Sba Form 2464 - Annual Franchisor Certification printable pdf download

Instructions for “Annual Franchisor Certification”

SBA Form 2464

The Annual Franchisor

Certification (SBA Form 2464) is to be used only if the Franchisor is listed on

the SBA Franchise Directory as using no addendum (when not required) or using an SBA Negotiated

Addendum. To continue using no addendum or its SBA Negotiated Addendum, the Franchisor must

submit the Certification each year, as soon as it updates its franchise agreement

(referred to as the

“current agreement”), but in no event later than April 30. If the Certification is not received by SBA

by April 30, SBA will change the franchise listing on the SBA Franchise Directory and the Franchisor

must use the SBA Addendum to Franchise Agreement (SBA Form 2462) for all SBA-guaranteed

loans.

The Certification requires a duly authorized representative of the Franchisor with the authority to sign

the Certification to represent that (1) the terms of the Franchisor’s current agreement that relate to

control by the Franchisor of its franchisees (resulting in a determination by SBA of affiliation

between the Franchisor and its franchisees, as defined in 13 CFR part 121 and SBA’s Standard

Operating Procedure 50 10) have not substantively changed from those appearing in the most recent

franchise agreement reviewed by SBA for placement on the SBA Franchise Directory; and (2) if the

Franchisor is using an SBA Negotiated Addendum, no changes have been made to its SBA Negotiated

Addendum.

SBA has determined that each of the following provisions in a franchise agreement results in

affiliation between a franchisor and a franchisee:

TRANSFER OR CHANGE OF OWNERSHIP

 Franchisor has the option or right of first refusal (ROFR) to purchase an interest in

the franchise and become a partial owner of the Franchisee.

 Franchisor’s consent to the sale or transfer of any interest in the franchise (full or

partial) is based on the Franchisor’s “sole discretion” or “reasonable business

judgment” or the agreement is silent on the standard for consent.

 Franchisee remains liable for the actions of the transferee after transfer of the

franchise.

SALE OF ASSETS

 Franchisor or an appraiser selected by the Franchisor solely controls the valuation of

assets when the Franchisor has the option or ROFR to purchase assets, including real

estate, upon default or termination of agreement.

While relationships established under license, jobber, dealer and similar agreements are not generally described as

“franchise” relationships, if such relationships meet the Federal Trade Commission’s (FTC’s) definition of a

franchise (see 16 CFR § 436), they are treated by SBA as franchise relationships for franchise affiliation

determinations per 13 CFR § 121.301(f)(5).

The term franchise agreement includes all addenda, amendments and other documents the franchisor requires the

franchisee to sign.

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Sba Form 2464 - Annual Franchisor Certification