{"ok":true,"canonical_url":"https://dealroom.so/glossary/franchise-unit","api_url":"https://dealroom.so/api/public/glossary/franchise-unit","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-unit","term":"Franchise unit","group":"Reading the business","definition":"An individual location or business operation that is part of a larger franchise system. Buyers care because buying a franchise unit means operating under an established brand with specific rules and support, but also ongoing fees and restrictions.","what_it_means":"SBA loans are commonly used for franchise acquisitions, but the franchise system must be listed on the SBA Franchise Directory or receive an SBA addendum. Your lender will require you to sign a new franchise agreement with the franchisor. Understand the ongoing service fee and other obligations.","url":"https://dealroom.so/glossary/franchise-unit","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-directory","term":"Franchise Directory","url":"https://dealroom.so/glossary/franchise-directory"},{"slug":"franchise-agreement","term":"Franchise agreement","url":"https://dealroom.so/glossary/franchise-agreement"},{"slug":"ineligible-business","term":"Ineligible business","url":"https://dealroom.so/glossary/ineligible-business"}],"related_questions":[{"question":"Can an SBA 7(a) loan be used to purchase a multi-unit property where only one unit is for the business?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-purchase-a-multi-unit-property-where-only-one-unit-is-for-t"},{"question":"Can an SBA 7(a) loan finance the purchase of a master franchise or multiple franchise units?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-the-purchase-of-a-master-franchise-or-multiple-franchise-units"},{"question":"If I acquire a franchise, does the SBA approve the specific franchise location?","url":"https://dealroom.so/sba-7a/questions/if-i-acquire-a-franchise-does-the-sba-approve-the-specific-franchise-location"},{"question":"What if a franchise agreement is not listed on the SBA Franchise Directory?","url":"https://dealroom.so/for-lenders/questions/what-if-a-franchise-agreement-is-not-listed-on-the-sba-franchise-directory"},{"question":"What due diligence is required for a franchise not on the SBA Franchise Directory?","url":"https://dealroom.so/sba-7a/questions/what-due-diligence-is-required-for-a-franchise-not-on-the-sba-franchise-directory"},{"question":"How does a lender confirm a franchise is listed on the SBA Franchise Directory?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-confirm-a-franchise-is-listed-on-the-sba-franchise-directory"}]},"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 unit","url":"https://dealroom.so/glossary/franchise-unit","source_type":"DealRoom Data"}}