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2 Replies Latest reply: Jan 9, 2010 5:52 AM by Mongoose RSS

SBA Financed Quiznos:1,878 Failures in 2008 alone! Apprentice
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In 2008, there were 1,878 SBA financed Quizno's restaurants that failed. That totaled over $276 Million dollars charged off by lenders, most of which was reimbursed by the SBA. According to SBA data, that was about 20% of all Quizno's restaurants that were financed. That's 1 in 5!

What lessons are there to be learned here?

1) Just because a franchise is a well known name, it doesn't necessarily mean the business will succeed. There really is no such a thing as a "plug 'n play" franchise concept. Every business, franchise or independant, service or retail, big or small, requires a major committment of time, effort, and money. Even though someone has developed and refined a concept, this does not make it fool proof. Anyone who claims a concept is a "can't lose" is trying to sell you a bill of goods.

2) Just because you can get financing, it doesn't mean you are guaranteed to succeed. Banks have certainly lending parameters, and if you met those parameters, you will be approved for financing. This does not, however, guarantee that your business will succeed. Banks are playing the odds based on their historical experiences. Of course, historical results were no help when the current economy hit and businesses that were previously successful started dropping like flies.

3) An SBA guarantee helps the lender, not the borrower. If you have an SBA guaranteed loan, it really doesn't mean much to the borrower. The assurance is for the lender, and was offered in the first place in order to compel the lender to make the loan. Once the business fails, the SBA guarantee is of no use to the borrower, and will not result in automatic waiver the loan. The lender will continue to have every legal option available to it.
  • Re: SBA Financed Quiznos:1,878 Failures in 2008 alone!
    DomainDiva Master
    Currently Being Moderated
    Quiznos food is terrible! No wonder these franchises failed. The food is overcooked, veggies are stale and limp, sandwiches are greasy. Who wants to put that bile into their bodies? Please no more excuses!

    My husband and I spent 20.00 there about a year ago. Never ever again!
  • Re: SBA Financed Quiznos:1,878 Failures in 2008 alone!
    Currently Being Moderated
    1,878 Quiznos failures in 2008? There are only 5,000 Quiznos in the whole US, so it's hard to imagine that over a third of them went out of business. And not many of the Quiznos that get opened are via SBA loans because they require collateral.

    It's certainly true that any small business, franchise or not, has high failure rate. But I think these particular stats could potentially be off. Do you have a source? How does that compare to Subway, which has 5 times as many locations?


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