July 14, 2012
The Fox’s Pizza Den franchise has an alarmingly high SBA loan default rate of 41%.
Are you familiar with the Fox’s Pizza Den franchise opportunity? Please share a comment below.
According to the Small Business Administration, Fox’s Pizza franchisees received 120 SBA-guaranteed loans; nearly half of those loans have been defaulted on by Fox’s Pizza Den franchise owners.
According to Entrepreneur magazine, Fox’s Pizza Den had 313 US franchises in 2008. By 2011, that number had dropped to 282. That’s a decline of 31 franchises, 10% of the entire chain.
The Fox’s Pizza Den Franchise has a failure rate of 41% for SBA-backed franchise loans
Yet despite the obvious failures in the Fox’s Pizza franchise program, the Fox’s Pizza Den website not only cheerfully promotes the Fox’s Pizza franchise opportunity, it boasts that it reduces the risk of business ownership:
Quality franchising reduces the risks associated with starting your own business. Choosing to become a franchise gives you a distinct advantage in the marketplace because the franchiser who has a time-tested quality track record has already made the mistakes for you. That experience prevents you from making the same mistakes and enable you to receive the training and marketing assistance that is needed to ensure your success down the road. [Source: Fox’s Pizza Den website. Emphasis added.]
What the Fox’s Pizza Den franchise marketing page doesn’t disclose is that it’s likely that Fox’s Pizza franchise owners who received SBA loans may have collateralized their franchise loan with their houses or other personal assets, and nearly half were unable to repay those franchise loans… despite serious incentive to do so.
Are you familiar with the Fox’s Pizza Den franchise opportunity?
What do you think accounts for the SBA loan failure rate of Fox’s Pizza Den franchise owners?
What steps should Fox’s Pizza Den be taking to stop further franchise failures?
Has Fox’s Pizza taken serious action to address the problems that led to the 41% loan failures?
Please share a comment, opinion or insight below.
ARE YOU A FOX’S PIZZA DEN FRANCHISE OWNER OR FORMER FOX’S PIZZA DEN FRANCHISEE? ARE YOU FAMILIAR WITH THE FOX’S PIZZA FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
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