II 

114TH CONGRESS 

1ST SESSION S. 1870 

To amend the Small Business Act to require the Administrator of the Small 

Business Administration to carry out a pilot program on issuing grants 

to eligible veterans to start or acquire qualifying businesses, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 27, 2015 

Mr. MORAN (for himself and Mr. TESTER) introduced the following bill; which 

was read twice and referred to the Committee on Small Business and Entrepreneurship 

A BILL 

To amend the Small Business Act to require the Administrator of the Small Business Administration to carry 

out a pilot program on issuing grants to eligible veterans 

to start or acquire qualifying businesses, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Veterans Entrepre5 neurial Transition Act of 2015’’ or the ‘‘VET Act of 

6 2015’’. 


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1 SEC. 2. VETERANS SMALL BUSINESS ENTREPRENEURSHIP 

2 PILOT PROGRAM. 

3 Section 32 of the Small Business Act (15 U.S.C. 

4 657b) is amended by adding at the end the following: 

5 ‘‘(g) VETERANS SMALL BUSINESS ENTREPRENEUR6 SHIP PILOT PROGRAM.— 

7 ‘‘(1) PILOT PROGRAM REQUIRED.— 

8 ‘‘(A) IN GENERAL.—Not later than 90 

9 days after the date of enactment of this sub10 section, the Administrator, in consultation with 

11 the Advisory Committee and the Secretary of 

12 Veterans Affairs, shall begin carrying out a 

13 pilot program to assess the feasibility and ad14 visability of making grants to eligible veterans 

15 to start or acquire a qualifying business enter16 prise. 

17 ‘‘(B) PROMOTION OF EFFICIENCY.—In 

18 carrying out the pilot program, the Adminis19 trator shall ensure, to the maximum extent 

20 practicable, that the pilot program promotes ef21 ficiency, accountability, and competition. 

22 ‘‘(C) LIST OF CATEGORIES OF BUSINESS

23 ENTERPRISES.—The Administrator, in con24 sultation with the Advisory Committee, shall by 

25 rule establish a list of categories of business en26 terprises that the Administrator determines to 


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1 be qualifying business enterprises for purposes 

2 of the pilot program, which shall include— 

3 ‘‘(i) a small business concern; 

4 ‘‘(ii) a franchise business enterprise; 

5 and 

6 ‘‘(iii) any other category of business 

7 enterprise that the Administrator, in con8 sultation with the Advisory Committee, de9 termines is appropriate and in accordance 

10 with the purposes of the pilot program. 

11 ‘‘(D) NUMBER OF GRANTS.—Under the 

12 pilot program, the Administrator may make 

13 grants in accordance with paragraph (4) to not 

14 more than 250 eligible veterans to start or ac15 quire a qualifying business enterprise. 

16 ‘‘(E) GEOGRAPHIC DIVERSITY.—In making 

17 grants under the pilot program, the Adminis18 trator shall ensure geographic diversity among 

19 the veterans who receive the grants. 

20 ‘‘(F) DURATION.—The Administrator shall 

21 carry out the pilot program during the 3-year 

22 period beginning on the date on which the Ad23 ministrator begins carrying out the pilot pro24 gram. 

25 ‘‘(2) APPLICATION.— 


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1 ‘‘(A) IN GENERAL.—An eligible veteran de2 siring a grant under the pilot program shall 

3 submit an application— 

4 ‘‘(i) to the Administrator in the form 

5 and containing the information as the Ad6 ministrator may require, including the in7 formation described in subparagraph (B); 

8 and 

9 ‘‘(ii) not later than 1 year before the 

10 date on which the pilot program terminates 

11 under paragraph (1)(F). 

12 ‘‘(B) DOCUMENTATION REQUIREMENTS.— 

13 The Administrator, in considering an applica14 tion from an eligible veteran for a grant under 

15 the pilot program, may not approve the applica16 tion unless the application includes the fol17 lowing: 

18 ‘‘(i) A description of the use of the 

19 grant amount, including an identification 

20 and description of the qualifying business 

21 enterprise. 

