Glossary · People and paperwork
Franchisor
In short
The company that grants the right to operate a franchise business using its brand, system, and trademarks. You'll deal directly with them if you're buying a franchised business.
What it means in a deal
If you're acquiring a franchised business, the franchisor must approve you as a new franchisee. Lenders require franchised businesses to be listed on the SBA Franchise Directory. Understand the franchise agreement and ongoing fees before committing to the 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 Franchisor
- What if the franchisor requires specific operational changes that impact the business's profitability?
- When does a franchisor's influence, even without ownership, trigger affiliation for the franchisee?
- What are the requirements for a franchisor to be listed on the SBA Franchise Directory?
- Does the franchisor's financial strength and stability impact my SBA 7(a) loan approval?
- How does the SBA evaluate a franchise agreement not on the directory for acceptable franchisor control provisions?
- What issues in a franchise agreement typically lead to a determination of 'undue control' by the franchisor?
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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