{"ok":true,"canonical_url":"https://dealroom.so/glossary/franchise-fee","api_url":"https://dealroom.so/api/public/glossary/franchise-fee","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"franchise-fee","term":"Franchise fee","group":"Doing the deal","definition":"A payment made by a franchisee to a franchisor for the right to operate a franchised business. Buyers of a franchise will incur this fee, either upfront or ongoing, as part of the total project costs.","what_it_means":"The initial franchise fee is a component of your total project costs for a franchise acquisition. Ensure this fee and any ongoing royalty fees are clearly understood and budgeted for. The SBA has specific requirements for financing franchise acquisitions; confirm the franchise is on the SBA Franchise Directory.","url":"https://dealroom.so/glossary/franchise-fee","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"terms-conditions-eligibility","title":"7(a) Loan Program — Terms, Conditions, and Eligibility","official_url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility","official_label":"View on SBA.gov","authority_tier":5,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/terms-conditions-eligibility"}],"related":[{"slug":"franchise","term":"Franchise","url":"https://dealroom.so/glossary/franchise"},{"slug":"total-project-costs","term":"Total project costs","url":"https://dealroom.so/glossary/total-project-costs"},{"slug":"franchise-directory","term":"Franchise Directory","url":"https://dealroom.so/glossary/franchise-directory"}],"related_questions":[{"question":"Can I use an SBA 7(a) loan to finance a franchise fee for an existing franchise location?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-finance-a-franchise-fee-for-an-existing-franchise-location"},{"question":"Can an SBA 7(a) loan finance the cost of a franchise fee for a new or existing franchise?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-the-cost-of-a-franchise-fee-for-a-new-or-existing-franchise"},{"question":"Can I use an SBA loan to acquire a non-SBA approved franchise if I pay the franchise fee myself?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-loan-to-acquire-a-non-sba-approved-franchise-if-i-pay-the-franchise-fee-m"},{"question":"Does an SBA 7(a) loan cover the initial franchise fee and associated startup costs?","url":"https://dealroom.so/sba-7a/questions/does-an-sba-7-a-loan-cover-the-initial-franchise-fee-and-associated-startup-costs"},{"question":"Can an SBA 7(a) loan cover the cost of a franchise transfer fee in an acquisition?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-cover-the-cost-of-a-franchise-transfer-fee-in-an-acquisition"},{"question":"Are there any other lender-specific fees beyond the SBA guaranty fee and ongoing servicing fee?","url":"https://dealroom.so/sba-7a/questions/are-there-any-other-lender-specific-fees-beyond-the-sba-guaranty-fee-and-ongoing-servicing"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Franchise fee","url":"https://dealroom.so/glossary/franchise-fee","source_type":"DealRoom Data"}}