The EB-5 Immigrant Investor Program offers a path to US permanent residency for foreign nationals who invest in a qualifying US business that creates at least 10 full-time jobs for US workers. Unlike the E-2 visa, the EB-5 leads directly to a green card and is available to nationals of all countries, including Brazil and China. Franchise investment can qualify for EB-5, but the structure must be carefully designed to satisfy both the EB-5 program requirements and the terms of the franchise agreement. At Lopes Law LLC, we help franchise investors from Brazil, Portugal, and other countries understand whether their target franchise opportunity can be structured as an EB-5-qualifying investment.

This article explains the EB-5 investment requirements, how franchise investment can satisfy them, the franchise law issues specific to EB-5 investors, and what the coordination between franchise counsel and immigration counsel must look like. This is general information and not legal advice on any specific visa situation. EB-5 applications require a licensed immigration attorney.

What Are the EB-5 Investment Requirements?

The EB-5 program has three core requirements: minimum investment, new commercial enterprise, and job creation. Each must be satisfied for the I-526 petition to be approved.

Minimum Investment Thresholds

The standard EB-5 investment is $1,050,000. However, if the investment is in a Targeted Employment Area (TEA), the threshold is reduced to $800,000. A TEA is either a rural area (outside a metropolitan statistical area and outside any city or town with a population over 20,000) or a high-unemployment area (at least 150% of the national unemployment rate).

The TEA designation matters significantly because most franchise investments that reach the minimum threshold do so at the $800,000 level, not $1,050,000. Before committing to a specific franchise territory, investors should verify whether the intended location qualifies as a TEA. State agencies and USCIS both have processes for TEA designation, and the designation is location-specific. A franchise territory that spans multiple zip codes or census tracts may partially qualify and partially not qualify, which affects how the investment is structured.

New Commercial Enterprise

The EB-5 investment must go into a “new commercial enterprise,” which USCIS defines as any for-profit business established after November 29, 1990. For franchise investments, this means you must be opening a new franchise unit, not acquiring an existing operational franchise from a seller. Purchasing an existing franchise resale from a current franchisee does not create a new commercial enterprise unless you can demonstrate you are making it substantially new through reorganization, expansion, or purchase of a troubled business meeting specific criteria.

Most first-time EB-5 franchise investors satisfy this requirement by opening a brand-new franchise unit in a new location, which is treated as a new commercial enterprise. The franchise entity (the LLC that signs the franchise agreement) must itself be a new entity formed for this purpose.

Job Creation: 10 Full-Time US Workers

This is the most critical requirement for franchise investors using the direct investment track (as opposed to the Regional Center track). The investment must create at least 10 full-time positions for qualifying US workers. “Full-time” means a minimum of 35 hours per week. “Qualifying workers” means US citizens, lawful permanent residents, and other authorized workers; the investor and the investor’s immediate family members do not count.

Jobs created by the franchise unit must actually be created and maintained. USCIS requires the investor to demonstrate at the I-829 (petition to remove conditions) stage that the jobs were actually created and maintained for the required period. Projected jobs in a business plan are sufficient for the initial I-526 filing, but the real jobs must exist when conditions removal is sought approximately two years later.

How Can Franchise Investment Qualify for EB-5?

Franchise investment qualifies for EB-5 when the investment structure meets all three core requirements. The key variables are the total investment amount relative to the TEA threshold, the franchise unit’s employment level, and whether the franchise entity is a new commercial enterprise.

Multi-Unit Ownership as the EB-5 Strategy

A single franchise unit with a total investment of $400,000 to $600,000 does not meet the $800,000 minimum. Multi-unit franchise ownership is often the most reliable EB-5 strategy for investors who want to use franchise investment as their EB-5 vehicle. Two or three franchise units with a combined investment meeting or exceeding the TEA threshold, and with combined employment of 20 or more workers, provide a strong EB-5 case.

Alternatively, some franchise concepts require higher capital investment per unit. A full-service restaurant franchise or a senior care franchise may have total per-unit investments exceeding $800,000, making a single-unit investment viable for EB-5 purposes. At Lopes Law LLC, we review FDD Item 7 carefully to understand the actual investment range and assess whether the investment thesis for EB-5 is realistic for the target franchise.

Direct Investment vs. Regional Center Investment

EB-5 investors can invest either directly (into their own new commercial enterprise) or through a USCIS-designated Regional Center (a third-party fund that pools investor capital). The direct investment track is the standard approach for franchise investors because they own and operate the business. The Regional Center track allows for indirect job counting (including jobs created by related businesses) but requires the investor to be a passive investor in the Regional Center fund, which is not the same as owning and operating a franchise.

For investors who want to own and run their US franchise business, the direct investment track is the appropriate path.

What Franchise Law Issues Are Specific to EB-5 Investors?

EB-5 investors face a specific set of franchise law issues that domestic franchise buyers do not encounter. These issues require coordination between franchise counsel and EB-5 immigration counsel from the earliest stages of the process.

FDD Review: Item 7 and Item 19 Are Critical

FDD Item 7 (estimated initial investment) is the primary document used to establish the EB-5 investment amount. It must be reviewed carefully to confirm that the investment figures are accurate and complete. Some franchisors provide conservative Item 7 estimates that understate the actual investment required. If the Item 7 estimate is used to establish the EB-5 investment amount, and the actual investment turns out to be higher, that is generally fine from an EB-5 perspective. But if the Item 7 estimate overstates the actual investment to reach the threshold, that is a problem.

FDD Item 19 Financial Performance Representations are essential for the EB-5 business plan. A business plan that demonstrates projected revenues, employment levels, and financial performance is a required component of the I-526 petition. If the franchisor makes Item 19 disclosures, those figures provide defensible data points for the business plan. At Lopes Law LLC, we explain exactly what Item 19 does and does not show so that the business plan presents accurate projections, not optimistic projections.

