4. Cold Stone Creamery
Number of SBA loans : 774
Total dispersed: $180.9 million
Average loan size: $233,687
Failure rate: 31%
Cold Stone Creamery's "super-premium" ice cream brand got its start in Tempe, Ariz., more than two decades ago. Known for its made-to-order treats with toppings folded into the ice cream on a frozen granite slab, Cold Stone Creamery currently has more than 1,400 locations. Kahala Corp., the parent company of Blimpie and other fast-food franchises, acquired Cold Stone in 2007.
The product is sweet, but the financials can be bitter. In the last 10 years almost one in three SBA-backed franchisees defaulted on their loan. It's an expensive shop to start, too: the initial franchise fee is $42,000. A 2008 Wall Street Journal article spotlighted the company's franchise troubles, including high operating costs and overambitious expansion.
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
More Galleries
Bricks that grow from microorganisms, household garbage turned into art, three-wheeled bike-cars -- these startups are redefining urban living. More
These five entrepreneurs took their blue collar experience and used it to launch innovative businesses. More
Whether curating the perfect gift or finding a pet-sitter, these startups offer time-saving services that might just seem like holiday magic. More
Sponsors
