Franchise SBA Default Rate by Approval Year
SBA 7(a) loan default data, FY2010–FY2019 · Updated 2026
Franchise SBA 7(a) loans approved in FY2013 defaulted least (6.0%) and loans approved in FY2018 defaulted most (11.8%) across the 415 brands tracked here, according to U.S. Small Business Administration data with statuses as of June 30, 2026. Every cohort from FY2010 to FY2019 is matured, so these are settled outcomes, not projections.
Most SBA default figures published online use loans approved since 2020 — loans that have had six years or less to fail — so those rates are floors, not outcomes. Every rate on this site is computed from the matured FY2010–FY2019 cohort: loans that have been paid in full or charged off, so the result is settled. Loans approved since 2020 are shown as counts so early charge-offs are visible without being mistaken for a rate.
How does the franchise SBA default rate vary by approval year?
Loans pooled by the fiscal year they were approved, for the tracked brands and, alongside, for every franchised SBA 7(a) borrower nationally. A cohort's rate reflects both the economy its loans matured into and the brands whose franchisees borrowed most in that year.
Source: U.S. SBA FOIA dataset, statuses as of June 30, 2026.
| Approval year | Loans | Charged off | Default rate, tracked brands | Default rate, all franchised borrowers |
|---|---|---|---|---|
| FY2010 | 1,440 | 89 | 6.2% | 8.7% |
| FY2011 | 1,629 | 100 | 6.1% | 7.6% |
| FY2012 | 1,634 | 99 | 6.1% | 7.0% |
| FY2013 | 2,118 | 128 | 6.0% | 7.0% |
| FY2014 | 3,226 | 229 | 7.1% | 8.2% |
| FY2015 | 4,031 | 346 | 8.6% | 9.9% |
| FY2016 | 3,825 | 381 | 10.0% | 10.9% |
| FY2017 | 3,330 | 388 | 11.7% | 12.9% |
| FY2018 | 3,057 | 360 | 11.8% | 13.2% |
| FY2019 | 2,370 | 228 | 9.6% | 11.1% |
Source: U.S. SBA 7(a) FOIA loan data. Loans approved FY2010–FY2019, statuses as of June 30, 2026. Download this table (CSV).
Which industries' cohorts defaulted most, year by year?
Industries with at least 5 tracked brands. A cell is shown only where the industry had at least 20 resolved loans approved that year. Industries with fewer than five such years are omitted.
| Industry | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|---|---|---|---|---|---|---|---|---|---|
| All Other Amusement and Recreation Industries | — | — | — | — | 9.5% | 17.1% | 22.9% | 2.0% | 9.6% | 2.0% |
| Beauty Salons | 1.9% | 0.0% | 3.1% | 2.2% | 6.8% | 6.0% | 10.1% | 16.4% | 15.6% | 6.3% |
| Child Day Care Services | 6.7% | 2.2% | 10.9% | 1.3% | 0.0% | 2.6% | 1.0% | 6.5% | 2.2% | 1.2% |
| Fitness and Recreational Sports Centers | 5.1% | 6.2% | 2.2% | 8.5% | 6.8% | 6.6% | 14.3% | 15.2% | 13.6% | 16.5% |
| Full-Service Restaurants | 6.1% | 8.7% | 14.3% | 17.1% | 20.4% | 9.1% | 9.3% | 9.8% | 2.6% | 0.0% |
| Gasoline Stations with Convenience Stores | 0.0% | 0.0% | 4.3% | 1.9% | 0.0% | 1.1% | 2.2% | 1.1% | 4.3% | 2.4% |
| Hardware Stores | 2.3% | 8.3% | 5.3% | 8.8% | 4.5% | 8.5% | 8.9% | 0.0% | 8.2% | 0.0% |
| Home Health Care Services | 8.3% | — | 4.3% | 2.0% | 3.9% | 10.2% | 1.9% | 11.0% | 0.0% | 8.3% |
| Hotels (except Casino Hotels) and Motels | 2.0% | 2.7% | 3.9% | 1.7% | 3.3% | 2.6% | 1.7% | 1.7% | 3.2% | 1.2% |
| Janitorial Services | — | — | — | 0.0% | 7.7% | 15.8% | 14.3% | 16.7% | 25.0% | 22.4% |
| Limited-Service Restaurants | 6.1% | 6.4% | 5.8% | 6.7% | 8.0% | 9.1% | 11.1% | 13.2% | 14.2% | 7.2% |
| Other Personal Care Services | 0.0% | 2.9% | 7.0% | 3.3% | 9.5% | 7.9% | 5.8% | 8.2% | 6.6% | 7.8% |
| Residential Remodelers | 3.3% | 11.8% | 16.1% | 9.4% | 10.5% | 9.1% | 6.8% | 12.5% | 12.7% | 13.6% |
| Snack and Nonalcoholic Beverage Bars | 8.5% | 14.1% | 7.3% | 4.7% | 7.2% | 9.9% | 13.2% | 11.1% | 14.2% | 9.4% |
Source: U.S. SBA 7(a) FOIA loan data. Loans approved FY2010–FY2019, statuses as of June 30, 2026. Download this table (CSV).
How to read this
- Minimum loans. A rate on a handful of loans is noise: at 20 loans one default moves the rate by 5 percentage points. Ranked tables therefore require 50 resolved loans and distribution statistics require 20.
- SBA-borrower skew. SBA 7(a) borrowers are typically less capitalized than all-cash buyers, so these rates can overstate risk for well-funded operators and understate nothing.
- Not unit closures. A charge-off is a lending outcome recorded by a federal agency, not a count of closed stores. Some failed units never had SBA loans; some charged-off borrowers kept operating.
- Cohort seasoning. Every rate uses loans approved FY2010–FY2019 that have since been paid in full or charged off. Loans approved since 2020 are shown as counts only, because most are still outstanding and a rate on them would be a floor.
Full definitions, benchmarks, name normalization, and limitations: methodology. Rate = loans charged off ÷ SBA 7(a) loans approved FY2010–FY2019 and since resolved (paid in full or charged off).
Source
Source: U.S. Small Business Administration, 7(a) loan program charge-off data, FY2010–FY2019. Franchise data is matched on the SBA's franchise code / brand name. "Failure rate" here means the share of approved loans (resolved: paid in full or charged off) that were charged off; it is not a measure of unit closures. Last updated September 30, 2026.
Cite this page
Franchise Failure Rates (2026). Franchise SBA 7(a) default rate by approval year, FY2010–FY2019 cohort. Derived from U.S. SBA FOIA data, loan statuses as of June 30, 2026.
https://franchisefailurerates.com/reports/default-rate-by-approval-year/ · Data & methodology · Download this table (CSV) · Full dataset (CSV)
Frequently asked
Which approval year had the highest franchise SBA default rate?
FY2018: 11.8% of the tracked brands' loans approved that year were charged off (360 of 3,057).
Which approval year had the lowest franchise SBA default rate?
FY2013: 6.0% (128 of 2,118 loans).
Why stop at FY2019?
Loans approved from FY2020 onward have not had time to resolve. Most are still outstanding, so a rate on them would be a floor that can only rise. They are shown elsewhere on the site as counts.
Does a later cohort with a lower rate mean franchising got safer?
Not on its own. Later cohorts have had less time to fail, even within the matured window, and the mix of brands and industries borrowing changes year to year. Compare a brand's own year-by-year chart on its page before drawing a trend.
How this site is funded. Franchise Failure Rates takes no money from franchisors, franchise brokers, or franchise consultants. We do not sell leads, claimed listings, or franchisor reports. Revenue comes from reports and data sold to prospective franchisees, their attorneys, and lenders.