Glossary · People and paperwork
Master franchise agreement
In short
This is a contract where a franchisor grants a "master franchisee" the right to develop and sub-franchise within a specific territory. If you're buying a sub-franchisor, this agreement defines your entire business model.
What it means in a deal
If the business you're buying is a sub-franchisor, you'll inherit this agreement. Thoroughly review its terms, including territory rights, development obligations, and your ability to sell sub-franchises. This document dictates your future operations and revenue streams.
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 Master franchise agreement
- How does the SBA evaluate a master franchise agreement for 7(a) loan eligibility if the borrower is a sub-franchisor?
- Can an SBA 7(a) loan finance the purchase of a master franchise or multiple franchise units?
- 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?
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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