Worst 25 Franchises to Buy with the Highest Failure Rates, 2012

June 15th, 2012

A shuttered Quiznos sub shop in Kentucky

LEXINGTON, Ky. — Blue MauMau dares say what other publications won't. Here is our annual listing of major franchise lemons to avoid investing in. It's hard to believe but there are 23 major brands in 2012, where franchised stores actually fail worse than Quiznos. Ice cream shops have not done well.

Two franchising conglomerates, Kahala Corp and NexCen Brands, have the dubious honor of having two of their brands represented in the worst 25 with the highest franchise failure rates. Phoenix-based Kahala Corp. has #15 Blimpie and #19 Cold Stone Creamery franchises and New York City-based NexCen Brands has #18 Marble Slab and #22 Maggie Moo's. In a similar vein, #9 Cottman and #21 Aamco Transmissions were acquired in 2006 under American Capital Strategies Ltd. to eventually combine together under Aamco.

Worst	FRANCHISE BRAND 25 worst brands with 50 or more loan disbursements	Failure %
1	GOLF ETC.	71.08%
2	MR. GOODCENTS SUB' AND PASTA	64.71%
3	DREAM DINNERS	59.70%
4	PLANET BEACH	57.66%
5	CARVEL ICE CREAM	56.41%
6	PHILLY CONNECTION	55.77%
7	PETLAND	55.56%
8	BEEF O'BRADY'S	52.48%
9	COTTMAN TRANSMISSION	52.21%
10	TACO DEL MAR	51.35%
11	JUICE IT UP	50.98%
12	HUNTINGTON LEARNING CENTER	49.26%
13	ATLANTA BREAD COMPANY	49.06%
14	ALL TUNE AND LUBE	46.15%
15	BLIMPIE	45.74%
16	FAST FRAME	44.78%
17	KABLOOM	44.23%
18	MARBLE SLAB CREAMERY	43.66%
19	COLD STONE CREAMERY, INC.	41.93%
20	FOX'S PIZZA DEN	41.38%
21	AAMCO TRANSMISSIONS	39.90%
22	MAGGIEMOO'S (ICE CREAM)	39.39%
23	CORNWELL QUALITY TOOL COMPANY,INC	39.22%
24	QUIZNOS SUBS*	39.11%
25	BUDGET BLINDS	37.31%

Source: Small Business Administration. SBA 504 and 7(a) disbursed loans from 2001 to 2011

How bad are these failures? Franchise owners must make a personal pledge to use their own homes and assets as collateral should they not be able to pay back their Small Business Administration backed loans. Yet franchisees under these concepts still can't pay back their loans. That's how bad.

This data has been given to Blue MauMau directly from the Small Business Administration. It is the same list that the agency provides loan officers of its most trusted lenders and banks throughout the country.

This year ice cream shop and quick service restaurant franchises top the list. It's hard to believe that there are ice cream shops with higher failure rates than Cold Stone Creamery, since Blue MauMau has devoted so many articles to the brand and its lawsuits by franchisees, but Marble Slab and Carvel Ice Cream fail even more.

Huntington Learning is ranked 12th worst of all major franchise chains on the list with its 49 percent failure rate. It is by far the worst performing of the learning center concepts. Compare that to Goddard schools, franchising since 1988, which at 4.4 percent has one-tenth Huntington's failure rate.

Sub sandwich shops have done poorly. Unobtrusive Blimpie, Philly Connection and Mr. Goodcents have been quietly dying at the worst rates, despite all the attention Blue MauMau has given to loud Quiznos, ranked the 24th worst.

Many of these are well-known concepts to Blue MauMau writers. Some have been accompanied by news stories of financial ruin by franchisees, lawsuits, anger and even suicides.

How to use this list

These are the worst franchise brands, where franchise owners struggled more than others to pay back their SBA loans. To put it another way, this group is in the lowest performing (worst 16%) by loan failure rate of major franchise brands on the most recent SBA list of franchise brands.

