WARNING SIGNS IN THE PUBLIC RECORD · UPDATED NOVEMBER 3, 2026 · 369 RATED SYSTEMS
Worst franchises to buy in 2026? What the filings and loan records show
We don't publish a list of “worst” franchises — nobody can tell you which business will fail. What we can show is which franchise brands have the most warning signs in public records: their own Franchise Disclosure Documents and the federal SBA loan record. Every sign is stated on its row with a link to where you can check it.
Of the 369 franchise systems we rate on a current FDD, 86 (23%) are rated Weaker and show at least 2 independent warning signs in their own filings or the federal SBA loan record; the most common are exits above comparable systems or mostly closures (83 brands) and a shrinking unit count (77 brands). Data as of November 3, 2026.
86
brands with 2+ signs
15
with 3+ signs
11
with SBA losses above expected
6
with going-concern language
These are our reading of filed and public records, not predictions that any business will fail.
Ratings, verdicts, scores and rankings on this site are opinions produced by a published method from public filings and loan records, much of it machine-extracted. They are not statements of fact about any company's financial condition, solvency or prospects, not a recommendation to buy, avoid or invest in any franchise, and not investment, legal or tax advice. How the method works.
Franchises with the most warning signs in public records
Most signs first. The top 25 are shown; the full table is on the warning list. Each sign links to the filing or the table it comes from.
| Brand | Warning signs in the record · where to check | Filing | Wrong? |
|---|---|---|---|
| I LOVE KICKBOXING Fitness · Weaker |
| 2024 FDD · 1+ year old | Report a correction |
| 9ROUND Fitness · Weaker |
| 2026 FDD | Report a correction |
| College Hunks Hauling Junk Home Services · Weaker |
| 2026 FDD | Report a correction |
| Pop-A-Lock Home Services · Weaker |
| 2026 FDD | Report a correction |
| LINE-X Automotive · Weaker |
| 2026 FDD | Report a correction |
| JOHNNY ROCKETS Food & Dining · Weaker |
| 2025 FDD | Report a correction |
| TITLE BOXING CLUB Fitness · Weaker |
| 2026 FDD | Report a correction |
| The Glass Guru Home Services · Weaker |
| 2026 FDD | Report a correction |
| INTEGRA REALTY RESOURCES Real Estate · Weaker |
| 2026 FDD | Report a correction |
| Long John Silver's Food & Dining · Weaker |
| 2026 FDD | Report a correction |
| Pinot's Palette Recreation & Entertainment · Weaker |
| 2026 FDD | Report a correction |
| Sir Speedy Printing Business Services · Weaker |
| 2026 FDD | Report a correction |
| DING TEA Food & Dining · Weaker |
| 2026 FDD | Report a correction |
| INSTANT IMPRINTS Business Services · Weaker |
| 2026 FDD | Report a correction |
| Heights Wellness Retreat Health & Wellness · Weaker |
| 2026 FDD | Report a correction |
| JDOG JUNK REMOVAL & HAULING Home Services · Weaker |
| 2024 FDD · 1+ year old | Report a correction |
| MONSTER TREE SERVICE Home Services · Weaker |
| 2026 FDD | Report a correction |
| Buddy's Home Furnishings Retail & Products · Weaker |
| 2026 FDD | Report a correction |
| All Dry Cleaning & Restoration · Weaker |
| 2026 FDD | Report a correction |
| TGI FRIDAYS Food & Dining · Weaker |
| 2026 FDD | Report a correction |
| BOXDROP Retail & Products · Weaker |
| 2026 FDD | Report a correction |
| Cartridge World Retail & Products · Weaker |
| 2024 FDD · 1+ year old | Report a correction |
| BAMBU Food & Dining · Weaker |
| 2026 FDD | Report a correction |
| Realty Executives Real Estate · Weaker |
| 2026 FDD | Report a correction |
| Steak N Shake Food & Dining · Weaker |
| 2024 FDD · 1+ year old | Report a correction |
Outcome lists: exits, closures, loan losses, franchisor finances
The warning list combines signs. These lists rank brands on a single measure each, with its own inclusion rules. For the closure picture across all systems, see franchise closures in 2026; for why published failure rates disagree, see the franchise failure rate.
Highest outlet exit rate
Exits as a share of franchised outlets at the start of the year (Item 20, systems with 50+ units). An exit is not necessarily a failure.
391 QUALIFY · FULL LIST →
Most outlets exited
Terminations, non-renewals and outlets that ceased operating in the latest year. Large systems lead because they are large — compare the rate.
