The Petland pet store franchise has an alarmingly high SBA loan default rate of 56%. Petland is listed by the SBA among the worst franchises by SBA loan default.
Are you familiar with the Petland franchise opportunity? Please share a comment below.
Petland franchisees have received 117 SBA-guaranteed loans since 2001; more than half of those loans have been defaulted on by Petland franchise owners.
Petland U.S. franchise locations declined by 34% since 2008, from 125 to 82 units
According to Entrepreneur magazine, the Petland franchise chain has shrunk from 125 U.S. locations in 2008 to 82 in 2011.
Some of that may have stemmed from negative pressure and lawsuits regarding Petland’s inhumane treatment of animals, and allegedly sourcing puppies from puppy mills.
Petland accused of unethical franchise practices against franchisees
According to the Animal Law Coalition website:
…Dr. Veronica R. Jones and Robert C. Hyde who have brought a lawsuit, a class action on behalf of all similarly situated franchise owners, against Petland. Also named are Hunte Kennel Systems & Animal Care, Inc.; and Hunte Delivery Systems, Inc., subsidiaries of Hunte Corporation, the notorious puppy mill operator and distributor, that supplies the puppies sold by Petland. Other defendants are Petland vendors that provide, for example, merchandise, computers or software and other equipment to all Petland stores.
Jones and Hyde operated a Petland franchise in Murfreesboro, Tennesseee.
According to the Complaint, Jones and Hyde "and members of the class were fraudulently induced to purchase failing Petland franchises for hundreds of thousands of dollars per franchise when Petland knew, or should have known, that the franchises could not succeed. …[O]nce a franchise has failed and Petland has charged the franchisee an exorbitant termination fee, Petland looks to "flip" the store by inducing new unwary franchisees into purchasing the franchise that is similarly doomed to fail. This "sign up and shut down" modus operandi is a concerted scheme to defraud franchisees while reaping excessive, punitive and penalizing profits through the extortion of unlawful liquidated damages against unwitting – and soon financially broke – franchisees."
The Petland Franchise has a failure rate of 56% for SBA-backed franchise loans
It’s likely that Petland franchise owners who received SBA loans may have collateralized their franchise loan with their houses or other personal assets, and more than half were unable to repay those franchise loans… despite serious incentive to do so.
Are you familiar with the Petland franchise opportunity?
What do you think accounts for the SBA loan failure rate of Petland franchise owners?
What steps should Petland be taking to stop further franchise failures?
Has Petland taken serious action to address the problems that led to the 56% loan failures?
Please share a comment, opinion or insight below.
ARE YOU A PETLAND FRANCHISE OWNER OR FORMER PETLAND FRANCHISEE? ARE YOU FAMILIAR WITH PETLAND FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
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