{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-are-the-eligibility-requirements-for-a-franchise-business-not-listed-on-the-sba-franc","api_url":"https://dealroom.so/api/public/questions/what-are-the-eligibility-requirements-for-a-franchise-business-not-listed-on-the-sba-franc","question":"What are the eligibility requirements for a franchise business not listed on the SBA Franchise Directory?","topic":"Franchise eligibility","audience":"lender","bot_mode":"lender","short_answer":"A franchise not on the SBA Franchise Directory can still be eligible if the lender submits the franchise agreement for SBA review and it meets SBA's eligibility criteria, primarily concerning control.","rule":"If a franchise is not listed on the SBA Franchise Directory, the lender must submit the complete franchise agreement, including all exhibits and amendments, to the SBA for review. The SBA will determine eligibility based on its control standards, ensuring the franchisee has the right to profit from the business and has sufficient operational independence from the franchisor.","example":"A borrower wants to open a new \"Gourmet Hot Dog\" franchise, which is not on the SBA Directory. The lender collects the full franchise agreement and submits it to the SBA for a franchise eligibility determination. The SBA reviews the agreement to confirm the franchisee retains control over daily operations and management.","what_lenders_check":"Lenders must perform thorough due diligence on unlisted franchises. Failure to obtain SBA approval for an unlisted franchise, or underwriting a franchise that grants excessive control to the franchisor, can lead to an ineligible loan and guaranty denial.","required_facts":["Unlisted franchise","Franchise agreement submission","SBA control standards","Operational independence","Eligibility determination"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","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 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"},{"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":"Franchise eligibility requirements","url":"https://dealroom.so/glossary/franchise-eligibility-requirements"},{"term":"SBA Franchise Directory","url":"https://dealroom.so/glossary/sba-franchise-directory"},{"term":"Franchise Directory","url":"https://dealroom.so/glossary/franchise-directory"},{"term":"Not-for-Profit Business","url":"https://dealroom.so/glossary/not-for-profit-business"},{"term":"SBA's Franchise Directory","url":"https://dealroom.so/glossary/sba-s-franchise-directory"},{"term":"Eligibility Requirements","url":"https://dealroom.so/glossary/eligibility-requirements"}],"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/what-are-the-eligibility-requirements-for-a-franchise-business-not-listed-on-the-sba-franc","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."]}