—the depreciation expense would help
me there.
Mr. WIED. Great.
Mr. CROSS. Purchasing more vans.
Mr. WIED. Yeah, absolutely. So, Mr. Bode—Mrs. Beaudoin, well,
Buffalo Wild Wings, which is obviously amazing. My kids love it as
well. We have it often. There are many examples of laws across our
country that treat franchisees as part of their franchisor. How do
these laws negatively impact the owner of a franchise like you?
Ms. BEAUDOIN. Yeah, as I spoke earlier, it is really under our
human resources policies. So we have to employ outside counsel for
our handbooks and to—for our workplace safety training, for sexual
harassment training. The franchisor can’t give us any feedback on
that. If we have even a brand damaging issue that is caused by one
of our team members, we really have to handle that and kind of
navigate it with a really light touch from the franchisor.
Mr. WIED. Also, what impact do higher minimum wage laws for
franchisees have on, you know, like businesses and especially in
the rural areas?
Ms. BEAUDOIN. Yeah, it is interesting. So I am in the pan-
handle of West Virginia. I am on the 81 corridor. So you can get
to three states in about 45 minutes there. And so I am in Virginia,
West Virginia, and Maryland. We have a really hard time hiring
in the panhandle with the lower minimum wage, even though our
starting wage is higher than the other two states. Just because it
is—the other two states have a higher minimum wage. But at my
back of house, the kitchen wage is actually lower in those states
because there is a perceived—there is a perception that they are
going to get paid more. But I am trying to attract workers in the
lower minimum wage state. So really, I am paying more in the
state with a lower minimum wage.
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Mr. WIED. Well, thank you all for all that you do. You are the
heart—the heart of America. The small businesses and you are
main street. So appreciate that, and——
Ms. BEAUDOIN. Thank you.
Mr. WIED.—thank you all for being here today. I yield back.
Chairman WILLIAMS. Gentleman yields back. I now recognize
Ms. Goodlander from the great state of New Hampshire for 5 min-
utes.
Ms. GOODLANDER. Thank you, Mr. Chairman, and thank you
to our witnesses for being here today. You know, I really appreciate
your—your testimony, especially tracing the roots in the history of
the franchise model. It is a deeply American idea. The word, I
learned recently, franchise comes from a French word, but it is an
American idea at bottom. But the French word it comes from basi-
cally means to make free. And I come from the Live Free or Die
State. And our state really does have a long history with fran-
chising and the franchise model. We call Bill Rosenberg one of our
own. And Bill Rosenberg, of course, the founder of Dunkin Donuts.
I am very upset to learn that Dunkin Donuts is going to be leaving
the Longworth House office building. I learned that this morning.
We will try to fight that. But he helped to actually bring about the
International Franchise Association, and he left a long legacy in
New Hampshire.
We are also home to the McDonald’s brothers. And before I came
to Congress, I worked at the Department of Justice in our antitrust
division. And one of the cases I worked on that had a real impact
on me that I felt deeply about was a case involving a woman,
Leinani Deslandes, who worked—she started out her career as a
crew worker in a franchisee-owned McDonald’s. She was making $7
an hour. She worked really hard. And you know, I think one of the
powerful things about the franchise model is the people who work
in franchises have dreams of actually becoming small business
owners too. And you know, she said someone who is making your
fries today in 10 years could be running six or seven McDonald’s.
That is what she believed. That is at the bottom of what makes
this such a powerful model.
She worked hard throughout her career. She got a pay raise. She
was making $12 an hour. And, you know, eventually a manage-
ment job opened up in another McDonald’s not too far away. She
was prevented from actually even pursuing that job because of a
clause in a franchise agreement that is known as a no-poach agree-
ment. It basically restricts franchisees from hiring workers from
other franchises. This is at odds with the antitrust laws in our
country, which promote competition and protect workers as equally
as they protect small businesses. I wanted to ask about this be-
cause, you know, this is a problem that we have seen across the
American economy and in a number of different types of franchises.
But I wanted to ask you about this, Ms. Beaudoin. To your knowl-
edge, do you have any employment contracts or franchise agree-
ments that include no-poach provisions?
Ms. BEAUDOIN. Not to my knowledge.
Ms. GOODLANDER. But at one point there were such clauses in
agreements that Buffalo Wild Wings?
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Ms. BEAUDOIN. I can’t—I am not sure. I don’t know the exact
provisions if there are.
Ms. GOODLANDER. Any of our other witnesses, are you aware
of any—any of those types of clauses?
Mr. WRIGHT. No, we do not have an anti-poach in our agree-
ment.
Mr. CROSS. And I am not—I am not aware.
Ms. GOODLANDER. Good. Well, can you help us understand
why—why those types of clauses might have been put into con-
tracts?
Ms. BEAUDOIN. I didn’t develop it, so I really couldn’t speak to
it. And again, if it is in my contract, I am not aware of it.
Ms. GOODLANDER. So your testimony today is you see no need
for these types of agreements? From your perspective, from the per-
spective of small businesses who are trying to make it work and
work for your workers, you don’t see a need for these types of
agreements?
Ms. BEAUDOIN. I think we are in the most competitive employ-
ment environment that we have ever been in, and so I can under-
stand team members going back and forth. And as a franchisee,
having some security would be amazing. But again, I understand,
though, that we want to get the best help possible. And if there is
a better opportunity for my team members elsewhere, I understand
why they would go searching for it.
Ms. GOODLANDER. Well, I appreciate that. And I know, you
know, I have, talking to small businesses in my state, I know there
is—it is—it is a challenging moment right now. You are facing a
whole lot of uncertainty. I wanted to ask you about the impact that
tariffs have had on your bottom line in recent weeks and what you
would urge this committee to consider as we are looking, as many
of us are looking, to restore the important role that Congress
should be playing in the imposition of tariffs.
