1. Short title This Act may be cited as the Small Business Administration Franchise Loan Transparency Act of 2017 . 2. Findings and purpose (a) Findings Congress makes the following findings: (1) Franchise businesses represent a large and growing segment of the retail and service businesses of the United States and are rapidly replacing more traditional forms of small business ownership in the economy of the United States. (2) The Small Business Administration ( SBA ) guarantees much of the financing available in franchising. (3) The SBA requires pro forma projections, including projected revenue, for the first year of operations of a franchise as part of the standard operating requirements for a franchisee to qualify for financing. (4) On July 13, 2011, the SBA Office of Inspector General published an audit (Report No. 11–16) on loans made under section 7(a) of the Small Business Act to Huntington Learning Center franchises where first year revenue projections were all significantly inflated. (5) On July 2, 2013, the SBA Office of Inspector General published an audit evaluation (Report No. 13–17) showing that the SBA needed to improve the management of its 7(a) loan portfolio risk, specifically with certain franchise brands that had exceptionally high default rates that continued to receive guaranteed loans from the SBA. (6) In September 2013, the Government Accountability Office published a study (GAO–13–759) showing that over the 10-year period from 2003 to 2012, 28 percent of 7(a) loans to franchises required a guarantee payment. The study was based on 32,323 loans totaling $10.6 billion, which required $1.5 billion in guarantee payments. The report specifically stated, Potential franchisees should include first-year revenue estimates in their SBA loan applications. However, this information is not necessarily available to potential franchisees in the franchise organization’s disclosure document. . (7) Franchise companies most often collect royalties based on gross revenue