Quiznos and Cold Stone Creamery are some of the popular brand names that were found to have among the highest rates of franchise defaults, according to analysis from the Wall Street Journal.
Using data from Small Business Administrations loan defaults, the Journal determined that Planet Beach Franchising had the highest failure rate among companies whose franchisees took out at least 100 SBA loans from 2004 to 2013.
While Planet Beach's over 41 percent default rate is the highest, its franchisees did not skip out on the most money. The Journal's analysis showed that honor went to Quiznos and Cold Stone, whose shops left tax payers on the hook for $38.4 million and $34.1 million, respectively.
According to the Journal, Planet Beach CEO Stephen Smith blamed his franchisees' high default rate in part on a tax levied in 2010. Quiznos pointed to "slower sales, high rent, increased competition and economic pressures," and Cold Stone's owner Kahala Franchising cited the recession and prior "extreme growth," the publication reported.