Check franchise SBA default rates with AI
SBA loan default rates are the closest thing to a real-world report card on a franchise, because they come from actual loans owners either repaid or didn't. FranDB has matched real SBA records to franchise brands so you can ask an AI assistant for a brand's default rate and its sample size in one question.
Why default rates beat marketing
Item 19 earnings come from the franchisor. Marketing comes from the franchisor. SBA default data comes from loans that real owners either paid back or charged off. A franchisor can decline to disclose Item 19. It can't make its franchisees' loan defaults disappear.
The catch is that the raw SBA files don't cleanly say which brand each loan was for. Matching loans to specific franchises takes work, which is why a reliable per-brand default rate is hard to find anywhere else.
How to read what you get back
A number on its own means nothing without the baseline. The overall SBA 7(a) default rate runs around 6%. Brands meaningfully below that look strong, brands above 15% are a clear warning, and a handful sit above 20%.
Always check the sample size in the same breath. A 0% default rate across four loans tells you nothing. A 4% rate across four hundred tells you a lot. The AI can return both the rate and the loan count at once, so you're never reading a percentage in a vacuum.
What you can ask
Connect FranDB to ChatGPT, Claude, or Cursor, then ask in plain English:
- What's the SBA default rate for this brand, and how many loans is that based on?
- Show me franchises under $150K with a default rate below 5%.
- Rank these five brands by SBA charge-off rate.
- Which of these has the most SBA loans on record, and how have they performed?
Connect FranDB to your AI tools
FranDB plugs into ChatGPT, Claude, and Cursor over MCP, so the data on this page is one question away inside the tools you already use. No code required.
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Frequently asked questions
Where does the SBA default data come from?
From real Small Business Administration 7(a) and 504 loan records. FranDB matches those loan-level records to specific franchise brands, which is what makes a per-brand default rate possible to query.
What counts as a high default rate for a franchise?
Use the overall SBA 7(a) rate of about 6% as the baseline. Below roughly 5% is strong, above 15% is a clear warning, and a small number of brands run above 20%. Always weigh the rate against the number of loans behind it.
Does a high default rate mean the franchise is bad?
It's a strong negative signal but not proof on its own. Read it alongside Item 19 earnings and Item 20 closures. When all three look weak together, the brand is genuinely risky.