Brand-level SBA 7(a) default rates from 36,904 franchise loans (FY2020-2026): UNITS 23.8%, Dickey's 21%, Jersey Mike's 0%. Full data tables inside.
Quick answerAcross 36,904 funded SBA 7(a) franchise loans approved since fiscal 2020, 1.7% had been charged off and another 1.6% were in liquidation as of SBA's March 31, 2026 data release. Among brands with 50 or more funded loans, default rates range from 0.0% (Jersey Mike's, The Goddard School) to 23.8% (UNITS Moving & Portable Storage).
Among franchise brands with at least 50 funded SBA 7(a) loans approved since fiscal 2020, brand-level default rates run from 0.0% (Jersey Mike’s, The Goddard School, Primrose Schools) to 23.8% (UNITS Moving & Portable Storage), per SBA loan-level data released March 31, 2026. Across all 36,904 funded franchise-tagged loans in that window, 1.7% have already been charged off and another 1.6% sit in liquidation. The averages tell you almost nothing; the brand you pick is the risk decision. For the broader statistical backdrop, including closure math and the “90% success” myth, start with our franchise failure statistics pillar. This post is the brand-level layer underneath it.
The numbers come from the SBA’s public 7(a) loan-level FOIA dataset, specifically the release dated March 31, 2026, which covers loan approvals from fiscal 2020 through the first half of fiscal 2026. That file contains nearly 374,000 loans, of which 44,574 (11.9%) carry SBA’s own franchise-brand tag. We dropped cancelled approvals and undisbursed commitments, leaving 36,904 funded franchise loans.
We count a loan as a default when its status is “charged off” (632 loans, 1.7%) or “in liquidation” (588 loans, 1.6%). Loans that are merely delinquent, past due, or deferred (another 1,374, or 3.7%) are excluded from the default figure. We then joined the loan file against the 2,000+ FDDs VetMyFranchise has parsed to attach Item 7 investment ranges and Item 19 disclosure status to each brand.
Three limits you should hold in mind while reading. First, SBA only tags a franchise name on about 12% of loans, so per-brand loan counts are undercounts. Second, the tags are messy (Super 8 appears in the federal file as “Super 8 by Wyndhan”), and we normalized them conservatively. Third, and most important, these loans have had at most six years to season. A loan approved in 2024 has barely had time to fail. Every rate below is a floor, not a lifetime figure. Our industry-level breakdown of SBA default rates covers the category view; this page ranks the brands themselves.
Among the 163 brands with at least 50 funded loans, these ten show the highest share of loans charged off or in liquidation as of March 31, 2026.
| Brand | Funded Loans | Charged Off | In Liquidation | Default Rate | Item 7 Investment (2026 FDD) |
|---|---|---|---|---|---|
| UNITS Moving & Portable Storage | 63 | 0 | 15 | 23.8% | $732,640-$1,269,400 |
| Dickey’s Barbecue Pit | 62 | 4 | 9 | 21.0% | n/a |
| Mr. Appliance | 73 | 10 | 1 | 15.1% | $147,750-$273,175 |
| 360 Painting | 73 | 10 | 0 | 13.7% | $112,350-$196,000 |
| Aire Serv | 68 | 8 | 1 | 13.2% | $113,808-$271,708 |
| Rainbow International | 79 | 9 | 1 | 12.7% | $185,336-$351,900 |
| College Hunks Hauling Junk | 106 | 10 | 3 | 12.3% | n/a |
| The Grounds Guys | 159 | 17 | 2 | 11.9% | $107,650-$252,850 |
| Charleys Philly Steaks | 50 | 0 | 5 | 10.0% | $203,492-$1,004,447 |
| iFoam | 64 | 4 | 2 | 9.4% | n/a |
Source: SBA 7(a) FOIA loan data as of March 31, 2026; investment ranges per each brand’s 2026 FDD Item 7 in the VetMyFranchise database. “n/a” means the brand’s current FDD is not in our parsed set.
Two patterns stand out. UNITS tops the list with 15 of 63 loans in liquidation and none yet charged off, meaning the final losses are still being worked out. Its loans are also big for the list, averaging $1.1 million, consistent with the $732,640 to $1,269,400 entry cost in its 2026 FDD, so each bad loan represents serious money.
The second pattern: four of the eight worst rates belong to a single parent. Mr. Appliance, Aire Serv, Rainbow International, and The Grounds Guys are all Neighborly-owned home-service brands. That tracks the category-level finding that home services carries the highest default rates of any franchise sector. These are sub-$350K concepts where SBA working-capital loans fund nearly the whole venture, ramp-up is owner-dependent, and there is little collateral to reorganize around when revenue stalls.
Charleys Philly Steaks is worth a note of its own. Zero charge-offs, but five loans in liquidation from just 50 funded, every one of them an unresolved outcome. Watch how that cohort settles.
Here are the ten best performers among the 30 brands with 150 or more funded loans, where a low rate actually means something.
| Brand | Funded Loans | Charged Off | In Liquidation | Default Rate | Avg Loan Size |
|---|---|---|---|---|---|
| Super 8 by Wyndham | 259 | 0 | 0 | 0.0% | $2.09M |
| The Goddard School | 235 | 0 | 0 | 0.0% | $1.91M |
| Jersey Mike’s | 226 | 0 | 0 | 0.0% | $496K |
| The Learning Experience | 169 | 0 | 0 | 0.0% | $690K |
| Primrose Schools | 153 | 0 | 0 | 0.0% | $2.09M |
| Naturals2Go | 237 | 1 | 0 | 0.4% | $130K |
| Motel 6 | 217 | 0 | 1 | 0.5% | $2.88M |
| Cold Stone Creamery | 158 | 1 | 0 | 0.6% | $412K |
| Red Roof Inn | 156 | 0 | 1 | 0.6% | $2.68M |
| Home Instead | 151 | 0 | 1 | 0.7% | $806K |
Source: SBA 7(a) FOIA loan data as of March 31, 2026.
