{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-eligibility-requirements-for-a-franchise-agreement-that-lacks-a-form","api_url":"https://dealroom.so/api/public/questions/what-are-the-specific-eligibility-requirements-for-a-franchise-agreement-that-lacks-a-form","question":"What are the specific eligibility requirements for a franchise agreement that lacks a formal review or listing on the SBA Franchise Directory?","topic":"Franchise eligibility","audience":"lender","bot_mode":"lender","short_answer":"For an unlisted franchise, the lender must submit the franchise agreement and all related documents for SBA review to determine eligibility, ensuring it does not contain terms granting the franchisor undue control.","rule":"While the SBA Franchise Directory lists pre-approved franchises, a franchise not on the list can still be eligible. The lender must submit the complete franchise agreement, along with any addenda, to the SBA for a formal review. The SBA will assess whether the agreement complies with 7(a) program requirements, particularly regarding the franchisee's operational independence and control over business assets.","example":"A borrower wants to purchase a new franchise concept not yet on the SBA Directory. The lender collects the full franchise agreement, disclosure document (FDD), and other related contracts. The lender then submits these documents to the SBA for an eligibility determination before processing the loan further.","what_lenders_check":"Lenders must ensure all unlisted franchise agreements undergo a formal SBA review to prevent eligibility issues that could result from franchisor undue control or restrictions on the borrower's ability to operate the business.","required_facts":["Unlisted franchise","SBA Directory","Franchise agreement","Undue control","Eligibility review"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"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"}],"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":"Franchise Eligibility Review","url":"https://dealroom.so/glossary/franchise-eligibility-review"},{"term":"Eligibility Requirements","url":"https://dealroom.so/glossary/eligibility-requirements"},{"term":"Formal Loan Agreement","url":"https://dealroom.so/glossary/formal-loan-agreement"},{"term":"Franchise agreement","url":"https://dealroom.so/glossary/franchise-agreement"},{"term":"Franchise Review Portal","url":"https://dealroom.so/glossary/franchise-review-portal"}],"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-eligibility-requirements-for-a-franchise-agreement-that-lacks-a-form","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."]}