Glossary · Reading the business
Franchised Business(Franchise)
In short
This is a business operating under a license from a larger company (the franchisor), using their brand, system, and support. Franchises have specific rules you must follow.
What it means in a deal
SBA has specific eligibility requirements for franchised businesses. Lenders will check the SBA Franchise Directory to ensure the franchise agreement is acceptable. You must understand the franchise agreement's terms, fees, and restrictions before committing to purchase.
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 Franchised Business
- What kind of due diligence is required for a franchised business acquisition with an SBA 7(a) loan?
- Can I use an SBA 7(a) loan to purchase a franchised business with no prior experience in that specific franchise system?
- Does the Small Business Administration (SBA) ever directly lend money to small businesses?
- What is the importance of a detailed business plan for an SBA 7(a) loan application, especially for new or acquiring businesses?
- Are SBA 7(a) loans only for struggling businesses?
- Is the SBA 7(a) program widely used by small businesses?
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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