How Does the Registry Work?
To take advantage of the Registry, franchisors complete a single worksheet for each of their programs. They certify that their franchise documents comply with SBA’s Eligibility Guidelines, and identify key provisions. The franchisor submits its completed worksheet to FRANdata (the Registry operator), along with an electronic copy of all agreements and an application fee. FRANdata reviews the worksheet and documents, and submits recommendations to an SBA Review Unit, which approves the documents or contacts the franchisor to resolve any outstanding issues.
Upon receipt of SBA Review determinations, FRANdata lists eligible systems on its website, identifying the date of eligibility. FRANdata also loads a copy of the franchise system’s approved agreements on a private website, accessible only to SBA, SBA Participating Lenders and Certified Development Companies.
Franchisors are required to inform FRANdata of any revisions to its agreements in order to maintain its registration.
How Does the Registry Benefit Franchisees?
The Franchise Registry will help SBA and its participating lenders make consistent eligibility decisions, speed access to SBA financial assistance, streamline processing and recognize industry-specific factors during the loan review process. The Registry enables lenders and SBA local offices to verify a franchise system’s lending eligibility through the Internet. This reduces red tape, time and costs for all concerned.
What if the Franchisor is Not Listed on the Registry?
If a franchisor chooses not to participate in the Registry, loan applications by its franchisees will still be reviewed individually by SBA or its lenders. They may take more time to process and may be judged on a variety of other factors that may not be industry-specific and used to approve the loan. You should not construe a franchise system’s presence on or absence from the Registry as either an endorsement by SBA or an indication of the franchise system’s quality or profitability.