Last year Kansas City-based franchising system Mr. Goodcents Sub had the dubious honor of being ranked second worst, having a 64.3 percent failure rate. This year its failures have climbed slightly to 64.71 percent. Compare that to another sub chain, Jimmy John's, which has only 3.5 percent in defaults.

Loan officers and franchise buyers realize that there are thousands of franchise opportunities to buy from, so why mess with the riskiest? Unless there is a miraculous reason why concepts with high failure rates are great investments, franchise investors may want to move on to other brands that have lower failure rates.

Each franchise brand listed has Small Business Administration backed loans with at least 50 disbursements, a substantial number. Using large figures for loan disbursements filters out smaller franchise systems.

Explanation of the table

This is ONLY a list of franchises that have received SBA loans. It does not account for conventional, traditional bank loans. Banks aren't about to release their conventional loan statistics anytime soon or reveal their methodology and weaknesses. But since it is part of the executive branch of the United States government, the Small Business Administration does. The SBA notes that the failure rate equals the number of liquidations plus number charged off divided by total number disbursed. The disbursement dollars are for the total amount of loans disbursed X $1,000. Franchise networks that have received less than 10 disbursements (small business loans) have been left off, leaving a list of some 580+ franchise systems from 2001 to 2011. Blue MauMau then eliminated brands with fewer than 50 loans.

Chart: BMM; Source: SBA

There is criticism of the accuracy of this list because bank officers sometimes do not fill out the form correctly. They sometimes have difficulty identifying whether their loan was to a franchise or not. Critics say that private lenders need better training. Others criticize that these are only Small Business Administration backed loans, which they claim are the worst performing of their loans and do not reflect their full system.

Nonetheless, it's one of the best peeks we have of franchise performance within brands.

It's not Blue MauMau's intent to publish only the worst brands. This journal will also shortly release the latest figures for the best franchises to buy with the lowest SBA loan failure rates.

Use Blue MauMau's Interactive Spreadsheet: Sort and filter your
worst franchise brands by failure rates using your own criteria

Editor's note: In the original SBA list, bankers inserted two names for Quiznos, Quiznos Subs and Quiznos, which both sorted into Blue MauMau's worst 25 franchises list. Blue MauMau combined both categories, which pulled Budget Blinds into the dubious honor of being in our list of the 25 worst franchise investments at #25.

Related reading:

SBA Loan Failure Rates of Franchisees by Brand, 2012 (full list of 580+ brand codes, sortable)
25 Worst Franchises to Buy, 2011
SBA Loan Failure Rates for Franchisees by Franchise Brand, 2010
Franchise Brands by Franchisee Failure to Pay Back SBA Loans, 2000 - 2007
Franchise Brands by Franchisee Failure to Pay Back SBA Loans, 2000 - 2005 (Sortable)
SBA's List of Franchise Loan Performance, a Tip Sheet at the Races
Bank Rankings of Franchises Not for Buyers
15 Worst Franchises, 2005
SBA Loans Sink

BMM

Comments

June 15, 2012 - 10:34am

Franchises fail long before they close the door and default on

the loan. Among these turkeys and many others franchisees are working just to stave off filing for bankruptcy.

They desperately hope to be able to hang on just long ewnough to pay off the bank and come to the end of the franchise agreement term and site lease.

This rating and its statististics make these companies look much better than they really are. There are many many more companies that belong on the turkey list. The world of FranWhacks is like an iceberg. Most of it is unseen because it is beneath the surface.

June 15, 2012 - 16:19pm

Dreamers, Richard

They desperately hope to be able to hang on just long ewnough to pay off the bank and come to the end of the franchise agreement term and site lease.

And the vast, vast majority won't make it. And while they try as hard as a druggie chasing a fix, typically the family unit implodes.

They don't stand back and see the inevitable big picture and they stupidly destroy what money cannot buy.

Old Sword

June 15, 2012 - 20:46pm

Re: Don't let the door hit them in the ass

Richard,

You and Ray are quite correct. I know of many Huntington franchisees still open hoping that they can just make it to the 10 yr mark and close up. They just want to get it to a break even level, hire a manager and then find a real job so they can pay their home bills out of money coming in rather than thru their savings.