365 QUALIFY · FULL LIST →
Highest SBA charge-off rate vs same-year loans
Franchisee loans that were charged off, compared with franchise loans approved in the same years, so recession vintages don't decide the order.
113 QUALIFY · FULL LIST →
Franchisor financial health
Whose own auditor raised going-concern doubt (Item 21), and which franchisors lean on selling new franchises for revenue.
FULL LIST →
How to check any franchise yourself
Every brand we cover has a page with these sections already pulled from its filing — find a brand, then use its FDD, Cost & fees, Item 20 and Litigation tabs. Unfamiliar terms are in the glossary.
- 01
Item 3 · Litigation
Lawsuits by franchisees against the franchisor, and regulatory actions, are the ones that matter — collection suits by the franchisor are routine. See Item 3 and each brand's Litigation tab.
- 02
Item 19 · Earnings claims
Check how many units each average covers and which ones the filing leaves out. Not publishing an Item 19 is legal and common. See Item 19 and the subset-claims list.
- 03
- 04
Item 21 · Franchisor financials
Read the auditor's opinion first. A going-concern paragraph means the auditor doubted the franchisor could keep operating for another year. See franchisor financial health.
- 05
SBA loan record
How the brand's franchisees' SBA-backed loans ended, compared with loans approved in the same years. See SBA 7(a), charge-off, and the loan section on each brand page.
- 06
Talk to former franchisees
Item 20 lists franchisees who left the system in the last year, with contact details. Call several, not just the ones the franchisor suggests. See validation.
A brand is listed only when (1) our verdict for it is “Weaker disclosed record” or “Adverse public-record signals”; (2) its latest FDD is no more than two years old; and (3) it shows at least 2 independent warning signs, counted by kind so one table can't count twice: going-concern language in the independent auditor's report (Item 21); SBA loan charge-offs clearly above franchise loans approved in the same years, on the whole record and on loans from the last 15 years; an exit rate above comparable systems or exits that are mostly terminations and closures (Item 20); a shrinking unit count; far fewer openings than the prior FDD projected; or verified bankruptcy/closure records.
Not publishing an Item 19 earnings claim is not a warning sign and never puts a brand on this list. Reviews, news and complaints are not counted. Figures are machine-extracted from public filings and can contain errors. The full rules are on the warning list and in the methodology.
What are the worst franchises to buy in 2026?
No public source can say which franchise will fail, and "worst" depends on the buyer. What the record can show is which brands carry the most warning signs. Of the 369 franchise systems we rate on a current FDD, 86 (23%) are rated Weaker and show at least 2 independent warning signs in their own filings or the federal SBA loan record; the most common are exits above comparable systems or mostly closures (83 brands) and a shrinking unit count (77 brands). Data as of November 3, 2026. Each brand and its signs are listed on this page with links to the filing.
What franchise has the highest failure rate?
No agency publishes a failure rate by brand. Two public measures come closest, and they answer different questions: the share of franchised outlets that exited in a year (FDD Item 20 — which includes transfers out of the system, relocations and planned closures, not only failures) and the share of SBA-backed franchisee loans that were charged off, compared with franchise loans approved in the same years. We publish both as separate ranked lists rather than blending them into one number.
How do I know if a franchise is bad?
Read the current FDD and check five things: Item 3 (litigation, especially suits by franchisees), Item 20 (whether outlets are closing faster than they open, and the list of former franchisees), Item 21 (whether the franchisor's own auditor raised going-concern doubt), Item 19 (whether any earnings figures cover the whole system or a subset), and the SBA loan record for the brand. Then call former franchisees from the Item 20 list. One weak sign is common; several independent signs at once deserve a hard look.
Is a franchise on this list a bad investment?
Not necessarily. The list is our opinion, based on filed and public records, and it is not a prediction that any business will fail. A brand can be restructuring, pruning weak units, or changing ownership. Individual locations differ widely. Use the signs as questions to put to the franchisor and to former franchisees.
Why isn't a brand I've heard bad things about on the list?
A brand appears only when we rate it on a current FDD (no more than two years old), the rating is Weaker, and it shows at least 2 independent warning signs in the record. Reviews, news stories and forum complaints are not counted. Brands that are too new, have too little data, or have only an old filing are not rated at all.
Where does this data come from?
Franchise Disclosure Documents registered with state regulators, the SBA 7(a) and 504 loan record from FY1991 to date released under FOIA, and court records a person has matched to the franchisor's own entity. Figures are machine-extracted and can contain errors; each row links its source. Data as of November 3, 2026.
If you represent a listed brand and a figure is wrong, use the correction link on its row or tell us; we check every request against the filing.