{"ok":true,"canonical_url":"https://dealroom.so/glossary/franchise-relationship","api_url":"https://dealroom.so/api/public/glossary/franchise-relationship","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-relationship","term":"Franchise relationship","group":"Reading the business","definition":"This refers to the legal and operational connection between a franchisee and the franchisor. Understanding this relationship is critical because it dictates how you can run the business.","what_it_means":"If you're buying a franchise, the Franchise agreement defines your rights, responsibilities, and restrictions. You must understand the fees, operational mandates, marketing requirements, and transferability clauses. The SBA has specific rules for financing franchises, so ensure the brand is on the SBA Franchise Directory.","url":"https://dealroom.so/glossary/franchise-relationship","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":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"franchise","term":"Franchise","url":"https://dealroom.so/glossary/franchise"},{"slug":"franchise-agreement","term":"Franchise agreement","url":"https://dealroom.so/glossary/franchise-agreement"},{"slug":"franchise-directory","term":"Franchise Directory","url":"https://dealroom.so/glossary/franchise-directory"},{"slug":"franchise-eligibility-requirements","term":"Franchise eligibility requirements","url":"https://dealroom.so/glossary/franchise-eligibility-requirements"}],"related_questions":[{"question":"What specific conditions trigger affiliation due to contractual relationships or franchise agreements?","url":"https://dealroom.so/for-lenders/questions/what-specific-conditions-trigger-affiliation-due-to-contractual-relationships-or-franchise"},{"question":"When does familial relationship between owners of separate businesses trigger affiliation for size?","url":"https://dealroom.so/for-lenders/questions/when-does-familial-relationship-between-owners-of-separate-businesses-trigger-affiliation-"},{"question":"When does a prior contractual relationship create affiliation for 7(a) size determination?","url":"https://dealroom.so/for-lenders/questions/when-does-a-prior-contractual-relationship-create-affiliation-for-7-a-size-determination"},{"question":"When does a contractual relationship between two businesses trigger affiliation for size standard calculations?","url":"https://dealroom.so/for-lenders/questions/when-does-a-contractual-relationship-between-two-businesses-trigger-affiliation-for-size-s"},{"question":"Does a shared familial relationship between business owners automatically trigger affiliation for SBA size standard calculations?","url":"https://dealroom.so/for-lenders/questions/does-a-shared-familial-relationship-between-business-owners-automatically-trigger-affiliat"},{"question":"Are there specific restrictions on the relationship of a non-family gift donor for equity injection?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-restrictions-on-the-relationship-of-a-non-family-gift-donor-for-equity-"}]},"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 relationship","url":"https://dealroom.so/glossary/franchise-relationship","source_type":"DealRoom Data"}}