Use this checklist to assess businesses in this industry for SBA 7(a) lending and underwriting.

👨‍🍳 Owner Involvement & Labor Normalization

• Is the owner acting as GM or floating between locations?
• Has a fair market wage been applied for owner oversight and labor?
• Are GMs or salaried managers in place at each location?
• Is staffing consistent across units or dependent on owner coverage?

🏷️ Franchise Fees & Control Limitations

• What are the total franchise fees (royalty, ad fund, local co-op)?
• Are pricing, promos, and suppliers restricted by franchisor?
• Are technology systems (POS, inventory) controlled by the brand?
• Have franchise renewal terms and transferability been reviewed?

📍 Lease Terms & Location Risk

• Are leases consistent across units or independently negotiated?
• Are any leases set to expire or priced below market?
• Are franchise approvals required for site relocation or expansion?
• Is each lease assignable and aligned with SBA requirements?

📊 Addbacks & Unit-Level Adjustments

• Are addbacks documented and supported (e.g., owner perks, personal travel)?
• Are administrative salaries spread across units or centralized?
• Is equipment CapEx disclosed for each store?
• Are food, labor, and COGS benchmarks consistent by unit?

🚩 Red Flags

• Owner manages or floats between units with no market wage applied
• Franchise + ad fees exceed 10–12% with tight margins
• Lease expires soon or varies significantly between stores
• Addbacks include undocumented payroll, car allowances, or meals

📌 SBA SOP Tip

QSR franchise valuations must reflect owner replacement labor, franchise fee impact, and lease risks at the unit level. Sustainable value depends on staffing depth, earnings quality, and supportable addbacks.