For some people, opening up a franchise can be a profitable way to make a living. But there can also be downsides to these particular types of business models. One Atlanta, Georgia franchise is experiencing some of those negative aspects now.
Just 12 years ago, the Atlanta Bread Company was considered to be among the nation’s fastest-growing franchises. It was estimated that it would be able to double the number of its store in time at all. In fact, by 2004 the company had tripled opening 164 outlets all across the United States. Then things started going south. Today, it only has about 74 outlet stores in just 20 states.
The Georgia based company is ranked number 11 (out of 25) in terms of Small Business Administration (SBA) loan failures. This is according to a study by Blue MauMau, an online publication that tracks the franchise industry. Since 2008, some 44 stores have closed with much of the decline being blamed on poor location selection as well as a sluggish economy.
However, the company claims this “retreat” in business is due to strategic planning with the intent on remodeling its remaining stores and revamping its product line. As a matter of fact, here in Atlanta, the bread giant continues to be rolling in the dough but also new employees.
This story illustrates how the ever changing economy can have far-reaching effects on the overall health of any particular franchise. For this reason, those who are contemplating the purchase of a franchise may wish to consult with a knowledgeable attorney who is experienced in this type of business law. Franchise law can be complex to understand and working with an experienced attorney may provide answers to the many questions potential franchisees may have as they move through the process.
Source: The Atlanta Journal-constitution, “Atlanta Bread Company franchisees among worst-performing SBA borrowers,” Russell Grantham, Oct. 24, 2011