Franchise brands whose average SBA 7(a) loan was under $150k defaulted at a pooled 20.1% (median brand 12.5%), while brands averaging $1m and over defaulted at 2.9% (median 2.3%), across 329 brands with 20+ loans approved FY2010–FY2019, according to U.S. Small Business Administration data. The largest average loan belongs to Candlewood Suites at $3,808,504.
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 SBA default rate change with loan size?
The public SBA file gives each brand's average loan, not each loan's outcome by size, so brands are grouped by their average 2010s loan. This is a brand-level pattern: a bucket's rate is driven by which brands land in it.
Brands with 20+ resolved loans grouped by average SBA 7(a) loan size, FY2010–FY2019.
Average loan size of brand
Brands
Loans
Median brand rate
Pooled rate
Median of brand averages
Under $150k
39
1,381
12.5%
20.1%
$130,075
$150k–$350k
146
11,372
13.0%
11.4%
$230,472
$350k–$1M
85
7,305
5.5%
6.0%
$485,383
$1M and over
59
5,161
2.3%
2.9%
$1,632,745
Source: U.S. SBA 7(a) FOIA loan data. Loans approved FY2010–FY2019, statuses as of June 30, 2026. Download this table (CSV).
Which 25 franchises carry the largest average SBA loans?
Largest average SBA 7(a) loan per brand, 20+ loans, FY2010–FY2019.
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 average loan size, FY2010–FY2019 cohort: 329 brands. Derived from U.S. SBA FOIA data, loan statuses as of June 30, 2026.
Author: Franchise Failure Rates · First published August 17, 2026 · Updated September 30, 2026 · Citation format
Frequently asked
Do bigger SBA loans default more often?
In this data the relationship is brand-level: brands averaging $1m and over defaulted at a pooled 2.9% against 20.1% for brands averaging under $150k. Because loan size tracks the kind of business (a hotel versus a home-services van), the buckets partly describe industries, not just borrowing.
What is the average SBA loan for a franchise?
Across the 329 brands with 20+ loans, the median brand's average 2010s SBA 7(a) loan was $307,751. Candlewood Suites averaged the most at $3,808,504; Matco Tools the least at $60,474.
Why are brands bucketed instead of loans?
The published brand table carries one average per brand. Bucketing individual loans would require loan-level outcomes by size, which this site does not publish, so the page says what it can support.
Which loan-size band has the most franchise brands?
$150k–$350k, with 146 brands.
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.