Management’s Business Law Prof. Robert Emerson testifies before US Senate on proposed franchise legislation
GAINESVILLE, Fla. – Huber Hurst Professor of Business Law Robert Emerson was invited to give testimony at the U.S. Senate Committee on Small Business and Entrepreneurship this March. Emerson was later asked to follow up on his testimony with additional questions from the Committee.
The Committee on Small Business and Entrepreneurship is dedicated to researching and investigating challenges of American small business enterprises and has jurisdiction over the Small Business Administration (SBA).
At its hearing on March 16, the Committee discussed an overview of the small-business industry, the role of the SBA and legislative proposals. Specifically, Senator Catherine Cortez Masto has put forth legislation about how the SBA can play a role in protecting franchisee borrowers from harmful practices.
With a focus on franchising in his research, Emerson shared his expert testimony on Senator Cortez Masto’s two proposed bills. Her bill, “SBA Franchise Loan Default Disclosure Act,” has Emerson’s full support, as he views it as an attempt to provide important information and give greater information accessibility to franchisees.
“The FTC, SBA, NASAA, IFA, and probably some other acronyms, certainly could work to make the data much more user-friendly,” he said. “That would be good for everyone. The data out there is really a set of collective experiences. When we look at those experiences, you could say that franchise systems are all feeding off of experience. What a franchise network builds upon.”
Emerson notes that the other bill, “The Small Business Administration Franchise Loan Transparency Act of 2021,” arises from profound concerns about unfairness in franchising.
He testified, in writing, “There are indeed outrageous examples of franchisees misled, defrauded, or otherwise caused great suffering and financial harm due to, at the very least, franchisor incompetence (and often malfeasance).”
However, Emerson expressed reluctance to support a mandated Financial Performance Representation – as a franchisor’s choice to provide, or not provide, this profits information may have already become a signal to prospective franchisees.
Read Emerson’s full testimony on the U.S. Senate Committee on Small Business and Entrepreneurship website. You can also watch Emerson give his testimony live to the Committee. His testimony begins at 34:40.
In the Senate Committee’s follow-up, the committee asked Emerson to respond to seven questions to submit for the record. The questions, from Committee Chairman Ben Cardin and Senator Roger Marshall, ranged from focusing on specific Items in the Act to general ideas about how to help protect franchisees.
Emerson, who submitted his answers to the follow up questions in early May, shared thorough insights on each topic, including his expert opinion on what regulatory or statutory changes might be necessary to help franchisees before entering a franchising agreement and what Congress or federal regulators might do to address the challenges for prospective franchisees.
You can read the questions from the Committee and Emerson’s answers on the Committee on Small Business and Entrepreneurship website upon publication by the U.S. Government Publishing Office.
Emerson came to the Warrington College of Business in 1988. His research interests include comparative law, franchising, ethics, attorneys, contracts and dispute resolution. Emerson is Advisory Editor of the American Business Law Journal, and previously served in various editorial board positions, including its Editor-in-Chief, for five years. He was a reviewer with the American Business Law Journal for more than 20 years and for more than 15 years with Journal of the Academy of Marketing Science.
He has published several dozen articles in top-tier law journals, written a number of books and book chapters, presented at hundreds of conferences and guest-lectured and visited at dozens of universities worldwide, and has testified as an expert in numerous legal proceedings and before Congress (both the House and the Senate). He is an inaugural member (since 2008) – and the sole North American member – of the 12-person academic council for the 100-nation Union Internationale des Huissiers de Justice (the International Union of Judicial Officers). Many of Emerson’s articles are on the Social Science Research Network.
At Warrington, Emerson teaches both undergraduate and graduate students in courses such as Legal Aspects of Technology Management, Business Law, and the Legal Environment of Business. In addition to his professorship at Warrington, Emerson is an Affiliate Professor with the Center for European Studies in the University of Florida College of Liberal Arts and Sciences.
He received his J.D. from Harvard Law School and his bachelor’s degree in political science from Sewanee: The University of the South. He is a member of the bar, having practiced law for several years before becoming a full-time academic. Prof. Emerson remains active in the American Bar Association, especially its Forum on Franchising, ever hopeful that his role as a professor with practical experience, and decades of researching and teaching, help him to advocate for improvements in the law and in the legal profession.
