Glossary · Doing the deal
In short
The upfront payment made to a franchisor to acquire the rights to operate a franchise business. This fee is a component of your total project costs and is an eligible use of 7(a) loan funds.
When buying a franchise, this fee is a significant part of your capital outlay. The SBA allows 7(a) loan proceeds to cover this cost, along with working capital, equipment, and other eligible expenses. Ensure you budget for it accurately as part of your total project costs.
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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