But at least from a positive standpoint, Huntington moved up two places in the ranking from 14 to 12. They seem to be intent on gaining that number 1 slot.

June 19, 2012 - 13:03pm

Data Manipulation

I'm sorry but arbitrarily excluding franchise companies with less than 50 distributions and not accounting for the failures as a percentage of total units makes for a deeply flawed list. Which is worse, a company with 30 failures on 45 distributions where that number represents half of the companies total units, or a company with 30 failures on 50 distributions where that number represents only 4% of that brands total units? How about including a time frame as newer franchisors with a large number of failures should be consider much riskier than those that have been doing this for 20 or 30 years.

With 20 years in franchise development there I know that there are some brands on this list that definitely need to be identified with red flags, but there are many others that are very solid brands but are being painted in a negative light due to an unfairly skewed representation of the total numbers.

June 21, 2012 - 17:41pm

Talk about data manipulation

Talk about data manipulation and bad info designed to gain headlines & traffic.

I might be mistaken, but I am pretty sure Cottman Transmission only has about 100 units left and they haven't sold any new franchises in almost 6 years, so I don't see how they could have a 52% failure rate.

They definitely don't have 50 of their 100 remaining units as SBA loans.

Someone has their data wrong.

Or was this 50 units total over the past 40 years that had SBA loans?

June 21, 2012 - 18:28pm

Read the article first

You need to read the article to answer your own questions. Read.

June 15, 2012 - 10:55am

SBA Failure List Common Issues

While each of these brands no doubt has a unique story and circumstance, the data shows the following:

14 of 25, or 56% of the noted brands are "restaurants". This is another indicator that the US is over built (and sluggish) and doesn't have the demand to support an endless new inventory of restaurant venues.
Of the 14 restaurant brands, 10 or 71% are what I'd term as limited daypart coverage and appeal--sub shops, ice cream or narrow snack focus.
There really is the need for restaurants to hit a critical mass of customer appeal, and to generate enough in sales to support not only store level rent and labor, but also debt service, franchisee overhead and remodeling /CAPEX.
Focusing on the store level EBITDA metric, as the franchisors tend to do, is not adequate. EBITDA is never enough.

January 26, 2013 - 19:10pm

OK, indulge me. If not

OK, indulge me. If not EBITDA, what do you suggest?

June 15, 2012 - 11:06am

Why Failures Occur

Wow, truth is there should be a list of the Worst 100 because as Richard says there are a lot more out there. With almost 40 years in this space I can share with readers there are only a few reasons why these failures occur:

The business model, at the consumer level, has never validated and the owners are hogwashed into franchising by over zealous "franchise consultants" that need to make their payroll,
The business model, at the consumer level, has become stale and the company has not kept up with competition,
The business model was never fully documented in all of the aspects necessary to create a repeatable model,
The entity conducting the franchise was never fully educated on how to be an effective franchise company,
The franchise company has never created effective metrics for determining the correct location, and finally, and most likely if all of the above are not true and are in place,
The franchise company has never created the correct profile of who they should be recruiting into their system and all they are doing is selling franchises.

I totally believe, after surveying over 30,000 current and potential business owners for almost 150 brands, that you could have the best business model in the world but if it isn't sold to the right profile of individual it just won't work and failures are going to occur.

Even if franchise companies continue to claim, as they mostly do, that their franchisee population is broken into thirds: 1/3 are High Performers, 1/3 are Mid Performers and 1/3 are Poor Performers that means 2/3 of their entire system is comprised of mid to weak performers and that is not a good thing.

However, that being said, we can demonstrate from our research and documentation that the percentage of Mid and Poor far exceeds 2/3. UGH

I am delighted none of my clients are on this list.

Craig Slavin

Franchise Central and Franchise Navigator

Howard R. Morrill

June 15, 2012 - 18:33pm

What do you suppose the

percentage of franchise offerings that actually make economic sense for the franchisee is? If someone set the over/under at 20%, I'd bet the under. If it was set at 10%, I'd probably still bet the under.

