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Small-Business Aid Package Excludes Many Franchises in Coronavirus Crisis

Many franchises were refused coronavirus stimulus funding because they didn’t meet relief package regulations. 

The affected businesses are mainly structured as tiered franchises, according to The Wall Street Journal. In the tiered model, a franchiser sells regional rights to franchisees, which then sell local units. Another type of franchise omitted were the ones that don’t meet SBA rules regarding leased space.

The SBA is attempting to add additional businesses to the Franchise Directory, but the process takes weeks. Unfortunately, the Paycheck Protection Program has already run out of funds with no timeline as to when the program funds will be replenished. 

Sen. Cory Gardner (R., Colo.) said that the SBA “should immediately and expressly include all franchises in PPP” and that if it doesn’t, Congress needs to make the fix in coming legislation.”