The UPS Store, the single largest franchise borrower base in the file with 800 funded loans, runs 0.9%, and Domino’s matches it at 0.9% across 212. The winners cluster into three groups: hotels and premium child care (Goddard at $1,003,500 to $8,908,000 per its 2026 FDD Item 7, Primrose, The Learning Experience), where multimillion-dollar loans are secured by real estate; mature QSR systems like Jersey Mike’s; and low-cost routes like Naturals2Go vending.
Cold Stone Creamery deserves the asterisk of the decade. In a 2014 CNBC analysis of SBA data covering fiscal 2004-2013, Cold Stone franchisees defaulted on roughly 29% of SBA loans, second only to Quiznos at 30%. In the current FY2020-2026 cohort it sits at 0.6%. Some of that is genuine change under new ownership and tighter underwriting, and some of it is simply that these loans are young. Which is exactly why a default rate without a date attached is worthless.
Vetting a specific brand? The full 12-section FDD analysis covers Item 19 earnings, Item 20 closures, fee footnotes, and a buyer verdict personalized to your capital and market: $49 per brand.
Conventional wisdom says cheaper franchises are safer bets because there is less debt to service. The joined data disagrees. Across the 128 brands we matched cleanly to a parsed FDD with 20 or more funded loans (7,435 loans total), default rates by Item 7 investment midpoint look like this:
| Investment Tier (Item 7 Midpoint) | Brands | Funded Loans | Default Rate |
|---|---|---|---|
| Under $150K | 13 | 489 | 2.5% |
| $150K-$350K | 39 | 2,599 | 2.8% |
| $350K-$1M | 51 | 2,853 | 2.9% |
| $1M+ | 25 | 1,494 | 2.2% |
The $1M+ tier performs best, and it is not close to random. Big-ticket concepts are dominated by hotels and child-care centers where the loan is collateralized by a building, borrowers clear higher net-worth screens, and lenders underwrite harder because more of their money is at stake. A $150K working-capital loan for a painting territory has none of those backstops. Cheap to enter does not mean safe to finance.
We also tested a hypothesis we wanted to be true: that brands confident enough to publish an Item 19 earnings claim would show better loan performance. They don’t. In the matched sample, brands with an Item 19 defaulted at 2.7% of funded loans; brands without one defaulted at 2.6%. Statistically, that is a tie.
The lesson is about what each document measures. An Item 19 describes the revenue of units that survived and reported. A loan default records a specific borrower who couldn’t cover debt service. A brand can publish a beautiful median AUV while its newest franchisees, who paid more to build and borrowed at higher rates, fall behind. Read the Item 19 for earnings potential and the loan data for downside evidence, and never substitute one for the other.
Your bank has information you likely haven’t seen. Before an SBA loan closes, the brand must appear on the SBA Franchise Directory. That list was eliminated in August 2023 under SOP 50 10 7, then reinstated effective June 1, 2025 under SOP 50 10 8, and franchisors had to re-certify to stay on it. If a brand is absent, SBA financing is off the table entirely, and that absence is itself a data point.
Beyond eligibility, SBA lenders differ enormously by brand. High-volume franchise lenders keep internal performance files on every system they’ve financed and will quietly decline concepts that have burned them, even ones that remain SBA-eligible. Lenders also apply borrower-side floors that the franchisor’s sales team never mentions; our guide to SBA credit score requirements for franchise loans covers where those lines sit. And the loan structure matters as much as the approval: real-estate-heavy concepts often pair better with a 504 than a 7(a), a distinction we break down in 7(a) vs. 504 for franchises. Ask any prospective lender one direct question: “How many loans have you made in this system, and how have they performed?” A lender who hesitates is telling you something.
Treat every number on this page as one input, weighted by its limitations.
The loan data tells you whether banks got paid back. The FDD tells you why or why not. Read both before you sign either. Get the complete picture on any brand with a full FDD analysis for $49, or start by comparing brands side by side in our franchise database.
Among brands with at least 50 funded SBA 7(a) loans approved between fiscal 2020 and March 2026, UNITS Moving & Portable Storage shows the highest default rate at 23.8%, with 15 of 63 funded loans in liquidation. Dickey's Barbecue Pit is second at 21.0%, with 13 of 62 loans charged off or in liquidation.
As of SBA's March 31, 2026 data release, 1.7% of the 36,904 funded franchise-tagged 7(a) loans approved since fiscal 2020 had been charged off, and another 1.6% were in liquidation, roughly 3.3% combined. These loans are at most six years old. Fully seasoned historical cohorts defaulted at far higher lifetime rates, which is why any quoted average needs a date attached.
Yes. A brand that is not listed on the SBA Franchise Directory, reinstated June 1, 2025 under SOP 50 10 8, cannot receive SBA financing at all. Beyond the directory, individual lenders track brand-level portfolio performance and will decline or restrict brands whose loans have gone bad for them, even when the brand remains SBA-eligible.
No. In our sample of brands matched between SBA loan data and FDDs, brands that publish an Item 19 earnings claim defaulted at 2.7% versus 2.6% for brands that do not. An Item 19 tells you what existing units earn; it says nothing about whether a franchisee borrowed sensibly against those earnings.
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