June 15, 2012 - 19:00pm

small networks and dangerous investments

I would have said 10%. As industry observers our focus is too often on the larger brands and we forget that the greatest proportion of franchise offerings come from very small networks. Not all of them are lousy investments and the percentage might not change that much when looking at larger brands. But as a collective the small franchise network numbers represent the greatest percentage of franchisees. These just fly under our radar.

June 16, 2012 - 01:28am

Howard: right on the mark

It is exactly the franchisor's responsibility to be steward of the brand and make sure the franchisee economic model works before and while franchsing is under way.

One much more hears the franchisor talking up their economics to investors (our high margin, low CAPEX etc), yada, yada, but if it comes talking to franchisee economics, its...er, ah, we don't have the data, separate businesses, etc.

June 17, 2012 - 10:58am

Royalty Rate

Howard, many of the newer franchise systems would make economic sense if the implied royalty rate - the state royalty rate and value of the rebates- were under 5%. The ad fund contribution might be another 5 points. This would be a reasonable and profitable strategy for everyone.

Howard R. Morrill

June 17, 2012 - 15:15pm

re: Royalty Rate

I start from the premise that most franchisors don't franchise because they have capital; they franchise because they don't have capital. I think that is demonstrably true. Assuming I am correct, I would think franchisor failure rates would be even higher than they already are under this fee structure. Either that, or the franchisor would have to be obligated to provide next to nothing to the franchisees, i.e., incur no costs, in which case the question is why the franchisee is throwing away 5-10% of its revenues. Living out here in the upper left corner of the US, I know damn well that a 5% marketing fund contribution will provide next to no benefit to my franchisee clients in most cases.

This gets back to the basic problem with using "franchise statistics". Most franchise offerings are tiny, unknown, undercapitalized prayers. In the popular consciousness, they are just franchisors, no different than McDonalds or Holiday Inn.

June 17, 2012 - 16:33pm

Marketing Fund

Howard states: "Living out here in the upper left corner of the US, I know damn well that a 5% marketing fund contribution will provide next to no benefit to my franchisee clients in most cases."

Many franchisors have no sense of what their DMA is, either digitally or offline. But, for those franchisors who do understand what their marketing area is and how to exploit the network effects, 5% could work wonders. Look at Firehouse Subs, for example.

But, if McDonald's royalty rate is 4 points, no other QSR deserves a higher royalty rate.

Granville_Bean

June 17, 2012 - 18:48pm

McD "Royalty" rate

Webster proposes: "But, if McDonald's royalty rate is 4 points, no other QSR deserves a higher royalty rate."

McD in the US is basically a real estate company. F'sees must lease their site from McD. (You can't say, "Gee, I own a great site, I'll call McD and open one up for only 4% in royalties.") The "rent" is typically above market. As per the McD sample P&L that was posted in another topic, thre is no "Royalty" line, there is instead "Rent & Service". This will total a LOT more than 4%, and varies by the site and the deal..

June 17, 2012 - 21:21pm

Royalty Plus

GB: "As per the McD sample P&L that was posted in another topic, thre is no "Royalty" line, there is instead "Rent & Service". This will total a LOT more than 4%, and varies by the site and the deal."

Entirely agree.

Granville_Bean

June 18, 2012 - 18:30pm

Agree: details

McD charges what they call a "Service Fee" which is just about always 4%. Then there is "Rent" which is all over the place depending on the deal. I have seen 4% and I have seen 25%. There may or may not be a fixed dollar minimum "Base Rent" as part of the Percentage Rent. A McD F'see will also pay into a national advertising fund plus a regional advertising co-op, the total for both typically under 5%. But it's under 5% of HUGE sales numbers, so equates to a dominant advertising budget.