22 ‘‘(ii) A description of the expected re23 turn on investment resulting from the 

24 grant amounts. 


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1 ‘‘(iii) A certification that the eligible 

2 veteran applying for the grant— 

3 ‘‘(I) shall complete the education 

4 and training relevant to the ownership 

5 and operation of the qualifying busi6 ness enterprise described in para7 graphs (3)(A) and (3)(B); and 

8 ‘‘(II) understands that the eligi9 ble veteran may not receive amounts 

10 under a grant under the pilot pro11 gram until after the eligible veteran 

12 has completed the required education 

13 and training relevant to the ownership 

14 and operation of the qualifying busi15 ness enterprise described in para16 graphs (3)(A) and (3)(B). 

17 ‘‘(iv) Such certifications as the Ad18 ministrator, in consultation with the Advi19 sory Committee, shall by rule require, in20 cluding— 

21 ‘‘(I) for a business enterprise in 

22 operation on the date of the applica23 tion, evidence that the Administrator, 

24 in consultation with the Advisory 


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1 Committee, determines appropriate 

2 of— 

3 ‘‘(aa) good standing; 

4 ‘‘(bb) profitable operation; 

5 and 

6 ‘‘(cc) guarantees relating to 

7 the purchase of the enterprise; 

8 ‘‘(II) for a franchise business en9 terprise, evidence that the Adminis10 trator, in consultation with the Advi11 sory Committee, determines appro12 priate of— 

13 ‘‘(aa) compliance with appli14 cable State and Federal laws on 

15 franchises; and 

16 ‘‘(bb) training in conforma17 tion with the industry standard; 

18 and 

19 ‘‘(III) for a startup, or an enter20 prise that is otherwise not in oper21 ation at the time of the application, a 

22 proposal for the operation of that en23 terprise that leads to profitable oper24 ation within a reasonable timeframe. 


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1 ‘‘(v) A certification that the eligible 

2 veteran applying for the grant understands 

3 that the eligible veteran may not receive 

4 amounts under the grant until after the 

5 business plan of the eligible veteran has 

6 been approved under the procedures de7 scribed in paragraph (3)(C)(ii). 

8 ‘‘(vi) A certification that the eligible 

9 veteran— 

10 ‘‘(I) has been truthful about the 

11 employment status of the eligible vet12 eran; and 

13 ‘‘(II) understands that the eligi14 ble veteran will be prohibited from 

15 participating in the pilot program if 

16 the certification described in subclause 

17 (I) is determined to be untrue. 

18 ‘‘(C) GROUP APPLICATIONS.—The Admin19 istrator may authorize a group of eligible vet20 erans to apply as a group under the pilot pro21 gram. The group shall be treated as a single eli22 gible veteran under the pilot program, except 

23 that the maximum amount of the grant shall be 

24 calculated by multiplying the maximum amount 


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1 under paragraph (4)(A) by the number of mem2 bers of the group. 

3 ‘‘(3) ENTREPRENEURSHIP TRAINING.— 

4 ‘‘(A) IN GENERAL.—Each eligible veteran 

5 receiving a grant under the pilot program shall 

6 complete an entrepreneurship readiness pro7 gram approved by the Administrator that is de8 signed to prepare the eligible veteran for, and 

9 lead to the immediate subsequent ownership 

10 and management by the eligible veteran of, a 

11 qualifying business enterprise. 

12 ‘‘(B) APPROVED PROGRAMS.—An approved 

13 program described in subparagraph (A) may in14 clude a program— 

15 ‘‘(i) available through a small business 

16 development center; 

17 ‘‘(ii) approved by the Administrator 

18 for entrepreneurship training; 

19 ‘‘(iii) approved by the Secretary of 

20 Veterans Affairs for entrepreneurship 

21 training; 

22 ‘‘(iv) available through the Transition 

23 Assistance Program of the Department of 

24 Defense; 


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1 ‘‘(v) available through a women’s 

2 business center, as described in section 29; 

3 ‘‘(vi) available through a Veterans 

4 Business Outreach Center, as described in 

5 subsection (d); 

6 ‘‘(vii) available through the SCORE 

7 program authorized by section 8(b)(1); or 

8 ‘‘(viii) approved by the Administrator, 

9 in consultation with the Advisory Com10 mittee, as appropriate because of the ex11 pertise the program offers relating to a 

12 certain type of business enterprise. 

