Glossary · People and paperwork
Franchise Agreement Addendum
In short
A required document for SBA loans, signed by the franchisor, that modifies certain terms of an existing franchise agreement to comply with SBA eligibility rules.
What it means in a deal
For SBA financing, your lender will require a specific addendum that ensures the franchisor does not have "negative control" over the franchisee's operations. This addendum must be signed by the franchisor before loan approval if the franchise is not already on the SBA Franchise Directory or requires clarification.
Official sources
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.
Related terms
Common questions about Franchise Agreement Addendum
- If a franchise agreement is listed on the SBA Franchise Directory but has an addendum or rider, how does a lender assess its eligibility?
- What if a franchise agreement is not listed on the SBA Franchise Directory?
- What is required if a franchise agreement is not listed on the SBA Franchise Directory?
- What specific provisions in a franchise agreement, if present, would render a franchise ineligible for 7(a) financing?
- What if a franchise system is not listed on the SBA Franchise Directory but the agreement is SBA-compliant?
- What process must a lender follow if a franchise applicant's agreement is not listed on the SBA Franchise Directory?
Defined by CapBench 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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