Franchise intelligence
Failure measured the hard way: the share of each brand's FY2020–23 SBA loans that lenders charged off. No surveys, no franchisor marketing — funded loans that went bad. Brands need 40+ loans to be ranked. Looking for the safest brands instead? → Also: failure by state · failure by bank.
Every brand links to its full record — costs, lenders, locations, and recent deals. Sort every scored brand by failure rate →
Brand risk often starts with the category. The same FY2020–23 cohort, by sector:
| Industry | Failure rate | Recent loans |
|---|---|---|
| Transportation & logistics | 5.04% | 891 |
| Wholesale & distribution | 3.53% | 996 |
| Construction & trades | 3.18% | 3,547 |
| Facilities & business services | 2.95% | 1,709 |
| Education & training | 2.86% | 494 |
| Professional services | 2.84% | 2,675 |
| Recreation & fitness | 2.68% | 1,198 |
| Retail | 2.61% | 2,931 |
| Media & software | 2.52% | 242 |
| Real estate services | 2.49% | 560 |
| Repair & personal services | 2.36% | 2,744 |
| Restaurants & hospitality | 2.1% | 3,589 |
Under $350K
3.79%
weighted failure rate · 1477 brands
$350K – $1.5M
1.11%
weighted failure rate · 1456 brands
Over $1.5M
0.32%
weighted failure rate · 526 brands
Cheap to enter usually means cheap to copy. Brands with bigger typical deals tend to fail less — more capital at closing, stronger operators, and territory that means something. The pattern shows up consistently in the loan data.
The share of a brand's FY2020–23 SBA loans that were charged off — the lender gave up on collecting. Loans newer than 2023 are too young to score, so they're excluded. A charge-off usually means the business failed.
Under 1% of SBA loans charged off is excellent. 1–3% is normal. Above 3% deserves hard questions before you sign anything — ask the franchisor directly why deals fail.
Not by itself. Failure concentrates in weak locations and undercapitalized buyers. But a brand failing at 3x the rate of its competitors is telling you something about unit economics, support, or saturation.
DealRoom analysis of public SBA lending records. Failure = charge-off rate on the FY2020–23 loan cohort; newer loans are too young to score.
A brand's failure rate is one input — your loan structure is the other
Get both right before you sign. A specialist can pressure-test the brand AND structure the deal so a rough year doesn't sink you.
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