Ms. BEAUDOIN. For me, it is just really providing more cer-
tainty. As I shared in my opening testimony, restaurant ownership
is not for the weak. We work hard for every dollar that comes
through our doors, and so margins are thin. Anything that in-
creases cost raises concern. Uncertainty brings a lot of discomfort.
So really, for me, as far as the tariffs go, I mean, in any of these
tax provisions, just anything that can be done to eliminate that un-
certainty for the franchisee would be phenomenal.
Ms. GOODLANDER. Well, I appreciate your testimony. I see my
time is up, so I yield back, Mr. Chairman.
Chairman WILLIAMS. Gentlelady yields back. I now recognize
Mr. Olszewski from the great state of Maryland for 5 minutes.
Mr. OLSZEWSKI. Thank you very much, Mr. Chairman, to our
Ranking Member, and to all of our witnesses really appreciate your
time here today and your feedback. Also appreciate the contribu-
tions you are making both within your communities and across this
great country through your franchises. In my home state of Mary-
land, we have over 15,000 franchisees and franchise locations,
which employs over 155,000 people. The type of ecosystem that we
know helps Marylanders and helps all Americans.
I know we talked a lot about the CTA today, so I will try not to
talk too much about it, but do want to reinforce that. I think this
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is just critical legislation that provides law enforcement with those
fundamental tools to help keep us safe from criminals laundering
funds and setting up shell companies to wire money to criminal or-
ganizations. Here with Police Week, I want to especially thank my
younger brother Jordan, who is in law enforcement back home, for
his service, along with the men and women across this country who
serve us all.
I do think it is a timely conversation that we are having around
the idea of countering corruption, though. Just this week, our
President publicly announced the possibility, floated the possibility,
of taking a $400 million gift from the government of Qatar. A lux-
ury plane that would be used first as Air Force One and then do-
nated to his presidential library. But just worry that, you know, in
this governing world, that the public is rightly asking the questions
about do these types of things affect our decision-making. So, un-
fortunately, it seems in Congress, we are getting to a place where
we are picking and choosing which reporting requirements we re-
quire and which ones we don’t. We discourage global interaction
that can foster new ideas in the classroom. On the business side,
however, we are sitting and watching as this administration fails
to enforce legally mandated penalties or fines.
So I guess I want to sort of ask, just sort of generally to all of
you, you guys all follow whatever applicable rules and regulations
that are out there, whatever they are, as best you can, right? Yeah.
And then generally for business, right, knowing the goalposts,
whatever they might be, even if we disagree, is helpful so that we
can plan for and work around those? Okay.
And so I guess my point to my colleagues here is, you know, we
can disagree with whether or not it was the right idea, but I think
we have a well-established process. I know it was a 10 year, we
talked earlier in testimony, this was a 10 year, bipartisan, multi
stakeholder effort to get this passed. And if we think that there are
flaws, we should come back through this Congress, make those
changes, and we can do things like simplifying the reporting form.
If there are improvements to be had, we can do instant verification.
We can do sufficient resources if there are questions. Would that
be something that would be helpful if we were to take up that con-
versation? You guys are being so succinct in your answers, and I
really appreciate it.
So since you have been so great with me and gracious with me,
I will just turn the floor open to all of you. In addition to following
the process so that we can address this issue, both fighting crime,
but also being good partners to our small business leaders, is there
anything new that we should be thinking about that would best
help you create more franchises across this country? Anything new
that we should be thinking about?
Mr. CROSS. I think it has all been covered. Access to capital to
give potential franchise owners. Streamlining that process, clari-
fying the joint employer standard, making it easier for small busi-
nesses. I think I can speak for myself, you know, when I started
this business early on, it was me, one other person, and a window
cleaner. And we were out there just hustling to make it happen,
to drum up new business, to hire employees, and to build that busi-
ness. And I had very little, if any, time to go out and worry about
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some of these other things that we have discussed today. So clari-
fying those things and making it easier for those businesses that
are simply just trying to get this off the ground and put food on
the table for their families would be appreciated.
Mr. WRIGHT. Yeah. Removing burdensome regulations is critical
to the process. So we have talked a lot this morning about the joint
employer, but I would also add that the tax policies that are going
to—that are being reviewed right now are also critical to the
growth of the franchise committee.
Ms. BEAUDOIN. Yeah, I would agree. It is the tax policies and
also one that we have talked about but haven’t really talked about
thoroughly is the increased estate tax as well as addition—in addi-
tion to the 199A and the EBITDA standard. And then just really
it was—I appreciate Mr. Kalman explaining the difference between
willful negligence. That being said, that is not true of all the provi-
sions that franchise owners and small businesses face. So it is
just—it is really what we don’t know, what we don’t know as far
as some of these things that come along administratively.
Mr. KALMAN. Very quickly I just want to reiterate that if there
are improvements to streamline the system for small business, we
would be first in line to join that process.
Mr. OLSZEWSKI. Hear, hear. Me too. Thank you all again so
much for your time. I yield back.
Chairman WILLIAMS. Gentleman yields back. And I want to
thank the witnesses today for your testimony and for your appear-
ing before us. And without objection, Members have 5 legislative
days to submit additional materials and written questions for the
witnesses to the Chair, which will be forwarded to the witnesses.
So I want to ask the witnesses to please respond promptly. If there
is no further business, again, I want to thank all of you. You did
a great job today. It is a great hearing. I think you see we have
got a really good committee here representing you here in Wash-
ington. So with that, done. Thank you.
[Whereupon, at 12:00 p.m., the committee was adjourned.]
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APPENDIX
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Æ
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File and source
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