June 19, 2012 - 07:50am

More on Detail

GB points out: " McD F'see will also pay into a national advertising fund plus a regional advertising co-op, the total for both typically under 5%. "

My overall point was that the McD F'see will pay a reasonsable royalty rate, a reasonable markup for rent - because the franchisor has taken on the real estate risk- and a reasonable rate for advertising. These are the high water marks, yet worse brands routinely charge and get more.

June 18, 2012 - 03:34am

I wasn’t going to comment but

Howard writes; ‘Most franchise offerings are tiny, unknown, undercapitalized prayers. In the popular consciousness, they are just franchisors, no different than McDonalds or Holiday Inn.’

Now that is a fact but no one seems interested in discussing most franchise offerings in the context of how they influence anything including the health of franchising’s reputation and the carnage most they leave in the gutter or bloody close to it.

Actually, no one seems interested in discussing any of tiny unknown, undercapitalized players at all unless one should make a headline – but most aren’t even worthy of a headline.

Certainly most don’t sell enough franchises to make it to any ‘Worst’ list, but collectively they would probably come in at #1on most if not all. And if we were talking an SBA loan dfefault list, would the common denominators too often be a handfull of banks.

June 18, 2012 - 08:47am

I will have another to add to the list when my current

assignment is complete.

It is a new hamburger franchise asking for an initial fee for one store in the amount of - are you ready for this? - drum roll please - $ 250,000.

October 23, 2014 - 09:18am

I agree

June 16, 2012 - 00:15am

Failing Franchises

The golf shop being number one doesn't surprise me the least. The niche is rather small and with online being the cheapest place to buy your gear, competition is stiff. Food is the only thing you can't really buy online.

June 16, 2012 - 00:37am

The niche is rather small?

I would like to know what you mean by that Barry?

Golf has more players than any other sport in the world so it cannot be that. But you are right that online has taken a huge cut in the market. And the second cut comes from on-course golf shops where the pro or his team are usually very skilled at tempting fanatics. Those who play golf will know what I mean.

So perhaps the problem is location or perhaps it is just that the supply chain destroys profitability? Golf offers a huge market and with it is the highend products and an enormous array of accessories. All designed to ensure the insanity of the game is maintained.

June 16, 2012 - 10:12am

Quiznos is not so bad

We got rid of the guy who led this company (Rick Schaden) Things couldn't be looking up any better. (Grin) The word on the street is that he's going to open up a new chain of sub shops. What a guy! The Bernie Madoff of the franchise world. Forgive hundreds of millions of dollars in loans to get out and he wants to compete with franchise owners who made him millions.

Surely there is a place in hell for Ricky. One day before Fathers Day and his kids must be proud!! Continue raising the bar on human behavior Rick..... I mean Dick.

June 16, 2012 - 11:12am

I will agree with your

I will agree with your thoughts regarding Mr. Schaden aka "Dick". However, Quiznos is no better than it was when he left. Sure, they are back on television with not so memorable ads. What else has changed? The same bozos are still steering the ship in circles, and the same circles they went around before. Food prices continue to rise on supposed better quality ingredients, and coupons are coming in by the truckload. The threats of fines and closure continue for non-compliance on trivial issues without actual action to support said threats. Just like before only "Better Than Ever"!

June 16, 2012 - 18:01pm

Nothing's Changed At Q

The Wall Street fatcat got the concessions from the debt holders so he could continue to run the same scam that Dick ran for the past several years with fewer franchisees - force the franchisees to buy from the Q owned supplier and gouge them on the price. They've even done Dick one better on the coupons - buy a small sub and a drink and get a small sub of equal or lesser value free. Customers don't even have to buy the bag of chips. Expect Q to remain on this dubious list for the next year or two, until all the franchisees are squeezed dry and Q declares chapter 7 and disappears.

