{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/if-a-franchise-agreement-is-listed-on-the-sba-franchise-directory-but-has-an-addendum-or-r","api_url":"https://dealroom.so/api/public/questions/if-a-franchise-agreement-is-listed-on-the-sba-franchise-directory-but-has-an-addendum-or-r","question":"If a franchise agreement is listed on the SBA Franchise Directory but has an addendum or rider, how does a lender assess its eligibility?","topic":"Franchise eligibility","audience":"lender","bot_mode":"lender","short_answer":"The lender must review the addendum or rider to ensure it does not alter the franchise relationship in a way that would make it ineligible for SBA financing.","rule":"Even if the base franchise agreement is on the SBA Franchise Directory, any addenda or riders, particularly those that modify control, ownership, or financial terms, must be scrutinized. The lender must ensure these modifications do not introduce terms that violate SBA's affiliation rules or 'undue control' provisions.","example":"A listed franchise agreement has an addendum that grants the franchisor significant approval rights over the borrower's financing and operational decisions, beyond what's typical. The lender must analyze if these terms constitute 'undue control' by the franchisor, which could render the business ineligible for a 7(a) loan.","what_lenders_check":"Lenders must exercise caution with any modifications to standard franchise agreements. The lender's analysis of addenda must be well-documented, demonstrating that the modified agreement still complies with SBA franchise eligibility requirements.","required_facts":["Franchise Directory","Addendum/Rider","Franchise eligibility","Undue control","Affiliation rules"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 121 - Small Business Size Regulations","7(a) Loan Program Terms, Conditions, and Eligibility"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 121 - Small Business Size Regulations","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-121"},{"title":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"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"},{"question":"How does a lender determine if a franchise agreement contains impermissible control provisions not listed on the Directory?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-if-a-franchise-agreement-contains-impermissible-control-provis"},{"question":"What are the specific requirements for a lender to obtain an approved franchise agreement for a 7(a) loan when the franchise is not listed on the SBA Franchise Directory?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-requirements-for-a-lender-to-obtain-an-approved-franchise-agreement-"},{"question":"Which specific provisions in a franchise agreement raise red flags for undue franchisor control, making it ineligible for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/which-specific-provisions-in-a-franchise-agreement-raise-red-flags-for-undue-franchisor-co"},{"question":"Can an existing franchise location that is not currently listed on the SBA Franchise Directory be eligible for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-an-existing-franchise-location-that-is-not-currently-listed-on-the-sba-franchise-direc"},{"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"}],"related_terms":[{"term":"SBA Franchise Directory","url":"https://dealroom.so/glossary/sba-franchise-directory"},{"term":"Franchise Agreement Addendum","url":"https://dealroom.so/glossary/franchise-agreement-addendum"},{"term":"Franchise Directory","url":"https://dealroom.so/glossary/franchise-directory"},{"term":"SBA's Franchise Directory","url":"https://dealroom.so/glossary/sba-s-franchise-directory"},{"term":"Franchise Addendum","url":"https://dealroom.so/glossary/franchise-addendum"},{"term":"SBA Addendum","url":"https://dealroom.so/glossary/sba-addendum"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/if-a-franchise-agreement-is-listed-on-the-sba-franchise-directory-but-has-an-addendum-or-r","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}