Are franchises really more viable? Evidence from loan defaults

• Likelihood of loan defaults is higher for franchisees than for non-franchisees. • Increased risk of franchisees is consistent through most sectors and time horizons. • Franchising is not a less risky form of business organization for entrepreneurs. This study examines whether franchisees are less likely to default on loans compared to counterpart independent SMEs. Findings from analyses of SME loan defaults between 2001 and 2015 suggest that...