For SBA lenders
Short answer
The SBA determines the
SOP 50 10 requires all franchise agreements to be reviewed for eligibility, even if listed in the directory. A franchise relationship that grants the franchisor too much control over the franchisee's daily operations, management, or financial decisions may cause the franchise to be deemed ineligible, as it undermines the small business's independence.
A lender reviews a franchise agreement for a restaurant concept. The agreement dictates specific vendors, menu items, and pricing, giving minimal autonomy to the franchisee. This level of control could raise eligibility concerns for the SBA.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on franchise eligibility
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