{"ok":true,"canonical_url":"https://dealroom.so/glossary/mandatory-repurchase-option","api_url":"https://dealroom.so/api/public/glossary/mandatory-repurchase-option","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":"mandatory-repurchase-option","term":"Mandatory Repurchase Option","group":"Doing the deal","definition":"This is a clause in some franchise agreements that allows the franchisor to buy back the business from a franchisee under specific conditions, often related to performance or a change of ownership.","what_it_means":"When buying a franchised business, a mandatory repurchase option means the franchisor can force a sale back to them if you trigger certain provisions in the franchise agreement. Your lender will scrutinize this as it impacts collateral. Ensure you understand all triggers and implications before signing the franchise agreement, as it could affect your exit strategy.","url":"https://dealroom.so/glossary/mandatory-repurchase-option","official_sources":[],"related":[{"slug":"franchise-agreement","term":"Franchise agreement","url":"https://dealroom.so/glossary/franchise-agreement"},{"slug":"change-of-ownership","term":"Change of ownership","url":"https://dealroom.so/glossary/change-of-ownership"},{"slug":"non-compete","term":"Non-compete","url":"https://dealroom.so/glossary/non-compete"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"}],"related_questions":[{"question":"Does the SBA 7(a) loan program have an 'Express' option for quicker approvals?","url":"https://dealroom.so/sba-loans/basics/does-the-sba-7-a-loan-program-have-an-express-option-for-quicker-approvals"},{"question":"What environmental due diligence is mandatory for real estate collateral?","url":"https://dealroom.so/sba-7a/questions/what-environmental-due-diligence-is-mandatory-for-real-estate-collateral"},{"question":"Does an unfunded stock option agreement trigger affiliation for SBA 7(a) size standard calculations?","url":"https://dealroom.so/for-lenders/questions/does-an-unfunded-stock-option-agreement-trigger-affiliation-for-sba-7-a-size-standard-calc"},{"question":"When is life insurance on key principals a mandatory loan condition?","url":"https://dealroom.so/for-lenders/questions/when-is-life-insurance-on-key-principals-a-mandatory-loan-condition"},{"question":"Which SBA forms are mandatory for every 7(a) loan application?","url":"https://dealroom.so/for-lenders/questions/which-sba-forms-are-mandatory-for-every-7-a-loan-application"},{"question":"Is a comprehensive business plan mandatory for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/is-a-comprehensive-business-plan-mandatory-for-an-sba-7-a-loan"}]},"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 — Mandatory Repurchase Option","url":"https://dealroom.so/glossary/mandatory-repurchase-option","source_type":"DealRoom Data"}}