June 20, 2012 - 12:12pm

"Worse Than Ever"

The few stores that are hanging on and have hung on through the worse will not make it through the new "Better Than Ever" menu. Current store sales have dropped drastically since November of 2011. Sure winter sales are slow right? Not that slow where in the test markets they were extremely low. Quiznos corporation took the liberty of telling the store owners though it was the weather that made the sales slow, not the new test menu "Better Than Ever". Of course the store owners believed this store, simply because they see a light at the end of tunnel. It doesn't take a genius to figure out that it snows and gets cold in the winter months. We seen the last few remaining store in the program barely making it though.
Currently we ran non memorable commercials. Many in small blips that go unnoticed. Sure we were refinanced, but that was under a dire situation. True like the comment above it is the same people steering the ship. Why? They have no better place to go, and have taken a beating also. They to are up at night worried if this thing will ever turn around and they can be a part of it. How do I know? I too am part of it......
The "BTE" party in Vegas was a relaunch of our brand. We hoped that store owners could see that we do care, and brought in special guest speakers, and even built a make shift restaurant on stage. We did everything we could to make these owners comfortable into this new transition, including taste testing of the new menu. Though the conversation on the floor amongst store owners was dismayed, frantic and many seemed scared. Many were meeting new owners from other states to only hear their sad stories, and swap sad stories.
What truly needs to happen to make this brand truly work is.......... Bankruptcy. All the people from the corporation need to be removed including myself. The brand then needs to be relaunched either by a whole new entity, with successful people brought in from major successful brands in the same industry. The store owners need to be either let free completely or have an extremely low franchisee rate or lets say 3-5% max. This is just me speaking though, with only two years of experience.

June 20, 2012 - 18:24pm

Time To Start Looking

for another job James because even though Dick is no longer holding the reins you're working with his hand picked management team and for a Wall Street fatcat. Honesty is a trait that is discouraged both in Denver and Wall Street and the few who are honest in the face of cascading dishonesty are called whistle blowers and unemployed. You are a stand up guy and I wish you well.

June 16, 2012 - 15:28pm

Franchisees are as vulnerable as non-franchised small-businesses

Franchisees are as vulnerable as non-franchised small-businesses. That’s because francisees are eager to believe that Big Daddy franchisor will make up for their lack of entrepreneurial background and industry experience. So they don funny little hats, paste a smile on their faces and pretend to enjoy doing business with demanding customers and screaming kids.

Regarding golf courses, there hasn’t been enough demand to fill all the existing ones for many years. Even when there was, the high cost to build, maintain and manage made running them profitably extremely difficult. Conventional lenders would not finance them and credit company lenders had a belly full of foreclosures.

Jerry Chautin
Business and commercial real estate columnist & blogger
Former entrepreneur, commercial mortgage banker & business lender

Granville_Bean

June 18, 2012 - 18:24pm

But it's only SBA

Yes, it's disclaimed in the articles, but the implications may be glossed over. I agree that an SBA charge-off typically indicates a business failure. However an SBA loan paid off doesn't indicate a success. With a low-cost franchise, the business could fail, or merely hang on until the loan is paid off, paying it off from the income from the job they went back to.

And an even more major factor in using SBA stats to decide which systems are "best" is that some systems don't routinely use SBA loans. For example, with something like 12,000 franchised units, look how few SBA loans to McDonald's there were. As not every franchised 'store' uses an SBA loan, SBA proportion of loans paid off or charged off, it is not an actual proxy for success rate.

So yes it DOES say something, but be careful of WHAT.

Old Sword

June 19, 2012 - 20:31pm

RE: But its only SBA

" I agree that an SBA charge-off typically indicates a business failure. However an SBA loan paid off doesn't indicate a success."

Granville you need to go two steps further. SBA loans are mostly collateralized by the franchisee's home. Prior to the housing bust, people in a failing franchise tapped their home equity (in the booming housing market) to pay off the loan. Also, in years past, second hand franchises sold at much higher prices - even if they were losing money - because franchises were considered foolproof and thus, the failure was considered to be due to the owner not the business model. Money losing sites were sold at ridiculous levels because "it was a franchise" helping to pay off the SBA loan. Those same sites today are barely able to get a bid now that more people are aware of the true "success" of these so called business models.

So, in both cases, the SBA loan was paid off and avoided default - even though the franchise site never made money.