13 ‘‘(C) BUSINESS PLAN.— 

14 ‘‘(i) CONTENTS.—An eligible veteran 

15 receiving a grant under the pilot program 

16 shall prepare a business plan, which shall 

17 include— 

18 ‘‘(I) a description of how the 

19 qualifying business enterprise will 

20 achieve profitable operation within a 

21 reasonable timeframe; 

22 ‘‘(II) an assessment of relevant— 

23 ‘‘(aa) economic indicators; 

24 ‘‘(bb) consumer data; 


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1 ‘‘(cc) production and sales 

2 data; and 

3 ‘‘(dd) market or industry 

4 analysis; and 

5 ‘‘(III) other information that the 

6 Administrator, in consultation with 

7 the Advisory Committee, determines is 

8 appropriate. 

9 ‘‘(ii) APPROVAL PROCEDURE.— 

10 ‘‘(I) APPROVAL BY ADVISOR.—If 

11 an advisor approves the business plan 

12 prepared by the eligible veteran, the 

13 Associate Administrator for Veterans 

14 Business Development of the Adminis15 tration— 

16 ‘‘(aa) shall review the busi17 ness plan; and 

18 ‘‘(bb) may reverse the ap19 proval of the business plan and 

20 require that the eligible veteran 

21 continue to consult with the advi22 sor to develop and resubmit the 

23 business plan. 

24 ‘‘(II) DISAPPROVAL BY ADVI25 SOR.—If an advisor does not approve 


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1 the business plan prepared by an eli2 gible veteran, the Associate Adminis3 trator for Veterans Business Develop4 ment of the Administration, upon ap5 peal by the eligible veteran, may re6 verse the decision of the advisor and 

7 approve the business plan. 

8 ‘‘(4) GRANT TERMS AND CONDITIONS.— 

9 ‘‘(A) MAXIMUM GRANT AMOUNT AND ADDI10 TIONAL ASSISTANCE.— 

11 ‘‘(i) IN GENERAL.—Subject to para12 graph (2)(C), the maximum amount that 

13 an eligible veteran may receive under the 

14 pilot program shall not exceed an amount 

15 equal to the sum of— 

16 ‘‘(I) the maximum grant amount 

17 specified in clause (ii); 

18 ‘‘(II) the amount equal to the 

19 product obtained by multiplying— 

20 ‘‘(aa) the amount of addi21 tional assistance to which the eli22 gible veteran is entitled under 

23 clause (iii)(II); by 


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1 ‘‘(bb) the number of months 

2 that the eligible veteran partici3 pates in the pilot program; and 

4 ‘‘(III) the amount of training as5 sistance received by the eligible vet6 eran in clause (iv). 

7 ‘‘(ii) MAXIMUM GRANT AMOUNT.—The 

8 maximum grant amount specified in this 

9 clause is the following: 

10 ‘‘(I) In the case of an eligible vet11 eran entitled to educational assistance 

12 under chapter 33 of title 38, United 

13 States Code, the amount equal to the 

14 product obtained by multiplying— 

15 ‘‘(aa) the number of months 

16 of educational assistance to 

17 which the eligible veteran is enti18 tled on the date that the eligible 

19 veteran submits an application; 

20 by 

21 ‘‘(bb) the pro rata monthly 

22 rate of the amount that the eligi23 ble veteran is entitled to under 

24 paragraph (1)(A)(ii)(II) of sec25 tion 3313(c) of that title, subject 


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1 to paragraphs (2) through (7) of 

2 that section. 

