Small Business & Franchise — 2026-11-02

Key Highlights

• SBA Doubles Lending Limits: An SBA official confirmed the agency’s decision to double its relationship-wide lending limit, aiming to resolve a "years-old lending pickle."
• Snap-on Acquires Diesel Laptops: Snap-on Incorporated acquired Diesel Laptops, LLC, for approximately $100 million in cash, signaling continued M&A activity within franchise-adjacent service sectors.
• RaceTrac Acquires Potbelly: In a major food franchise move, RaceTrac announced an all-cash deal to acquire Potbelly for $566 million at $17.12 per share.
• JRI Hospitality Expands Freddy's Footprint: JRI Hospitality, the largest Freddy's franchisee based in Salina, Kansas, surpassed 130 locations by acquiring another Midwest franchisee, extending their reach into three additional states.
• New SBA Rules Impact Franchise Financing: New SBA rules effective October 1 are reshaping how franchises are financed, with specific changes potentially stopping certain brands from being financed if they don't meet updated criteria.

1 sources

americasbestfranchises.com

americasbestfranchises.com

Policy & Funding Watch

• Relationship-Wide Lending Limits Doubled: The SBA has increased its relationship-wide lending limits to address long-standing bottlenecks in loan processing for borrowers with multiple loans or complex needs. This affects all SBA 7(a) and 504 borrowers, particularly those scaling operations.
• October 1 SOP 50 10 8.1 Changes: The new Standard Operating Procedure (SOP) 50 10 8.1 is now in effect, altering eligibility for business acquisitions and refinancing. Loans already in process before October 1 generally stay under prior rules, but new applications face stricter scrutiny on tax returns and debt-to-income ratios.
• Refinancing Merchant Cash Advances: New SBA lending rules have opened a path for small businesses to refinance high-cost merchant cash advances into more sustainable SBA loans, offering relief to operators trapped in short-term, high-interest debt cycles.

2 sources

sba.gov

sba.gov

sba.gov

sba.gov

Franchise Spotlight

• Potbelly Sandwich Shop: Now under RaceTrac ownership following a $566 million acquisition, Potbelly represents a major consolidation in the fast-casual space. The all-cash deal highlights the premium valuation of established, iconic brands with strong unit economics.
• Freddy's Frozen Custard & Steakburgers: The brand continues to attract large-scale multi-unit operators, as evidenced by JRI Hospitality’s acquisition pushing them past 130 locations. This trend suggests Freddy's model is resilient and attractive to experienced operators looking for scale.
• The Flying Biscuit Café: Franchise partners Mario and Ifeoma Harper signed a lease for their first location in Katy, Texas (1660 S Mason Rd), marking a continued expansion of this all-day breakfast and lunch concept into new suburban markets.

Owner Success Stories

• JRI Hospitality’s Multi-State Expansion: Based in Salina, Kansas, JRI Hospitality has successfully scaled to over 130 Freddy's locations across multiple states. Their recent acquisition of another Midwest franchisee demonstrates a successful strategy of inorganic growth through peer acquisition.
• Harper Family Franchise Launch: Mario and Ifeoma Harper are opening their first The Flying Biscuit Café in Katy, Texas, representing the successful entry of new franchisees into a proven casual dining model.

Market & Capital Pulse

Private equity firms are increasingly turning their attention to franchise suppliers, driving M&A activity in that vertical. This shift follows significant deals like the sale of IFPG and other broker networks, indicating that capital is flowing not just into brands, but into the infrastructure supporting them.

What to Watch Next

• SBA Rule Implementation: Monitor how lenders adjust their underwriting standards for the new relationship-wide limits and the October 1 SOP changes, particularly regarding business acquisitions.
• Franchise FDD Filings: With the new year approaching, watch for updated Franchise Disclosure Documents (FDDs) from major brands reflecting these financing changes.
• PE Supplier Deals: Keep an eye on further consolidation among franchise service providers and suppliers as PE firms continue to roll up assets.

Reader Action Items

• Review Your Loan Structure: If you have multiple SBA loans or are planning to acquire another unit, consult with your lender about how the doubled relationship-wide lending limit benefits your current or future borrowing capacity.
• Check Refinancing Eligibility: If you are currently using merchant cash advances, determine if you now qualify for SBA refinancing options under the new rules.
• Audit Financials for SOP 50 10 8.1: Ensure your recent tax returns and debt-to-income ratios align with the stricter requirements for new franchise financing applications effective after October 1.
• Evaluate Multi-Unit Opportunities: Look at the success of operators like JRI Hospitality; consider if acquiring existing units from struggling peers is a viable growth strategy compared to ground-up builds.