July 1, 2012 - 21:55pm

The worst of the worst, Golf Etc, was cranked out by Francorp

July 17, 2012 - 14:06pm

Suitable royalties?

I own a franchise that is unfortunately on the list, but in the 300's. The worst part is that we have a new management team of which several came from Cold Stone, who rank in the 25 worst.
We pay a royalty fee of 6% plus $300 to a brand fund. New stores are asked to pay an increase of a brand fund fee equaling 2%. I would like to know what most small franchisees pay in royalties to know if ours is on par.

Granville_Bean

July 20, 2012 - 19:29pm

Your industry

Guest says: "We pay a royalty fee of 6% plus $300 to a brand fund. New stores are asked to pay an increase of a brand fund fee equaling 2%. I would like to know what most small franchisees pay in royalties to know if ours is on par."

You need the norms for your industry which is ??????

Like if you sell tools out of a truck, it might be just coincidence if you happened to pay the same royalty rate as a pizza shop.

Granville_Bean

July 26, 2012 - 19:50pm

Ice Cream

Interesting how many ice cream chains are on the list. Oh it's so easy, look at the markup, a few scoops and charge four bucks....

Do you think that Fro Yo shops will be near the top after the segment has had a chance to shake out? I do, I hear people talking about how easy it would be to make money, it costs pennies and sells for dollars, why anyone can do it.

As soon as everyone tries to, that's when the fail comes.

August 14, 2012 - 08:40am

Huntington

As a franchise consultant...I had someone validate Huntington...after a few calls to zees the candidate came back and said "this concept is terrible!" So I called Huntington...asked for a few NEW names...jumped on those calls WITH my candidate... HOLY CRAP! My candidate was right! The zees...while having no issue with HLC per se...were not making any money and working like dogs! That was the LAST time I showed Huntington...

September 5, 2012 - 15:36pm

Worst Franchises

They missed one that should be at the top of this list - writer should check out Salad Creations - they have been pedaling franchises since 2005, sold over 100, had 80+ open, with only 25 still open. The writers at BlueMauMau should do a full investigation of this franchise. They inherited one of Quiznos guys - Steve Shaffer. This franchisor has sold a concept that in theory is a great idea, but unfortunately is unable to show a profit, which they have most likely known from the start. Very said for those that have closed and have secured their homes with SBA loans.

March 25, 2013 - 11:07am

Lose a franchise? No problem, work here!

Department Description
Dunkin’ Brands, Inc.

We are currently seeking a Sr. Fraud Analyst to join the Dunkin' Brands team!

The Sr. Fraud Analyst will provide financial analytical support in conducting fraud investigations involving franchisee underreporting and other improprieties. In addition, the Loss Prevention Analyst assists in the identification of underreporting franchisees through the development of tools and templates used for analysis. The Loss Prevention Analyst further supports EC sales growth by strengthening the Dunkin’ Brands franchise system through the promotion of broad based deterrence and detection of franchisee underreporting as well as employee theft. Also by undertaking proactive analysis of transactional records, to link unidentified transactions to known or suspected fraudulent activity. The Loss Prevention Analyst may also assist in internal investigations of employee fraud or other violations of corporate policy.
Detailed Description
The primary accountabilities for this position include:

· Develop and present evidence of underreporting or other franchise agreement violations. Perform financial analysis, payroll analysis, cash flow analysis, tracing funds, etc. in the course of franchisee investigation in partnership with field Loss Prevention Manager(s). Coordinate and communicate investigative findings with outside consultants, attorneys, and others who support LP cases. Prepare internal reports, schedules, and exhibits to present investigative findings. Participate in settlement discussions with Franchisees and attorneys to articulate LP investigative findings as necessary.

· Develop, refine, and implement a variety of new tools, templates, and processes to analyze franchisee business records. Create templates used to efficiently and effectively analyze large amounts of franchisee documents and data. Continuously improve the methods used to analyze and compile data and records in support of LP investigations.

· Proactively identify possible instances of employee theft through the use of Business Intelligence (BI) systems for both Dunkin’ Donuts and Baskin Robbins brands.

