Business-minded individuals looking for a franchise opportunity to invest in have a plethora of choices to select from as the industry continues to expand. However, not all franchises are created equal - some may provide franchisees with a high return on investment, while others may be more prone to failure.

To help prospective franchisees get a handle on which businesses have a greater chance of success and which possess a higher failure rate, the U.S. Small Business Administration produces a table that shows the loan failure rates for select franchises.

The table includes franchises such as Blimpie, Blockbuster Video and Johnny Rockets at the top with 30 percent and higher failure rates, while systems including Subway, Great Clips and Pizza Hut remain near the bottom of the list with 8 percent or lower failure rates.

In total, the SBA found that the median failure rate on franchise loans was 12.81 percent, with the mean clocking in at 18.09 percent.

However, when considering this data, there are a few things prospective franchisees should keep in mind. First, this loan data is only based on credit obtained from the SBA. Clearly, not all franchisees receive their funding from this agency. Community banks, major lenders and family and friends are all common sources of money for franchises.

Second, this information, Inc. magazine points out, represents only loans approved between 2000 and 2009. As such, it does not reflect trends in 2010, as credit began to loosen up following the economic recession that was triggered in December 2007.

Finally, the source reminds prospective franchisees to remember that the failure rate is equal to the number of loans in liquidation plus the number charged off and all divided by the total number awarded.

"I don't think it's a perfect list since many people that use the SBA generally invest a lower equity amount which makes the investment inherently more risky, but it still is a great indicator for how franchises fare as investments. If you put a lower than average equity amount into your investment and can still manage to make a profit, I'd see that as a very positive sign," a former Subway franchisee told Inc. magazine.

The SBA also publishes these tables for each individual year as well. It most recently released its 2009 table of high-risk franchises.

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