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Log In / Register | Sep 22, 2017

Do not rely on SBA failure rates

Several franchises, especially childcare related franchises that sell building as part of the franchise do not mark the loan as franchised loan. Therefore, SBA records do not indicate any relation of those failed loans to the franchises. Do not rely on these failure rates only. For example, Discovery point childcare franchise shows very low failure rate, less than 10%. In reality,out of the 15 new starts in 2006-2007, 10 went bankrupt with closure and/or owners handed over the business. Several of the remaining are behind payments and banks and the franchise are ignoring the late payments to avoid more failures. The franchise is not losing money as Cliff made nearly half a Million Dollar profit from each of the centers personally.

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