List of Best and Worst Franchises as Judged by Franchisees Ability to Pay Their Loans
The Small Business Administration recently published it's annual compilation of performance data on thousands of franchisee loans it has guaranteed.
The information is available through Coleman Publishing. The study looks at the number of SBA-backed franchisee loans that went into liquidation. The measure gives some insight into the financial risks involved with franchises that received funding thru the SBA Guaranteed loans program.
The latest report -- covering loans made from Oct. 1, 2000, to Sept. 30, 2007. Among other statistics, it shows how many loans were made to a franchise, the dollars disbursed, and what percentage of loans went into liquidation, something the SBA classifies as a "failure."
Many SBA lenders use the data to help spot negative trends and reduce future loan losses.
Best Performers (less than 1% failure) Sorted Ascending by lowest % (ties sorted descending by # of loans)
| Franchisor | # Loans | # Failure | Failure Rate |
| Comfort Inn | 158 | 0 | 0% |
| Primrose | 110 | 0 | 0% |
| Edible Arrangement | 104 | 0 | 0% |
| Massage Envy | 61 | 0 | 0% |
| Cartridge World | 112 | 8 | .93% |
| Subway | 1974 | 84 | .96% |
| Dunkin Donuts | 410 | 17 | .96% |
| Sport Clips | 191 | 8 | .96% |
| Travelodge | 91 | 4 | .96% |
| IHOP | 67 | 3 | .96% |
| Goddard | 109 | 3 | .97% |
| Super 8 Motel | 363 | 8 | .98% |
| Best Western | 156 | 3 | .98% |
| Choice Hotels | 144 | 3 | .98% |
| Rita's Water Ice | 103 | 2 | .98% |
| Arco | 85 | 2 | .98% |
| Zaxby's | 81 | 2 | .98% |
| Anytime Fitness | 65 | 1 | .98% |
| Holiday Inn Express | 157 | 1 | .99% |
| Culver's Frozen Custard | 150 | 1 | .99% |
| Hampton Inn | 88 | 1 | .99% |
| Brusters Real Ice Cream | 84 | 1 | .99% |
| Little Caesars Pizza | 72 | 1 | .99% |
| FastSigns | 71 | 1 | .99% |
High Failures (greater than 25%) Sorted Descending by Highest % (ties sorted descending by # of loans)
| Franchisor | Loan # | Failure # | Failure Rate |
| Carvel Ice Cream | 76 | 30 | 39% |
| Matco Tools | 316 | 95 | 30% |
| Atlanta Bread | 61 | 18 | 30% |
| Golf Etc | 67 | 24 | 36% |
| Cornwell Quality Tool | 53 | 19 | 36% |
| Blimpie Subs & Salads | 158 | 58 | 37% |
| Cottman Transmission | 163 | 75 | 46% |
| All Tune & Lube | 77 | 37 | 48% |
| Philly Connection | 63 | 30 | 48% |
Cross Posted at: Let's Talk Franchising
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Related reading:
See a full list of failure rates for 2001 - 2005 by franchise systems on Blue MauMau
The SBA gives this list to its preferred lenders to help these lending institutions decide what franchises to avoid and which franchises are good investments where their franchise owners pay back their outstanding loans. When a franchisee goes bankrupt, it has difficulty paying back its loans.
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