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Finding Franchise Heaven and Avoiding Franchise Hell
Franchises offer opportunities but also pitfalls, so buyer beware
(page 3 of 4)
Rates of Loan Failure
The federal Small Business Administration each year releases a list of the failure rates on SBA-backed loans to franchise owners. The list is an important indicator of the success rate of franchise brands in America. The latest list includes data from Oct. 1, 2001 through Sept. 30, 2011. Hawaii Business filtered the SBA list to only include franchises with 50 or more loan disbursements and at least one location in Hawaii.
| BRAND | FAILURE RATE | NUMBER OF LOAN DISBURSEMENTS |
|---|---|---|
| AAMCO TRANSMISSIONS | 39.9% | 198 |
| ACE HARDWARE | 15.0% | 280 |
| AMERIPRISE FINANCIAL SERVICES | 0% | 63 |
| ANYTIME FITNESS* | 7.83% | 217 |
| ARBY’S | 18.6% | 86 |
| BASKIN-ROBBINS 31 ICE CREAM | 23.58% | 229 |
| BEST WESTERN INN | 5.04% | 238 |
| BLIMPIE | 45.74% | 129 |
| BUDGET BLINDS | 37.31% | 67 |
| BUFFALO WILD WINGS GRILL & BAR | 4.76% | 63 |
| BURGER KING | 10.39% | 77 |
| CARTRIDGE WORLD STORES | 25.83% | 151 |
| CENTURY 21 | 7.46% | 67 |
| CERTA PROPAINTERS | 19.18% | 73 |
| CHEVRON (GAS STATION) | 12.32% | 138 |
| CHOICE HOTELS INTERNATIONAL INC. | 5.99% | 317 |
| CHURCH’S FRIED CHICKEN | 19.61% | 51 |
| COLD STONE CREAMERY, INC. | 41.93% | 787 |
| CURVES FOR WOMEN | 25.35% | 359 |
| DAIRY QUEEN | 9.41% | 542 |
| DAYS INN | 6.19% | 420 |
| DENNY’S RESTAURANT | 10.67% | 75 |
| DOMINO’S PIZZA | 22.18% | 284 |
| EDIBLE ARRANGEMENTS | 16.16% | 198 |
| FANTASTIC SAM’S | 24.15% | 207 |
| FASTSIGNS | 18.1% | 105 |
| GENERAL NUTRITION CENTER | 22.81% | 57 |
| GREAT HARVEST BREAD CO. | 10.77% | 65 |
| HOLIDAY INN | 5.8% | 69 |
| HOME INSTEAD SENIOR CARE | 3.33% | 60 |
| INTERNATIONAL HOUSE OF PANCAKES | 9.01% | 111 |
| JACKSON HEWITT TAX SERVICE | 9.62% | 52 |
| KENTUCKY FRIED CHICKEN | 12.7% | 63 |
| LIBERTY TAX SERVICE | 15.63% | 128 |
| LITTLE CEASAR’S PIZZA | 4.35% | 184 |
| MAACO AUTO PAINTING CENTER | 29.09% | 165 |
| MAIL BOXES ETC. USA*** | 15.1% | 457 |
| MARBLE SLAB CREAMERY | 43.66% | 142 |
| MASSAGE ENVY | 4.74% | 211 |
| MATCO TOOLS (RENT TOOLS) | 35.09% | 285 |
| MERLE NORMAN COSMETICS | 23.75% | 80 |
| MIDAS MUFFLER SHOP | 18.75% | 96 |
| MOE’S SW GRILL | 20.16% | 124 |
| NAPA AUTO PARTS | 10.96% | 73 |
| PAPA JOHN’S PIZZA | 23.16% | 95 |
| PLATO’S CLOSET* | 1.37% | 73 |
| POPEYE’S FAMOUS FRIED CHICKEN | 12.35% | 81 |
| QUIZNO’S SUBS** | 43.75% | 112 |
| QUIZNOS** | 38.83% | 1857 |
| RADIO SHACK | 20.55% | 73 |
| RAMADA INN | 11.31% | 168 |
| RE/MAX REALTY** | 17.74% | 62 |
| REMAX** | 14.75% | 61 |
| ROBEKS JUICE | 31.88% | 69 |
| SERVICEMASTER | 9.84% | 122 |
| SERVPRO | 7.79% | 244 |
| SHELL SERVICE STATION | 10.0% | 90 |
| SIGN-A-RAMA | 25.88% | 85 |
| SNAP-ON-TOOLS | 9.8% | 51 |
| SUBWAY SANDWICH SHOP | 9.13% | 2508 |
| SYLVAN LEARNING CENTER | 25.47% | 161 |
| TACO DEL MAR | 51.35% | 74 |
| TCBY | 29.41% | 51 |
| THE UPS STORE** | 16.67% | 318 |
| TRUE VALUE HARDWARE | 20.48% | 83 |
| UPS STORE** | 16.11% | 298 |
* First Hawaii location expected to open soon.
** Hawaii Business confirmed with the SBA that these franchise companies listed with similar names are the same company.
*** Mail Boxes Etc. rebranded as the UPS Store.
Note: The full SBA list includes data for nearly 580 franchise brands and only includes franchises with 10 or more loan disbursements. Full list at tinyurl.com/6nx478e.
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