Does my hotel brand have to be on the SBA Franchise Directory?

SOP 50 10 8.1 describes it plainly: SBA has created the Directory of all franchise and other brands it has reviewed that are eligible for SBA financial assistance.^[2] The file published on October 9, 2026 is named Franchise Directory Oct 9 2026_REM01.xlsx, is 280 KB, and carries 3,461 brand rows.^[1]

Each row answers three questions: whether SBA determined that the brand meets the Federal Trade Commission definition of a franchise; the SBA Franchise Identifier Code, which SBA issues only when it does; and whether there are additional issues the lender must consider.^[2] On this edition 2,438 rows are marked as meeting the definition and 2,437 of those carry a code. Another 1,009 are marked as not meeting it, and 14 are eligible only for SBA disaster assistance loans. Those three groups add to the 3,461 total. A fourth column records whether the franchisor certification has been received, and 281 rows carry a recertified date.^[1]

The definition doing the work is not SBA's. 16 CFR 436.1(h) makes a relationship a franchise when the franchisee gets the right to operate under the franchisor's trademark, the franchisor has or can exert significant control over the method of operation, and the franchisee makes a required payment.^[3] A hotel franchise agreement satisfies all three. The SOP widens the net: a licence or dealer agreement counts if SBA determines it meets the definition, and agreements exempt from FTC disclosure are still inside it.^[2] The FTC rule drops its disclosure requirements once the franchisee's initial investment reaches $1,469,600, which a hotel purchase clears easily.^[4] Not owing a disclosure document is not the same as not being a franchise.

The table below carries twelve listings as the Directory prints them, with the code a lender keys into the SBA Loan System and the conditions SBA attaches.^[1][2] Two things in it are worth reading twice.

The first is the brand name. The lender must ensure that the brand, and where applicable the agreement type, the applicant will operate under matches what the Directory lists.^[2] Best Western appears as a membership agreement and several extended-stay brands carry an ES suffix, so the agreement and the row have to be the same thing, not the same logo.

The second is the last row. Fairbridge Inn Express and Fairbridge Inn & Suites sit on the Directory marked as not meeting the FTC definition, with no identifier code.^[1] That is not a rejection: SBA adds such brands at their request to reduce confusion over relationships that look like franchises but are not.^[2] It changes the procedure, not the answer. Where a brand is uncoded and the lender concludes the agreement does not meet the definition, the lender documents its own determination and bears the risk of getting it wrong on a delegated 7(a) loan. On a delegated 504 loan the documents go to SBA for a final determination before approval.^[2]

13 CFR 120.110(c) makes passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds ineligible for SBA business loans.^[7] SOP 50 10 8.1 turns that into a test a hotel can fail: a business whose management agreement gives the management company sole discretion over operations is an ineligible passive business. The applicant stays eligible where the manager lacks sole discretion and the owner exercises meaningful oversight, which the SOP defines as an agreement letting the applicant approve the annual operating budget, approve expenditures over a significant threshold, control the bank accounts, and oversee the staff, who must be the applicant's employees.^[2]

Then the Directory adds a harder line. The note on every hotel listing read for this page says that if the applicant also operates under a third-party management agreement, the lender must review it for affiliation, and that the applicant is not eligible if the management company is, or is affiliated with, the franchisor.^[1] A brand-managed hotel and an SBA loan do not go together, whatever the economics look like.

One exception saves paperwork rather than deals. Unless the management agreement sits inside the franchise disclosure documents for a listed brand, lenders must review it on every loan, delegated or not.^[2] The manager inside the brand's FDD is covered by the listing; the manager hired separately is not.

Length of stay comes first. The SOP makes hotels, motels, recreational vehicle parks, marinas and campgrounds eligible only where more than 50 percent of the business's prior-year revenue came from transients who stay 30 days or less at a time, with projections standing in for a start-up.^[2] Twenty-two listings on this edition repeat that test in their notes, and they are the extended-stay and apartment-branded ones: Residence Inn by Marriott, Extended Stay America, ECHO Suites and StudioRes among them.^[1] The test applies to any hotel under the SOP, so a note repeating it flags the asset type rather than a rule unique to that flag. Is extended-stay hotel financing different? works the revenue test through in detail.

