SBA Approved Franchises

Understanding that all small businesses pose some risk, franchises remain a good option for those looking for an established brand rather than doing a start-up that carries a much higher degree of uncertainty. That begs the question of how a person can find out more about franchises and start the process. The Small Business Administration is a good place to start. At www.sba.gov, there are numerous posts on franchising and a definition of what it means to be an SBA-approved franchise. There is also a link to the list at www.franchiseregistry.com where all approved franchises can be searched. It is important to note that being listed as an SBA-approved franchise is not an endorsement. Being approved means that the SBA has reviewed the disclosure documents and found them acceptable for SBA-backed financing. The use of the word “approved” can be misleading. SBA’s criteria to be in the Franchise Registry list is based upon the degree of control exercised by the franchisor over the franchisee. If there is too much control, the franchisee may be acting more like a branch office of the larger franchisor’s organization. Even though listed on the registry, it does not reflect on the safety or quality of the franchise. Extensive due diligence should be done before making a buying decision. The SBA advises that being on or off the list is not an indication of quality and profitability, and also emphasizes the need for thorough research. The franchise information provided on the registry should be considered a first step. Doing your homework is essential. Learn everything you can about the franchise, industry, and the satisfaction of current franchisees. Lastly, make sure it’s a good fit. Check out the many SBA-Approved franchises on Franchise Clique.