The Small Business Administration (SBA) has revived its Franchise Directory, providing significant benefits for franchise systems and their franchisees seeking financing. The directory returned June 1, 2025, as part of the new version of the SBA Loan Origination Policies and Procedures for Lender and Development Company Loan Programs. This development marks the return of a program that was originally launched in 2018 but discontinued in 2023.
The Revival and Its Significance
The Franchise Directory offers substantial advantages to both franchisees seeking financing and franchisors hoping to streamline the financing process. It provides a centralized location for lenders to verify a franchise's eligibility for SBA financing and assess loan approval potential, significantly reducing the paperwork burden for all parties.
Key Points for Franchisors
Franchisors interested in securing inclusion on the revived Franchise Directory should be aware of the following requirements and benefits:
- There is no cost to be listed on the Franchise Directory.
- Franchisor listing is mandatory for franchisees to qualify for SBA loans.
- While the SBA Addendum (Form 2462 or negotiated addendum) will no longer be required, franchisors must provide a certification acknowledging the conditions required for directory listing. Many of these conditions mirror those from the previous Franchise Directory.
- Franchisors previously listed in the directory may sign the certification within a specified period to be reinstated.
- The directory is primarily intended for brands meeting the FTC definition of a "franchise." That said, the SBA will include brands that appear to be franchises but don't meet the technical definition if they are otherwise eligible and request inclusion.
- Franchise systems seeking inclusion must submit their Franchise Disclosure Document (FDD), including the franchise agreement and all other documents required to be signed by a franchisee, to franchise@sba.gov for eligibility determination.
In certain circumstances, the SBA may request the franchise operations manual and other documentation explaining business operations as part of its review.
After the SBA determines a brand is eligible, it will send the Franchisor Certification or Distributor Certification for signature by an authorized representative. Once a properly executed certification is returned to franchise@sba.gov, the SBA will list the brand in the directory and assign an SBA Franchise Identifier Code.
The Takeaway
The revival of the SBA Franchise Directory represents a positive development for franchise systems seeking to streamline the loan approval process for their franchisees. Franchisors should consider taking advantage of this opportunity to facilitate financing options for current and prospective franchisees.
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