{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-happens-if-a-franchise-is-not-listed-on-the-sba-franchise-directory-at-the-time-of-ap","api_url":"https://dealroom.so/api/public/questions/what-happens-if-a-franchise-is-not-listed-on-the-sba-franchise-directory-at-the-time-of-ap","question":"What happens if a franchise is not listed on the SBA Franchise Directory at the time of application?","topic":"Franchise Eligibility","audience":"lender","bot_mode":"lender","short_answer":"If a franchise is not on the SBA Franchise Directory, the lender must submit the franchise agreement and related documents to the SBA for review and eligibility determination.","rule":"The SBA maintains a Franchise Directory of pre-approved franchise systems. If a franchise is not listed, it means the SBA has not yet reviewed or determined its eligibility. The lender must submit the Franchise Agreement, including all addenda, and any other relevant agreements to the SBA for a review to ensure it meets SBA's eligibility requirements, particularly concerning franchisor control.","example":"A borrower applies for a 7(a) loan to open a new concept smoothie bar franchise not yet listed on the SBA Directory. The lender collects the full franchise agreement, disclosure documents, and any related agreements and submits them to the SBA for an eligibility determination before proceeding with underwriting.","what_lenders_check":"Lenders must ensure all required documents are submitted and carefully review the franchise agreement for any clauses that might violate SBA's 'no control' rule, where the franchisor retains too much control over the borrower's business operations, potentially impacting eligibility.","required_facts":["Franchise Directory status","Franchise agreement review","Franchisor control","Eligibility determination"],"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 specific requirements apply to a franchise system for SBA 7(a) loan eligibility?","url":"https://dealroom.so/for-lenders/questions/what-specific-requirements-apply-to-a-franchise-system-for-sba-7-a-loan-eligibility"},{"question":"What is the lender's process for submitting an unlisted franchise agreement for SBA eligibility review?","url":"https://dealroom.so/for-lenders/questions/what-is-the-lender-s-process-for-submitting-an-unlisted-franchise-agreement-for-sba-eligib"},{"question":"How does the SBA define 'undue control' by a franchisor that could render a franchise ineligible for 7(a) financing?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-define-undue-control-by-a-franchisor-that-could-render-a-franchise-inelig"},{"question":"What issues in a franchise agreement typically lead to a determination of 'undue control' by the franchisor?","url":"https://dealroom.so/for-lenders/questions/what-issues-in-a-franchise-agreement-typically-lead-to-a-determination-of-undue-control-by"},{"question":"What process must a lender follow if a franchise applicant's agreement is not listed on the SBA Franchise Directory?","url":"https://dealroom.so/for-lenders/questions/what-process-must-a-lender-follow-if-a-franchise-applicant-s-agreement-is-not-listed-on-th"},{"question":"What specific provisions in a franchise agreement, if present, would render a franchise ineligible for 7(a) financing?","url":"https://dealroom.so/for-lenders/questions/what-specific-provisions-in-a-franchise-agreement-if-present-would-render-a-franchise-inel"}],"related_terms":[{"term":"SBA Franchise Directory","url":"https://dealroom.so/glossary/sba-franchise-directory"},{"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":"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":"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-happens-if-a-franchise-is-not-listed-on-the-sba-franchise-directory-at-the-time-of-ap","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."]}