Entity Structure Must Satisfy Both Franchise and EB-5 Requirements

The franchise entity structure must satisfy the franchisor’s requirements (typically a US LLC or corporation) and the EB-5 requirement that the investment flows to a new commercial enterprise. For most franchise investments, the US LLC that signs the franchise agreement is also the EB-5 new commercial enterprise. The investor’s capital contribution to the LLC (which is then used for the franchise fee, buildout, and working capital) is the qualifying EB-5 investment.

If the investor uses a holding company structure (a US parent LLC that owns operating LLCs for each franchise unit), the EB-5 investment must be properly traced through the structure to the operating entity where the jobs are created. This requires careful documentation in the I-526 petition. At Lopes Law LLC, we coordinate with EB-5 immigration counsel to ensure the franchise entity structure is clearly documented and consistent with EB-5 program requirements.

Transfer Restrictions and the EB-5 Holding Period

The EB-5 investor receives conditional permanent residency first (a two-year conditional green card) and must then file an I-829 petition to remove conditions. During this period, the investor must maintain the investment at risk in the new commercial enterprise. Franchise agreement transfer restrictions can complicate the investor’s ability to demonstrate that the investment remains in place if circumstances change.

Franchise agreements typically restrict transfers for 5 to 10 years unless the franchisor consents. This means the investor is generally locked into the franchise for the EB-5 holding period, which is actually consistent with the EB-5 at-risk requirement. But investors should understand that they cannot freely sell the franchise during the conditional residency period without USCIS implications.

How Long Does the EB-5 Process Take?

The EB-5 timeline has two major phases: the I-526 petition phase and the conditional residency removal phase.

The I-526 (Immigrant Petition by Alien Investor) is filed after the investment is made and the enterprise is operational. USCIS processing times for I-526 petitions vary by country of birth, not nationality. Chinese and Indian nationals face visa backlogs that can extend processing to 5 to 10 years or more. Brazilian and Portuguese nationals currently face shorter processing times, typically 2 to 4 years from filing, though USCIS processing times can change. After I-526 approval, the investor proceeds through consular processing or adjustment of status to receive a conditional green card.

During the waiting period, which can be years for some nationalities, the investor must remain in valid US status. Some investors are on other visa categories (E-2, F-1, or others) during this period. Others travel back and forth internationally. The franchise must remain operational and creating jobs throughout this entire period.

Once the conditional green card is issued, the investor has a two-year period of conditional residency. Near the end of that two-year period, the investor files an I-829 (Petition by Investor to Remove Conditions) demonstrating that the investment was made, was maintained at risk, and that the required jobs were created. Upon I-829 approval, the investor receives permanent residency without conditions.

A Real Scenario: A Brazilian Investor’s Multi-Unit EB-5 Franchise Strategy

A Brazilian investor was committed to obtaining US permanent residency. He had investigated the E-2 visa option but learned that Brazil does not have an E-2 treaty with the United States. His pathway was the EB-5 program. His investment thesis was a food service franchise with demonstrated unit economics showing average annual revenue of $1.2M per unit and average employment of 14 full-time workers per unit.

He identified two locations for new franchise units, both in a certified TEA. The total capital required across both units was approximately $1.8M, well above the $800,000 TEA threshold. Combined employment across both units was projected at 28 full-time workers. At Lopes Law LLC, we reviewed both FDDs (the franchisor had the same FDD applicable to both units), structured the ownership entities with guidance from EB-5 immigration counsel, and confirmed that the franchise structure was consistent with the EB-5 new commercial enterprise and job creation requirements.

We also identified and negotiated a key issue in the franchise agreement: the franchisor’s standard form included a clause stating that the franchisee could not own any interest in any other food service business during the term. This clause would have prevented the investor from holding both franchise entities in the way his EB-5 structure required. We negotiated a modification permitting cross-ownership of franchisee entities within the same franchise system.

The I-526 petition was filed approximately six months after both franchise units opened and initial employment levels were verified. The franchise attorney and immigration attorney coordination prevented what could have been a costly structural problem that would not have become apparent until the I-526 filing.

Should EB-5 Franchise Investors Get a Franchise Attorney?

Yes, absolutely. The franchise attorney and the EB-5 immigration attorney serve complementary but distinct roles. The immigration attorney cannot review the franchise agreement for legal compliance, negotiate franchise terms, or identify structuring issues in the franchise agreement. The franchise attorney cannot advise on USCIS requirements or petition preparation.

At Lopes Law LLC, our FDD and franchise agreement review for EB-5 investors is $6,000 flat fee for the International FDD Validation Review. This covers all 23 FDD items, franchise agreement review, identification of structuring issues relevant to EB-5 compliance, and written summary with coordination notes for EB-5 immigration counsel. For a total EB-5 franchise investment of $800,000 or more, this is a necessary and proportionate investment in getting the structure right from the start.

Our EB-5 franchise review typically takes 10 to 14 business days from receipt of the complete FDD. The deliverable includes a written analysis of all 23 FDD items with specific attention to Item 7 investment calculations, Item 19 financial performance data for the business plan, and any franchise agreement provisions that may conflict with EB-5 structuring requirements. We also provide a coordination memo for the EB-5 immigration attorney highlighting the franchise-specific issues they need to address in the I-526 petition.

For an overview of all international franchise investment legal issues, including entity formation, banking, and tax considerations, see our guide on International Franchise Investment in the US: A Legal Guide for Foreign Nationals. If you are a national of an E-2 treaty country exploring the E-2 alternative, see E-2 Visa and Franchise Ownership: What International Investors Need to Know. For a detailed explanation of what an FDD review covers, see What Does an FDD Review Include?

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