Glossary · Reading the business
In short
This refers to the legal and operational connection between a franchisee and the franchisor. Understanding this relationship is critical because it dictates how you can run the business.
If you're buying a franchise, the Franchise agreement defines your rights, responsibilities, and restrictions. You must understand the fees, operational mandates, marketing requirements, and transferability clauses. The SBA has specific rules for financing franchises, so ensure the brand is on the SBA Franchise Directory.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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