{"ok":true,"canonical_url":"https://dealroom.so/glossary/franchisor-franchisee-relationship","api_url":"https://dealroom.so/api/public/glossary/franchisor-franchisee-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":"franchisor-franchisee-relationship","term":"Franchisor-franchisee relationship","group":"People and paperwork","definition":"The legal and operational agreement between the brand owner (franchisor) and the individual business owner (franchisee). The SBA has specific rules for these relationships.","what_it_means":"If you're buying a franchise, the SBA requires that the franchisor-franchisee relationship meets specific criteria to ensure the franchisee has sufficient control over the business. Your lender will verify the franchise is listed on the SBA Franchise Directory or request a franchise agreement addendum.","url":"https://dealroom.so/glossary/franchisor-franchisee-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":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"}],"related_questions":[{"question":"When does a franchisor's influence, even without ownership, trigger affiliation for the franchisee?","url":"https://dealroom.so/for-lenders/questions/when-does-a-franchisor-s-influence-even-without-ownership-trigger-affiliation-for-the-fran"},{"question":"What specific circumstances allow a franchisor to be considered affiliated with a franchisee for SBA size purposes?","url":"https://dealroom.so/for-lenders/questions/what-specific-circumstances-allow-a-franchisor-to-be-considered-affiliated-with-a-franchis"},{"question":"How does the SBA determine if a franchisor has \"control\" over a franchisee for affiliation purposes, beyond standard agreements?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-determine-if-a-franchisor-has-control-over-a-franchisee-for-affiliation-p"},{"question":"How does the SBA determine if a franchise agreement grants the franchisor 'undue control' over the franchisee, impacting 7(a) eligibility?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-determine-if-a-franchise-agreement-grants-the-franchisor-undue-control-ov"},{"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"}]},"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 — Franchisor-franchisee relationship","url":"https://dealroom.so/glossary/franchisor-franchisee-relationship","source_type":"DealRoom Data"}}