3 ‘‘(II) In the case of an eligible 

4 veteran entitled to educational assist5 ance under chapter 30 of title 38, 

6 United States Code, the amount equal 

7 to the product obtained by multi8 plying— 

9 ‘‘(aa) the number of months 

10 of educational assistance to 

11 which the eligible veteran is enti12 tled on the date that the eligible 

13 veteran submits an application; 

14 by 

15 ‘‘(bb) the rate in effect 

16 under section 3015(a)(1) of that 

17 title. 

18 ‘‘(iii) ADDITIONAL ASSISTANCE.— 

19 ‘‘(I) PERIOD OF ELIGIBILITY.— 

20 An eligible veteran shall receive the 

21 amount described in subclause (II) for 

22 each month that the eligible veteran 

23 participates in the pilot program. 

24 ‘‘(II) AMOUNT.—The amount of 

25 the additional assistance specified in 


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1 this subclause is an amount, paid to 

2 the eligible veteran on a monthly 

3 basis, equal to the product obtained 

4 by multiplying— 

5 ‘‘(aa) the monthly amount of 

6 the basic allowance for housing 

7 payable under section 403 of title 

8 37, United States Code, for a 

9 member with dependents in pay 

10 grade E–5 residing in the mili11 tary housing area that encom12 passes all or the majority portion 

13 of the ZIP code area in which is 

14 located the residence of the eligi15 ble veteran (similar to the cal16 culation made under section 

17 3313(c)(1)(B)(i)(I) of title 38, 

18 United States Code); by— 

19 ‘‘(bb)(AA) in the case of an 

20 eligible veteran who, as of the 

21 date on which the eligible veteran 

22 applies for a grant under this 

23 subsection, has no employment 

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1 gible veteran seeks a grant under 

2 this subsection, 1; or 

3 ‘‘(BB) in the case of an eli4 gible veteran who is not described 

5 in subitem (AA), 0.5. 

6 ‘‘(iv) TRAINING ASSISTANCE.—Upon 

7 application by an eligible veteran receiving 

8 a grant under the pilot program, the Ad9 ministrator may pay for the cost, if appli10 cable, of an approved program described in 

11 paragraph (3)(B)(viii). 

12 ‘‘(B) DISBURSEMENT.—The amount of a 

13 grant made under the pilot program shall be 

14 disbursed to an eligible veteran— 

15 ‘‘(i) in installments, in accordance 

16 with the procedures described in subpara17 graph (C); 

18 ‘‘(ii) only after the eligible veteran 

19 presents documentation proving that the 

20 eligible veteran has completed the required 

21 entrepreneurship training described in 

22 paragraphs (3)(A) and (3)(B); and 

23 ‘‘(iii) only after the business plan of 

24 the eligible veteran has been approved 


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1 under the procedures described in para2 graph (3)(C)(ii). 

3 ‘‘(C) INSTALLMENT PAYMENTS.—The 

4 amount described in subparagraph (A)(ii) shall 

5 be paid to the eligible veteran in installments on 

6 a pro rata basis with each installment being 

7 paid to the eligible veteran— 

8 ‘‘(i) not earlier than 3 months after 

9 the date of the payment of the most recent 

10 installment to the eligible veteran; 

11 ‘‘(ii) not later than 12 months after 

12 the date of the payment of the most recent 

13 installment to the eligible veteran; and 

14 ‘‘(iii) only after the eligible veteran 

15 has met milestones established in the busi16 ness plan of the eligible veteran. 

17 ‘‘(5) USE OF GRANT AMOUNTS.—An eligible 

18 veteran who receives a grant under the pilot pro19 gram may use the amount of the grant— 

20 ‘‘(A) in accordance with the limitations 

21 that the Administrator, in consultation with the 

22 Advisory Committee, may by rule establish; and 

23 ‘‘(B) for purposes related to starting or ac24 quiring a qualifying business enterprise that the 

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1 sory Committee, determines are appropriate, in2 cluding— 

3 ‘‘(i) purchasing goods or services nec4 essary for the creation or operation of a 

5 qualifying business enterprise; 

6 ‘‘(ii) funding a project that is directed 

7 toward any economic development objective 

8 described under section 501(d) of the 

9 Small Business Investment Act of 1958 

10 (15 U.S.C. 695(d)); and 

11 ‘‘(iii) acquiring a qualifying business 

12 enterprise. 

