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Thursday, June 25, 2015

Top 10 Worst Franchises to Buy in America

Top 10 Worst Franchises to Buy in America
Franchises are one way that entrepreneurs can own their own business. In a franchise, the franchisor, who owns the brand, allows franchisees, or entrepreneurs, to sell their products under a license agreement. Although there is less risk in a franchise for an entrepreneur than going out on their own, not all franchises are equal. Some are considered the worst as far as failure rate.

According to BlueMauMau.com, a franchising news website, these top 10 franchises are the worst in America. Their failure rates are included.

#1 - Golf, Etc. - 71.08 percent
#2 - Mr. Goodcents Sub and Pasta - 64.71 percent
#3 - Dream Dinners - 59.70 percent
#4 - Planet Beach - 57.66 percent
#5 - Carvel Ice Cream - 56.41 percent
#6 - Philly Connection - 55.77 percent
#7 - Petland - 55.56 percent
#8 - Beef O'Brady's - 52.48 percent
#9 - Cottman Transmission - 52.21 percent
#10 - Taco Del Mar - 51.35 percent

The risk for small business owners

Many small business owners buy a franchise that is funded through the Small Business Administration (SBA). But there are risks even with loans through SBA banks. Franchise owners must use their own homes and assets as collateral for the loan which they would be at risk to use if they can't pay back their SBA-backed loans.

So, the question is, would you as an entrepreneur want to invest in a franchise that has a failure rate greater than 50 percent? Probably not. Other franchises in the report with high failure rates included Blimpie, Cole Stone Creamery, Quiznos Subs, and Budget Blinds.

To read more, visit www.bluemaumau.org/11665/worst_25_franchises_highest_failure_rates_2012
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