Skip to content
SYLVAN LAKE · E-2 FIELD GUIDE

Does a franchisor’s approval establish the right to direct the E-2 enterprise?

Sources checked:

THE DIRECT ANSWER

No. Commercial approval to operate under a brand does not establish the investor’s qualifying ownership or operational control. Read the rights in the actual entity.

Distinguish brand standards from company authority

Identify who makes the enterprise’s operating decisions and what authority the applicant genuinely holds. Treaty enterprise ownership is a separate condition. An agreement may be commercially acceptable while leaving the proposed E-2 structure unresolved.

The regulation instead asks whether the enterprise has the present or future capacity to produce more than a minimal living for the investor and family, and it allows future capacity to be shown where it is likely to be reached within five years. Irrevocable commitment and exposure to loss are settled by how the purchase money actually moves, and substantiality by whether the committed sum is large in proportion to what this enterprise costs to buy or establish — there is no fixed figure. A seller note secured on the roofing company's equipment and receivables is excluded from the investment; the same amount borrowed against the investor's own home or on a personal guarantee without security on the business would count.