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Investor Visas

E-2 Visa for Franchise Buyers: How a Franchise Investment Is Judged

By Growth FLPC

By Kyle Farmer, Farmer Law PC, Austin, Texas.

Last reviewed: November 9, 2026.

Short answer: Yes, buying a franchise can support an E-2 visa. The franchise is judged like any other E-2 business: your funds must be committed and at risk, the investment must be substantial compared with the total cost of the franchise, the business must be more than marginal, and you must control it. A franchise agreement does not change those rules.

If you’re a treaty-country investor looking at a franchise, book a free 15-minute intro call.

Why franchises are common in E-2 cases

A franchise gives a new investor a known brand, an operating system and training. For E-2 purposes, it also creates useful paperwork: a franchise disclosure document, a signed franchise agreement, a site lease and a build-out budget. Those records help show the cost of the business and how the money is being spent.

The rules do not have a franchise section. Franchise cases are decided under the same E-2 standards in INA 101(a)(15)(E)(ii), 8 CFR 214.2(e) and 9 FAM 402.9-6. You also must be a national of an E-2 treaty country; see our E-2 treaty countries list. For the overall visa, see our E-2 visa page.

The investment must be substantial

There is no set minimum dollar amount for E-2 (9 FAM 402.9-6(D)). Instead, the officer compares what you invested with the total cost of the business. This is called the proportionality test, and it works like a sliding scale: the lower the cost of the business, the higher the share you are expected to invest (8 CFR 214.2(e)(14)).

For a new franchise unit, the cost is what it takes to get the business to the point of operating (9 FAM 402.9-6(D)). The franchise disclosure document helps here. Federal rules require the franchisor to give you that document at least 14 calendar days before you sign a binding agreement or pay the franchisor (16 CFR 436.2(a)), and its Item 7 must show the estimated initial investment in a table (16 CFR 436.5(g)). Many investors use Item 7, their own lease and contractor quotes to show the cost of their unit.

What usually counts toward the investment:

  • The initial franchise fee, once paid. The rules do not name franchise fees, but a paid fee is capital you have put at risk to set up the business, and rights to intangible property can count to the extent their value can reasonably be determined (8 CFR 214.2(e)(12); 9 FAM 402.9-6(B)). Ongoing royalties paid out of the business’s income are not part of your investment.
  • Build-out, equipment and inventory bought for the business (9 FAM 402.9-6(B)).
  • Rent and lease deposits, but only to a limited extent. Lease payments count only for the amount paid toward that item in any one month, unless rent was paid in advance (9 FAM 402.9-6(B)).
  • Working capital that is committed to the business, not just sitting in a personal account.

The funds must be at risk and committed

E-2 money has to be placed at risk in the commercial sense, meaning you could lose some or all of it if the business fails (8 CFR 214.2(e)(12)). That has a few consequences for franchise buyers:

  • Loans secured by the business do not count. A loan backed by the franchise’s own assets is not at risk for E-2 purposes. A loan backed by your personal assets, such as a home equity loan, can count (9 FAM 402.9-6(B)).
  • You must be close to opening. Signing a franchise agreement alone, or scouting sites, is not enough. You must have committed funds and be close to starting actual operations (9 FAM 402.9-6(B)).
  • Escrow can protect you. A purchase that depends on the visa being issued can still count as irrevocable if the funds are held in escrow for release once the visa is issued (9 FAM 402.9-6(B); 8 CFR 214.2(e)(12)).

You also need to show where the money came from. See our guide to E-2 source of funds and escrow.

The franchise cannot be marginal

The business must have the present or future capacity to earn more than a minimal living for you and your family, or to make a significant economic contribution. That future capacity should generally be realizable within five years from when the business starts normal operations (8 CFR 214.2(e)(15); 9 FAM 402.9-6(E)).

For a franchise, this is usually shown with a business plan that includes hiring and revenue projections. If the franchisor’s disclosure document includes financial performance information in Item 19 (16 CFR 436.5(s)), it can help support your projections, but the plan should be built for your own location. Officers can ask for more than unaudited figures supplied by the applicant (9 FAM 402.9-6(D)).

You must develop and direct the business

E-2 investors must control the enterprise, usually by owning at least 50 percent of it (8 CFR 214.2(e)(16); 9 FAM 402.9-6(F)). Franchise agreements limit how you run the business: brand standards, approved suppliers and required training. The E-2 rules do not say that these standard franchise terms take away control. The test is whether you develop and direct the business, normally shown by owning at least 50 percent or by operational control through a managerial position (8 CFR 214.2(e)(16); 9 FAM 402.9-4(B)). What matters is that you, not the franchisor, own the franchisee company and make its management decisions. An agreement that hands day-to-day management of your unit to the franchisor or an outside manager raises a real control question.

A few practical points:

  • Own the franchisee entity. The U.S. company that signs the franchise agreement should be the company you own.
  • Partners need care. In a 50/50 deal with one other owner, each can have control if both keep full management rights. With more than two equal partners, no one has control through ownership alone (9 FAM 402.9-6(F)).
  • Passive or absentee models are harder. You must be coming to develop and direct the business, so plan to have an active management role.

Renewals and later years

An E-2 investor can be admitted for up to 2 years at a time and can extend (8 CFR 214.2(e)(19), (20)). At renewal, officers look at whether the business is operating as planned, including hiring and revenue. See our E-2 renewal and extension page for what is reviewed again.

How Farmer Law PC helps

Our experienced attorneys work with franchise buyers from treaty countries. We review the franchise disclosure document and agreement for E-2 issues, help structure escrow and ownership, prepare the business plan with your advisers and handle the consular filing.

FAQ

Can I get an E-2 visa by buying a franchise?
Yes. A franchise can qualify as an E-2 business if you are a treaty-country national, your funds are committed and at risk, the investment is substantial compared with the cost of the franchise, the business is not marginal and you control it.

Is there a minimum investment for an E-2 franchise?
No. There is no set minimum. The officer compares the amount you invested with the total cost of the franchise, and a lower-cost business generally needs a higher share of the cost invested.

Does the franchise fee count toward the E-2 investment?
Generally yes, once it is paid. Amounts spent on the franchise fee, build-out, equipment and inventory for the business are commonly counted. Loans secured by the business’s own assets do not count.

Can I sign the franchise agreement before getting the E-2 visa?
Yes, and you usually need a real commitment before you apply. Many buyers place the funds in escrow, with release tied to the visa being issued (9 FAM 402.9-6(B)). Signing alone, without committed funds, is not enough.

Do franchise rules mean I don’t control the business?
Not by themselves. The E-2 rules do not treat standard brand standards or approved-supplier terms as taking away control. You still need to own the franchisee company, usually at least 50 percent, and make its management decisions.

Talk with us

If you’re a treaty-country national looking at a franchise, book a free 15-minute intro call with one of our attorneys, or call (512) 588-5909.