The comfort letter comes second. Nineteen listings mention one, and they split two ways. The eight Hyatt brands, Hyatt Place and Hyatt House included, carry a note that the Hyatt comfort letter has been approved by SBA. The extended-stay listings carrying the 30-day test say the opposite: the comfort letter may not be used with SBA transactions.^[1] A franchise comfort letter is routine on a conventional hotel loan, so learning at closing that the brand's version is barred is an avoidable surprise.

Lien position comes third. Many listings tell the lender to secure the appropriate lien position on all collateral, and others bar a lease addendum, a collateral assignment of lease or a franchisor purchase option where the real estate secures the SBA loan.^[1] That is SBA naming the franchise documents the borrower may sign.

SOP 50 10 7, effective August 1, 2023, contains no mention of a Franchise Directory and none of the FTC definition of a franchise.^[5] The franchise review was gone. Behind it was the final rule on Affiliation and Lending Criteria for the SBA Business Loan Programs, published April 10, 2023 at 88 FR 21074 and effective May 11, 2023, which removed the principle of control as establishing affiliation between entities.^[2] The current affiliation regulation, 13 CFR 121.301(f), reads on ownership and says nothing about franchise or licence agreements.^[8]

SOP 50 10 8, effective June 1, 2025, brought the Directory back with the listing requirement intact, and 8.1 carried it into the edition effective October 1, 2026.^[6][2] What did not come back is the document a franchisee used to sign. Neither edition mentions an addendum to the franchise agreement; SBA now sends a Franchisor or Distributor Certification to the franchisor and lists the brand once the signed certification is returned.^[2] The Directory's fourth column is the record of that certification.^[1]

Both halves of the stale answer are wrong in 2026. The Directory exists, the brand has to be on it, and what changed is who signs: the franchisor certifies once for the whole system instead of each franchisee signing an addendum.

That is the SOP's own wording, and it applies before processing, not at closing.^[2] The lender's instruction is to tell the applicant or franchisor how to get the brand added. The franchisor submits the agreement, the disclosure document where there is one, and every other document a franchisee must sign, to franchise@sba.gov. New brands are reviewed in the order received, and SBA lists the brand and issues the code once the signed certification is back.^[2]

SBA publishes no turnaround time for that review, and this page is not going to invent one. The only clock written down runs the other way: before removing a brand, SBA gives the franchisor notice and 30 days to respond.^[2] A buyer on a financing contingency is holding the risk of a review with no published duration, which is the argument for checking the current edition before signing.

Two structures catch hotel buyers. Where an applicant operates under several qualifying agreements, all must be listed or the application cannot proceed, so a hotel with a branded restaurant has more than one row to check. And a franchise development agreement, or master franchise agreement, has been determined to be passive, which makes an applicant operating under one ineligible outright.^[2]

Download the dated file rather than a summary of it, because each edition replaces the last.^[1] Match the row to the agreement type, not to the logo. Then read the notes column as a condition list: a third-party manager, a long-stay revenue mix and a comfort letter can each end the SBA path on a deal that prices well.

The Directory question only binds SBA loans. A bank, a credit union, a debt fund or a CMBS lender runs its own franchise review and its own comfort letter negotiation, and none of them publishes the terms of either. What do lenders require for a hotel loan? covers that side, and SBA 7(a) versus 504 covers which program fits once the brand clears.

Guide

How does hotel financing work, and what does it cost right now?

Other questions in this guide

• Is my hotel company too big for an SBA loan?
• What is the difference between an SBA 7(a) loan and an SBA 504 loan for a hotel?
• How is extended-stay hotel financing different?
• How do I finance converting my hotel to a new brand?
• What do lenders require for a hotel loan?
• Who lends on hotels under $5 million?
• How do I finance a hotel PIP or renovation?

Terms defined in the glossary

• Hotel Franchise Agreement
• Franchise Disclosure Document (FDD)
• Franchise Comfort Letter
• SBA 7(a) Loan
• SBA 504 Loan

Our own data

• Matthews Hotel Markets rate sheet
• SBA loans to hotels: who lends, how much, and where