{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-criteria-for-a-new-franchise-model-to-be-included-on-the-sba-franchi","api_url":"https://dealroom.so/api/public/questions/what-are-the-specific-criteria-for-a-new-franchise-model-to-be-included-on-the-sba-franchi","question":"What are the specific criteria for a new franchise model to be included on the SBA Franchise Directory?","topic":"Franchise eligibility","audience":"lender","bot_mode":"lender","short_answer":"A new franchise model must submit its franchise agreement and all related documents to the SBA for review, demonstrating it meets specific eligibility criteria regarding control and independence.","rule":"For a franchise to be listed on the SBA Franchise Directory, the franchisor must submit its Franchise Disclosure Document (FDD), franchise agreement, and all related addenda to the SBA's Office of Franchise and Business Opportunity. The SBA reviews these documents to ensure the agreement does not grant the franchisor excessive control over the franchisee, compromising the franchisee's independent operation as a small business.","example":"A new frozen yogurt franchise \"Sweet Swirls\" wants its franchisees to be eligible for SBA loans. The franchisor would submit its FDD and franchise agreement to the SBA for review, ensuring clauses related to operational control, purchasing, and marketing allow the franchisee sufficient independence.","what_lenders_check":"Lenders rely on the SBA Franchise Directory for immediate eligibility confirmation. For unlisted franchises, lenders must advise franchisors on the submission process and ensure they understand the SBA's control requirements to avoid eligibility issues.","required_facts":["Franchise agreement review","Franchisor control","Franchisee independence","SBA Franchise Directory","FDD submission"],"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":"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"},{"question":"Can a franchise system with a foreign-based franchisor be eligible for a 7(a) loan if the business operates in the U.S.?","url":"https://dealroom.so/for-lenders/questions/can-a-franchise-system-with-a-foreign-based-franchisor-be-eligible-for-a-7-a-loan-if-the-b"}],"related_terms":[{"term":"Claim on the SBA Guarantee","url":"https://dealroom.so/glossary/claim-on-the-sba-guarantee"},{"term":"Call on the guaranty","url":"https://dealroom.so/glossary/call-on-the-guaranty"},{"term":"Eligibility Criteria","url":"https://dealroom.so/glossary/eligibility-criteria"},{"term":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"},{"term":"New venture","url":"https://dealroom.so/glossary/new-venture"},{"term":"SBA Franchise Team","url":"https://dealroom.so/glossary/sba-franchise-team"}],"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-specific-criteria-for-a-new-franchise-model-to-be-included-on-the-sba-franchi","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."]}