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Congress To Regulate Franchises?

Hard work is currently going on up on Capitol Hill to draft legislation that would prevent a financial calamity like the one that brought America into its worst economic recession since the Great Depression. But in an effort to regulate Wall Street, might Washington also constrain the franchising sector?

That is the fear of the IFA, who have begun to lobby against the Restoring American Financial Stability Act. Under the law, any business that “extends credit to customers, or lets customers pay on extended credit or installment plans for goods or services they purchase” would be subject to government regulation. That’s a great way to rein in big banks, but it inadvertently regulates franchises, many of whom perform the same lending function.

As Entrepreneur magazine writes, this loophole is yet to become enshrined in law, so there’s still time to contact your Senator.

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