13 ‘‘(6) REPORT.— 

14 ‘‘(A) IN GENERAL.—Not later than 2 years 

15 after the date on which the pilot program is 

16 commenced, the Administrator shall submit to 

17 the Committee on Small Business and Entre18 preneurship and the Committee on Veterans’ 

19 Affairs of the Senate and the Committee on 

20 Small Business and the Committee on Vet21 erans’ Affairs of the House of Representatives 

22 a report analyzing the feasibility and effective23 ness of the pilot program. 

24 ‘‘(B) CONTENTS.—The report submitted 

25 under subparagraph (A) shall include— 


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1 ‘‘(i) an assessment of the pilot pro2 gram; 

3 ‘‘(ii) a survey containing— 

4 ‘‘(I) the number of grantees 

5 under the pilot program; and 

6 ‘‘(II) the number of the grantees 

7 under the pilot program that partici8 pated in each of the training pro9 grams described in subparagraphs (A) 

10 and (B) of paragraph (3); 

11 ‘‘(iii) recommendations regarding 

12 whether any aspect of the pilot program 

13 should be made a permanent authority, 

14 and, if so, the means to ensure— 

15 ‘‘(I) geographic and demographic 

16 diversity among the eligible veterans 

17 who receive the grants under the per18 manent authority; and 

19 ‘‘(II) diversity in the types of 

20 qualifying business enterprises for 

21 which eligible veterans may receive 

22 grants under the pilot program; 

23 ‘‘(iv) an assessment regarding wheth24 er the grants distributed under the pilot 

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1 stallments or with a one-time, lump sum 

2 payment; 

3 ‘‘(v) an assessment of the additional 

4 assistance made available under the pilot 

5 program, including the accountability sur6 rounding the availability of additional as7 sistance; 

8 ‘‘(vi) an analysis of the procedures for 

9 approving a business plan and a rec10 ommendation regarding ways, if necessary, 

11 to improve the procedures; and 

12 ‘‘(vii) a recommendation regarding 

13 ways, if necessary, to improve the account14 ability of advisors. 

15 ‘‘(7) NO EFFECT ON TIME LIMITATION FOR USE

16 OF ENTITLEMENT TO EDUCATIONAL ASSISTANCE.— 

17 Nothing in this subsection shall be construed to 

18 modify any time limitation or period during which 

19 an individual is entitled to educational assistance 

20 under chapter 30 or 33 of title 38, United States 

21 Code. 

22 ‘‘(8) DEFINITIONS.—In this subsection: 

23 ‘‘(A) ADVISOR.—The term ‘advisor’ means 

24 a person— 


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1 ‘‘(i) affiliated with an entrepreneur2 ship or training and curricula program de3 scribed in paragraphs (3)(A) and (3)(B); 

4 ‘‘(ii) who may assist an eligible vet5 eran with the preparation and approval of 

6 a business plan; and 

7 ‘‘(iii) who is approved to serve as an 

8 advisor by the Administrator, in consulta9 tion with the Advisory Committee. 

10 ‘‘(B) ADVISORY COMMITTEE.—The term 

11 ‘Advisory Committee’ means the Advisory Com12 mittee on Veterans Business Affairs established 

13 under section 203 of the Veterans Entrepre14 neurship and Small Business Development Act 

15 of 1999 (15 U.S.C. 657b note). 

