SBA: Franchise Registry
By WORLDLawDirect [January 17th, 2011]
Attention POTENTIAL FRANCHISEES:
When evaluating a franchise opportunity, look for system eligibility with the FRANCHISE REGISTRY. If the franchise system is eligible for this program, you will receive expedited loan processing through the U.S. Small Business Administration (SBA). If the system is not listed, you should immediately contact them and inquire as to their eligibility status with the SBA.
How do I apply to the Registry?
Applying to the Franchise Registry requires to simple steps:
- Complete the online worksheet located at www.franchiseregistry.com/worksheet, and
- Submit your franchise agreement to FRANdata in electronic form - Word or Text files. Agreements may be submitted either by mail on a CD/diskette, or by e-mail to firstname.lastname@example.org
Who reviews my franchise agreement?
FRANdata conducts the initial review of the franchise agreement, and submits a recommendation to the SBA. The SBA makes all final eligibility determinations.
How long does the review process take?
The process will be completed within 3 weeks from the time FRANdata receives the following: 1-Completed Worksheet, 2-Franchise Agreement in electronic format, 3-Application Fee.
How do lenders know that my system is on The Registry?
When a franchisee applies for SBA financing, you will need to provide the franchisee with a certification form. If the version of the agreement that the franchisee will sign is the same as or non-materially different from the version approved by the Franchise Registry, you will provide a "Certificate of No Change or Non-Material Change," accessible at: www.franchiseregistry.com/Forms/CertificationofNoChange.htm
The lender may then rely upon that certificate and your listing on the Franchise Registry as the SBA's determination that your franchise system is eligible. Approved lenders also have access to your franchise agreement through the Franchise Registry Web site.
What is the difference between a "non-material" and "material" change?
A non-material change is one that does not concern the SBA eligibility guidelines. (The guidelines may be accessed by visiting www.franchiseregistry.com/worksheet, and clicking on the link where indicated.) Conversely, a material change is one that concerns any of the identified in the eligibility guidelines - control, leasing, renewal, transfer, default and termination.
Does one initial registration cover multiple programs?
No. The franchise system must submit a separate registration for each program. For example, a franchisor must register a cart/kiosk program, a co-branding program, and its standard program separately.