Why wouldn`t a franchisor want to use the standard form of the SBA as an addition to the franchise agreement? As of January 2018, Form SBA 2463 no longer needs to be used with the negotiated SBA Addendum. The franchisor must provide annual certification on Form SBA 2464 (Annual Franchisor Certification) to demonstrate that its current agreement can continue to use the negotiated SBA Addendum or does not yet require an Addendum. Certification requires the franchisor`s agent to provide the franchisor`s full legal name, its SBA franchise code as listed in the SBA Franchise Directory, before signing the form and providing their own name, title, and company name. Yes – must seek approval of the negotiated addendum SBA Form 2463, Franchisor Attestation for use with SBA The negotiated addendum is a form completed by the franchisors and previously attached to Form SBA 2462 (Addendum to the Franchise Agreement). If a franchisor is already listed in the SBA Franchise Directory and wishes to use a negotiated addendum instead of the standard SBA addendum, the form requires the type of agreement used. Available options include: – Note: The SBA Addendum, Form 2462, can be used in place of a negotiated addendum as long as it is executed in its entirety. For more information about SBA 504 loans in Alabama, Florida or South Georgia, contact a Florida First Capital/First Capital Finance loan agent or email us at info@ffcfc.com. Phone: 850.681.3601 or toll free at 800.504.LOAN. Would like to move to the standard SBA form of the addendum The franchisor must submit the agreement, the Franchise Information Document (FDD), any other document that the franchisor signs from the franchisee, if any, and its contact information in order to franchise@sba.gov an affiliation and eligibility provision. If the franchisor agrees to use Form 2462, the SBA will only conduct a verification of eligibility, not affiliation, which will speed up the approval process.

After reviewing and completing all the necessary additions, the SBA will list the brand with the relevant information in the directory. The latest available edition of the form was published by the SBA on 1 February 2017. The latest printable version of form SBA 2463 can be downloaded below. Form SBA 2462 (Addendum to the Franchise Agreement) is a form closely related to the SBA 2463 Franchise Form. SBA 2462 is used when a franchisee applies for SBA-backed financing. The addendum certifies that no terms of the franchise agreement will be applied to the franchisee during the term of the loan secured by the SBA. As of January 1, 2018, franchisors who wish to help their franchisees are eligible for loans guaranteed by the United States. Small Business Administration (SBA) must be listed in the SBA`s new franchise directory. SBA-guaranteed small business loans have long been a common method for franchisees to finance the acquisition and development of new franchises.

What role does the SBA play in franchising? The SBA guarantees conventional bank loans to small independent businesses. A franchisee is not considered a small business if the SBA determines that the franchisor retains too much control over the franchisee because the SBA treats the franchisor and franchisee as “affiliates” in this case. The provisions of the franchise agreement that reverse the SBA`s “affiliation” scale and do not qualify a franchisee for a loan secured by the SBA include general provisions such as those that give the franchisor a right of first refusal in the event of a change of franchisee or a right to purchase franchise assets upon termination of the franchise agreement. Why this change? For years, franchisors have solved SBA`s affiliation issues by adding a pre-negotiated change to their franchise agreement and registering their franchise mark in a franchise registry maintained by a third-party provider, FranData. Although the FranData process has not been cost-effective, it has been relatively successful in reducing processing times for loans guaranteed by the SBA. until recently. What is changing? The SBA`s new Franchise Directory (“Franchise Directory”) represents the SBA`s efforts to streamline credit processing for franchisees. It replaces the old franchise registry and provides a centralized list of all franchisors whose franchisees are eligible to receive loans guaranteed by the SBA. When will this change come into effect? From 1. In January 2018, a franchisee`s application for an SBA-backed loan will not be processed by a bank unless the franchise system from which they purchase is located in the franchise directory. What information is displayed in the SBA franchise directory? The Franchise Directory lists the following information for each franchise brand that meets the FTC rule definition of a franchise: Regardless of how the brand is approved, the Certified Development Company (Florida First Capital), as mentioned above, must always obtain a signed copy of the franchise agreement and all applicable documents and the corresponding addendum and provide it to the SBA. on an amendment (Form 327) requesting approval before the loan is submitted to finance the bond.

If the franchisor decides not to use Form 2462, the SBA will work with the franchisor to resolve any affiliation issues, which could include the use of an addendum negotiated by the SBA. The correct type must be selected from the drop-down menu. The user must then press the “Tab” key to automatically enter the appropriate terms in all fields of the form. The same should be done with all the drop-down menus throughout the form. All remaining fields to be filled in must be completed manually. The addendum is used in conjunction with SBA 7(a), 504, and Community Advantage Loan programs. Each program is designed to support small, for-profit businesses based in the United States. Yes – must be submitted to explain the decision that accepts the standard form of the SBA Addendum Form 2462, Addendum to the Franchise Agreement is a form that is completed by a franchisee and franchisor when applying for financing approved by the Small Business Administration (SBA). The information contained in the form is used to ensure that no terms of the franchise agreements are applied to the franchisee during the term of the loan guaranteed by the SBA. We are at your disposal to discuss your questions about the franchise directory and SBA forms.

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