· Plan and conduct franchisee or franchisee employee interviews with field Loss Prevention Manager(s) Develop and present LP training sessions (New Franchisee Business Course, OM 110, 111, etc) Support internal investigations as necessary through interviews, and preparing reports, schedules, and exhibits.

Job Requirements
The qualifications for this position include, but are not limited to the following:

· BS/BA degree required, advanced degree or professional certification desired CFE (Certified Fraud Examiner) preferred
· Forensic accounting / auditing background - desirable
· 3 or more years experience in a fraud/investigative/auditing unit preferred.
· 2 years or more of analytics experience, including modeling and data analysis
· Experience in fraud/risk data modeling

October 6, 2014 - 17:15pm

What is Experience in fraud/risk data modeling?

Is that when the Fraud Investigator counts the cups and coffee beans.

In Subway they count the protein you buy and calculate how much income you should have made.

April 12, 2014 - 10:31am

Has anyone noticed....

...all the ass kissing for Roark Capital? Seems the lawyer types and IFA purveyors dare not speak heresy for fear of losing account dollars. These highly debt laden acquisitions are grinding out franchise sales and are very much inside the IFA circle of equity extractors. Ask a Carvel franchisee how things are going. Ask a Kat Cole franchisee how the spreading those artery clogging cinnabun indulgences to every outlet that would have them bodes well for their franchises who are losing sales by the tens of thousands. There's never been a camera or news article these Roark Capital Focus Brands people will pass up. A gravy train indeed for all the hypocrites who trip over themselves while trying to get to know one the of managing directors of this scheming monopoly developing concern. Franchisees are best advises to look elsewhere or at the very least question the concocted and skillfully crafted FPR's. All is not what it appears to be.

April 12, 2014 - 10:42am

Re: Has anyone noticed

Actually from every indication the franchise systems that are part of the Roark portfolio are doing extremely well. Have you seen the returns on a Massage Envy?

All what appears not what it appears to be? Do you have any substance at all behind what you are claiming or just a bunch of BS innuendos.

April 12, 2014 - 11:45am

Re: Has anyone noticed

"Have you seen the returns on a Massage Envy?"

I'm not the original visitor. But okay, I'll bite. No, I haven't seen the returns of an average Massage Envy franchise. What are they? (Sources, please.)

I agree with you on the emptiness of bloviating without any substance and only innuendo.

April 12, 2014 - 13:34pm

Re: Noticed

Several friends who own some. That is all they talk about.

April 13, 2014 - 13:01pm

Plenty of substance...

...brainiac. Do some reading on your own. Massage Envy is but one of this debt laden concepts. You were give two right in the article I wrote. Pay attention or keep your comments to yourself. You know NOT of what you speak.

April 13, 2014 - 14:20pm

Re: Plenty of Substance

Two things

1. You did not write an article you wrote a blog post

2. Your blog post did not have any substance - all it had were innuendos.

Having a verified fact usually is required to call something more than innuendo. Exactly what verified fact did you have in your post?

April 14, 2014 - 14:33pm

Actually,

the same as you had in yours. Move along as you're likely earning a portion of your income via the ass kissing I spoke of. And thanks for clearing up, via enumeration, the difference between and article and a post. Clearly, you're expert at blogging.

Lionel Hutz PA

April 16, 2014 - 14:46pm

I think this is a new flavor of Peep

you're likely earning a portion of your income via the ass kissing I spoke of

Is this a lucrative profession for you?

If you administer a single kiss, does the recipient respond in kind or simply turn the other cheek?

April 12, 2014 - 19:11pm

Q Not #1?

Hard to believe there are 20+ franchises with a failure rate higher than Quiznos. Of course the 4,000 restaurants that closed in 4 years is a record that will never be broken. Stay away from any Schaden "opportunity" like Q or Smashboogers. You've been warned.

July 15, 2014 - 22:21pm

Failures

Very surprised to see Quiznos wasn't much higher.
Still, a 39% failure rate is AWFUL.