16 ‘‘(C) BUSINESS PLAN.—The term ‘business 

17 plan’ means a plan prepared by an eligible vet18 eran for the operation of a qualifying business 

19 enterprise that shall be— 

20 ‘‘(i) prepared— 

21 ‘‘(I) while the eligible veteran 

22 participates in an approved training 

23 program described in paragraphs 

24 (3)(A) and (3)(B); and 


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1 ‘‘(II) with the assistance of an 

2 advisor; and 

3 ‘‘(ii) consistent with the guidelines 

4 and recommendations provided by the 

5 Business Plan Tool of the Administration. 

6 ‘‘(D) ELIGIBLE VETERAN.—The term ‘eli7 gible veteran’ means an individual who— 

8 ‘‘(i) is— 

9 ‘‘(I) a veteran; or 

10 ‘‘(II) a member of the Armed 

11 Forces who— 

12 ‘‘(aa) is currently retiring or 

13 separating from the Armed 

14 Forces and has a service ap15 proved retirement or separation 

16 packet; or 

17 ‘‘(bb) has last been honor18 ably discharged from active duty 

19 service in the Armed Forces; 

20 ‘‘(ii) has completed not less than— 

21 ‘‘(I) 36 months of active duty 

22 service in the Armed Forces (other 

23 than active duty service for training); 

24 or 


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1 ‘‘(II) 24 months of active duty 

2 service in the Armed Forces (other 

3 than active duty service for training) 

4 before being discharged or separated 

5 for a service-connected disability, as 

6 that term is defined in section 101 of 

7 title 38, United States Code; and 

8 ‘‘(iii) is entitled to educational assist9 ance under chapter 30 or 33 of title 38, 

10 United States Code. 

11 ‘‘(E) FRANCHISE BUSINESS ENTER12 PRISE.—The term ‘franchise business enter13 prise’ means any continuing commercial rela14 tionship or arrangement, regardless of the title 

15 given the relationship or arrangement, under 

16 which the terms of the offer or contract specify, 

17 or the franchise seller promises or represents, 

18 orally or in writing, that— 

19 ‘‘(i) the franchisee will obtain the 

20 right to— 

21 ‘‘(I) operate a business that is 

22 identified or associated with the trade23 mark of the franchisor; or 

24 ‘‘(II) offer, sell, or distribute 

25 goods, services, or commodities that 


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1 are identified or associated with the 

2 trademark of the franchisor; 

3 ‘‘(ii) the franchisor may— 

4 ‘‘(I) exert, or has authority to 

5 exert, a significant degree of control 

6 over the method of operation of the 

7 franchisee; or 

8 ‘‘(II) provide significant assist9 ance in the method of operation of the 

10 franchisee; and 

11 ‘‘(iii) as a condition of obtaining or 

12 commencing operation of the franchise 

13 business enterprise, the franchisee makes a 

14 required payment or commits to make a 

15 required payment to the franchisor or the 

16 affiliate of the franchisor. 

17 ‘‘(F) FRANCHISEE.—The term ‘franchisee’ 

18 means any person who is granted a franchise 

19 business enterprise. 

20 ‘‘(G) FRANCHISOR.—The term 

21 ‘franchisor’— 

22 ‘‘(i) means any person who grants a 

23 franchise business enterprise and partici24 pates in the franchise relationship; and 

25 ‘‘(ii) includes subfranchisors. 


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1 ‘‘(H) PILOT PROGRAM.—The term ‘pilot 

2 program’ means the pilot program established 

3 under paragraph (1)(A). 

4 ‘‘(I) QUALIFYING BUSINESS ENTER5 PRISE.—The term ‘qualifying business enter6 prise’ means a business included in the list of 

7 categories of business enterprises established 

8 under paragraph (1)(C). 

9 ‘‘(J) STARTUP.—The term ‘startup’ means 

10 a business enterprise that— 

11 ‘‘(i) is not yet in existence; or 

12 ‘‘(ii) has been in existence for not 

13 more than 5 years. 

14 ‘‘(K) SUBFRANCHISOR.—The term 

15 ‘subfranchisor’ means a person who functions 

16 as a franchisor by engaging in both pre-sale ac17 tivities and post-sale performance.’’. 

Æ 


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