2. Quiznos
Number of SBA loans : 2,019
Total dispersed: $291.7 million
Average loan size: $144,458
Failure rate: 25%
The shop known for its toasted subs looks like a riskier investment than its formidable competition, Subway: One in four franchise owners was unable to make good on their SBA-backed loan. Quiznos recently settled four class-action suits brought by its franchisees, agreeing to pay as much as $100 million to end years of wrangling over its pricing, royalties and fees.
The typical startup fee for a new Quiznos franchise is $25,000, but in an effort to add stores to its 5,000-member army, Quiznos announced last week that it would slash that upfront cost to $5,000 for entrepreneurs who already have restaurant management experience.
Source: Loan data is from the Small Business Administration, covering loans made from October 2000 through September 2009. The failure rate represents the number of loans in liquidation or charged off, divided by the number of loans disbursed.
LAST UPDATE: Apr 26 2010 | 4:53 PM ET
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