What if your franchise brand is not on the SBA Directory?
Short answer
If the brand meets the Federal Trade Commission (FTC) definition, the application cannot proceed until it is listed. The franchisor submits its agreement, disclosure document and other required documents to franchise@sba.gov for review. Source: SOP 50 10 8.1, Sec. A, Ch. 1, Para. G.
The loan stops until the brand is added, if it meets the FTC definition of a franchise. Under SOP 50 10 8.1, Sec. A, Ch. 1, Para. G, lenders cannot submit a non-delegated application or approve a delegated loan.
How a brand gets added
- The franchisor sends the agreement, its Franchise Disclosure Document if applicable, and all other documents franchisees must sign to franchise@sba.gov.
- If someone else submits, the franchisor's contact name and email must be included.
- SBA reviews new brands in the order received and may ask for the operations manual.
- If SBA finds the brand eligible, it sends a Franchisor or Distributor Certification to be signed and returned.
- SBA then lists the brand and assigns an identifier code.
If the brand may not be a franchise
If it does not meet the FTC definition, the lender explains that finding in the credit memo on a non-delegated loan. SBA's Franchise Team makes the final call. On a delegated 7(a) loan, the lender bears the risk of an incorrect determination. On a delegated 504 loan, the lender must send the documents to SBA first.
If SBA says no
A franchisor can appeal a refusal to list through franchise@sba.gov, and the SBA Franchise Committee reviews it. There is no appeal from a final decision by the Associate General Counsel for Litigation.
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Tell us the amount you need and what it is for. We refer you to lenders that may fund businesses like yours, and it costs you nothing.
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