Franchise Agreement Terms Sink Company’s SDVOSB Application

It’s a refrain that my colleagues and I have often heard: if you’re a franchisee, it can be really, really hard–perhaps almost impossible–to be verified as a service-disabled veteran-owned small business.

A recent case demonstrates the difficulties in obtaining SDVOSB status as a franchisee. In the case, the SBA’s Office of Hearings and Appeals held that the Center for Verification and Eligibility had correctly denied a company’s SDVOSB application because, in the eyes of the CVE and SBA, the terms of the franchise agreement impeded the veteran’s control of the company.

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