{"ok":true,"canonical_url":"https://dealroom.so/glossary/governance-model","api_url":"https://dealroom.so/api/public/glossary/governance-model","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":"governance-model","term":"Governance model","group":"Reading the business","definition":"The framework of rules, practices, and processes by which a business is directed and controlled. This impacts decision-making, accountability, and the overall management structure you'll inherit.","what_it_means":"Understand the existing governance model during due diligence, especially if acquiring a larger business or one with multiple owners. This includes bylaws, operating agreements, and decision-making authority. For a small business, it often means understanding how the current owner makes decisions and how responsibilities are delegated. You'll need to establish your own model post-acquisition.","url":"https://dealroom.so/glossary/governance-model","official_sources":[],"related":[{"slug":"partnership","term":"Partnership","url":"https://dealroom.so/glossary/partnership"},{"slug":"corporation","term":"Corporation","url":"https://dealroom.so/glossary/corporation"},{"slug":"llc","term":"LLC","url":"https://dealroom.so/glossary/llc"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"}],"related_questions":[{"question":"How does the \"franchise rule\" specifically apply to determine affiliation for an independent dealer or licensee model?","url":"https://dealroom.so/for-lenders/questions/how-does-the-franchise-rule-specifically-apply-to-determine-affiliation-for-an-independent"},{"question":"What are the specific criteria for a new franchise model to be included on the SBA Franchise Directory?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-criteria-for-a-new-franchise-model-to-be-included-on-the-sba-franchi"}]},"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 — Governance model","url":"https://dealroom.so/glossary/governance-model","source_type":"DealRoom Data"}}