SBA 7(a) Q&A
Short answer
Look at the brand's real SBA failure rate with enough loan volume to trust it — a brand with hundreds of funded loans and a low charge-off rate has a proven model, whatever a 'best franchise' list says.
SBA doesn't rate franchises, but it funds them, and those loans become public records. The honest safety signal is the share of a brand's loans that charged off over a fixed cohort of years (FY2020–23), not marketing. Pair that failure rate with how many loans the brand has — a clean record over 100+ loans is a system; a clean record over 12 loans is luck.
Before signing a franchise agreement, pull the brand's funded-loan count and cohort failure rate. A brand financing 300+ deals with under 2% charge-offs is a strong pick; the same rate over 20 deals isn't conclusive. Cross-check the typical loan size so you know what lenders actually fund for the brand.
SBA 7(a) loan program
Last checked 2026-06-16. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-16 · SBA sources checked through 2026-06-16. Failure rate = charge-off share of a brand's FY2020–23 SBA loan cohort, from public lending records. 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.
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This page answers “How do I know if a franchise is safe to buy?” for SBA 7(a) business buyers — a short answer, the detail, and official sources — from DealRoom.so SBA Intelligence. It is general information, not legal, tax, or financial advice, and DealRoom is not a lender.
Source: DealRoom.so SBA Intelligence, based on public SBA, lender, franchise, FDIC, and related records. DealRoom is not a lender and does not guarantee financing.
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