{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-if-i-want-to-acquire-a-franchise-that-is-on-the-sba-directory-but-has-multiple-locati","api_url":"https://dealroom.so/api/public/questions/what-if-i-want-to-acquire-a-franchise-that-is-on-the-sba-directory-but-has-multiple-locati","question":"What if I want to acquire a franchise that is on the SBA Directory but has multiple locations, some failing?","topic":"Franchise financing","audience":"borrower","bot_mode":"buyer","short_answer":"Acquiring a franchise with mixed performance across locations can be challenging but is possible if the specific location being acquired is viable and projected to be profitable.","rule":"The SBA evaluates the financial health and management of the specific franchise unit being acquired. While the overall franchise system's performance is considered, the viability of the individual location, its historical financials, and the buyer's business plan for that unit are paramount. The lender will scrutinize the reasons for any failing locations within the system to ensure those issues won't affect the target unit.","example":"A buyer wants to acquire a unit of a nationally recognized sandwich franchise. While other units in the state are struggling, the target unit has consistent revenue and profitability. The lender will focus on the target unit's financials, the buyer's experience, and their plan to maintain profitability, rather than denying based on the broader system's challenges.","what_lenders_check":"Lenders will require detailed financials for the specific unit being acquired and a robust business plan. They conduct extra due diligence on the reasons for failing units in the same system and may require stronger projections or a larger equity injection if the overall system performance is a significant concern.","required_facts":["Specific unit viability","Mixed performance","Individual financials","Business plan","SBA Franchise Directory"],"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 due diligence does the lender perform to ensure a franchise is eligible for SBA 7(a) financing?","url":"https://dealroom.so/sba-7a/questions/what-due-diligence-does-the-lender-perform-to-ensure-a-franchise-is-eligible-for-sba-7-a-f"},{"question":"What are the requirements for a franchisor to be listed on the SBA Franchise Directory?","url":"https://dealroom.so/sba-7a/questions/what-are-the-requirements-for-a-franchisor-to-be-listed-on-the-sba-franchise-directory"},{"question":"What is the typical down payment (equity injection) percentage for a franchise acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-typical-down-payment-equity-injection-percentage-for-a-franchise-acquisition"},{"question":"Are there minimum operating history requirements for a franchise system to be eligible for SBA loans?","url":"https://dealroom.so/sba-7a/questions/are-there-minimum-operating-history-requirements-for-a-franchise-system-to-be-eligible-for"},{"question":"Does the franchisor's financial strength and stability impact my SBA 7(a) loan approval?","url":"https://dealroom.so/sba-7a/questions/does-the-franchisor-s-financial-strength-and-stability-impact-my-sba-7-a-loan-approval"},{"question":"Can I use an SBA 7(a) loan to finance a franchise acquisition not listed on the SBA Franchise Directory?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-finance-a-franchise-acquisition-not-listed-on-the-sba-franchi"}],"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":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"}],"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":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/what-if-i-want-to-acquire-a-franchise-that-is-on-the-sba-directory-but-has-multiple-locati","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."]}