SBA 7(a) Q&A
Short answer
The SBA's Office of Franchise and Business Opportunity will meticulously review unusual clauses to ensure they do not grant the franchisor undue control or restrict the franchisee's operational independence, which could affect eligibility.
Any unusual or non-standard clauses in a franchise agreement, especially those pertaining to termination or transfer of ownership, will be closely scrutinized by the SBA. The goal is to ensure the franchisee maintains sufficient operational independence and that the agreement doesn't create impermissible affiliation or other eligibility issues.
A franchise agreement contains a clause allowing the franchisor to veto any sale of the franchisee's business, even to qualified buyers. The SBA reviews this to ensure it doesn't represent an impermissible level of control or an unreasonable restriction on the franchisee's ability to exit.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
13 CFR Part 121 - Small Business Size Regulations
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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 financing
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