Best and Worst Franchises Listed by SBA Loan Defaults
Posted on June 8, 2013 by William Bruce
The absoute worst franchise in America by loan default rate is Wings-N-Things with a devastating 94% default status.
As a business broker, I’m often asked about franchises. A franchise can be an excellent investment if — big “if” — you choose the right one.
To shed some light on the issue, the Small Business Administration has provided us with their latest list of franchise brands ranked by the percentage of loans in default status.
This list is for a 10-year period ending September 30, 2011. Only franchise brands with a minimum of 10 loans are included.
Some franchise brands have been ineligible for SBA guaranteed loans from their inception. This is most commonly due to legal issues created in their franchise documents. For a list of franchises and the issues which render them ineligible for SBA loans, please see our article by clicking here.
From the SBA loan default list, these are the franchise brands with default rates above 40 percent for the 10 year period ending September 30, 2011:
Brand Failure Percentage
WINGS-N-THINGS 94.12%
TILDEN FOR BRAKES CAR CARE CENTER 92.86%
NOBLE ROMAN PIZZA 86.36%
JUST-A-BUCK 81.82%
LA PALETERA 81.25%
EXECUTIVE TANS 80.85%
COUNTRY CLUTTER (BED & BREAKFAST) 80%
BEAR ROCK CAFE 80%
BLOCKBUSTER VIDEO 78.57%
SUPER SUPPERS 76.92%
PRO GOLF 76.47%
SHAPEXPRESS 75%
ATHLETE’S FOOT 73.91%
STEAK ESCAPE 71.43%
GOLF ETC. 71.08%
