Glossary · People and paperwork
In short
The legal and operational agreement between the brand owner (franchisor) and the individual business owner (franchisee). The SBA has specific rules for these relationships.
If you're buying a franchise, the SBA requires that the franchisor-franchisee relationship meets specific criteria to ensure the franchisee has sufficient control over the business. Your lender will verify the franchise is listed on the SBA Franchise Directory or request a franchise agreement addendum.
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.
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