Franchise intelligence

The franchises that fail the most

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.

Highest failure rates by brand

Every brand links to its full record — costs, lenders, locations, and recent deals. Sort every scored brand by failure rate →

Riskiest industries

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

Does deal size predict failure?

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.

Common questions

What does a franchise failure rate mean here?

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.

What's a normal franchise failure rate?

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.

Does a high failure rate mean I shouldn't buy the franchise?

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.

CapBench analysis of public SBA lending records. Failure = charge-off rate on the FY2020–23 loan cohort; newer loans are too young to score.

AI summary

This page ranks the franchise brands with the highest SBA loan failure rates, measured as the share of each brand's FY2020–23 7(a) loans that lenders charged off — funded deals that went bad, not survey data. It also breaks failure down by industry sector and by deal size, showing that cheaper-to-enter brands tend to fail more often. Brands need 40+ loans to be ranked, and it's built for buyers pressure-testing a franchise before they commit. This is general information, not legal, tax, or financial advice, and CapBench is not a lender.

Source: CapBench SBA Intelligence, based on public SBA, lender, franchise, FDIC, and related records. CapBench is not a lender and does not guarantee financing.

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