News

Quiznos, CiCi's, Cold Stone among franchise businesses with high default rates

September 12, 2014

The Wall Street Journal this week examined the 10 "worst franchise brands," based on SBA loan defaults. The list included three restaurant brands – Cold Stone Creamery, Quiznos and CiCi's Pizza.

Topping the list was Planet Beach, with a 41.1 percent default rate. Quiznos was No. 3 at 29.6 percent ($38.4M); Cold Stone Creamery was No. 4 with 29.4 percent ($34.1M); and CiCi's Pizza was No. 7 with a 20.9 percent default rate ($7.3M).

The WSJ's analysis shows that these 10 brands have defaulted at more than double the rate of borrowers for other franchised businesses.

"Franchisees of those 10 brands have left taxpayers on the hook for 21 percent of all franchise-loan charge-offs in the past decade, collectively failing to pay back $121 million in SBA-guaranteed loans from 2004 through 2013," the story said.