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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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