For SBA lenders
Short answer
A franchisor may be affiliated with a franchisee if the franchise agreement or relationship allows the franchisor to exercise control or have an identity of interest over the franchisee's operations or management.
Under 13 CFR 121.103, affiliation can arise from control or identity of interest. If a franchisor exerts significant control over a franchisee's business decisions (beyond standard brand protection), or if there are shared financial interests that make them operate as one entity, affiliation may be triggered, requiring their sizes to be aggregated.
A franchisor not only provides brand guidelines but also dictates all operational policies, purchases, and pricing for its franchisees, effectively controlling their businesses. This level of control would lead to affiliation for size standard purposes.
13 CFR Part 121 - Small Business Size Regulations
SOP 50 10 - Lender and Development Company Loan Programs
Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule
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
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day