Some of the perennial worst franchises to buy — hoagie sandwich shops, ice cream stops, and auto repair garages — dominate this year’s list. The recession has only helped their failure rates climb.
Once again the Small Business Administration has given its banking list to Blue MauMau. We are publishing it to help inform franchise investment decisions. Taken straight from an SBA loan performance list covering the years from 2001 to 2010, it’s the same list that the agency provides loan officers of its most trusted lenders and banks throughout the country.
Many of these worst concepts are no strangers to Blue MauMau, where lawsuits between franchisors and franchisees have been reported on such brands as Atlanta Bread, Quiznos, or franchising conglomerate Kahala’s Blimpie and Cold Stone Creamery. In fact, brands of diversified franchising firms seem to lose their focus, appearing frequently in the worst list. For example, Marble Slab Creamery and The Athlete’s Foot of franchising conglomerate NexCen Brands appear in the worst performing brands. (The loan disbursements for The Athlete’s Foot are too few to appear in our top 25 list, but its failure rate is 12th worst among the full 580 franchising brands listed.) The stressed-out store owners from these brands often create public forums, sharing information on all sorts of problems in their systems.