Do you love baked goods? Or are you into tools because you love spending your Sundays working in the backyard with varying tools?
The reality is that either could end up being a future business for you if you choose to go through a franchising company.
We’ve running this series on franchise failure rates, with this section specifically looking at Cinnabon, Cornwell Quality Tools, and Liberty Tax Service. For instance, here’s part 3.
Some of these franchise companies resemble each other considerably when it comes to what they’re offering – at least when you’re looking at them on a surface level.
It’s one of the reasons why it’s so hard to figure out if one is better than another. However, franchise failure rates are a powerful tool to take a look at in your evaluation of pursuing one as a business opportunity.
Cinnabon
There’s no denying that Americans love a sweet treat, and Cinnabon is there to offer to settle that craving.
Digging into everything I was able to find about the company, Cinnabon’s 3-year franchise failure rate is about 15%, which isn’t bad. However, it also isn’t great.
The food franchise industry is at about 11%, so it’s essentially within spitting distance of the average. There are some things I really like about this model, and some that I really don’t.
For you to evaluate if Cinnabon should be a big part of your future, it’s important to try and figure out where you stand on these issues. So, here’s a thing I do like about the business, which is that there haven’t been any major scandals I was able to find.
Whenever franchisees get upset about the way they’re treated, it usually ends in lawsuits. For instance, just take a look at McDonald’s in part 1. Cinnabon, unlike some other franchising companies, offers a product that has proven to stand the test of time.
With that said, I really don’t love that how so many of their locations are within malls or airports. I always question a business that relies on mall traffic as it seems like it’s a dying trend. I personally don’t go to the mall nearly as much as I did 10 years ago.
Airports, on the other hand, have very high overhead costs, which is another thing that makes me cautious recommending them.
The typical profit margin in the baked goods franchise space is about 15%, which means the owner’s profit for a Cinnabon is an estimated $50,000 to $75,000 per year.
Before committing to getting a Cinnabon franchise, I would definitely do some serious market feasibility where you’re considering putting it.
| 🍥 Key Item | 📋 Cinnabon Franchise Insight |
|---|---|
| Initial franchise fee | $30,000 for traditional units; $8,000–$25,000 for non-traditional formats (kiosks, travel centers) |
| Total investment | $233,700 – $546,800 for traditional inline units; includes build-out, equipment, training, and opening costs (2024 FDD) |
| Ongoing fees | 6% royalty + 1.5% national brand fund; optional local co-op marketing contribution varies by region |
| Store formats |
• Traditional inline: 600–1,200 sq ft • Kiosks: 250–400 sq ft |
| Operational considerations |
• High sugar-aroma draw means strong impulse-buy potential—opt for high-traffic corridors (malls, airports) |
| Creative rollout idea | Partner with a local college bookstore for “Finals Fuel-Up” week—offer free Minibons to students with a student ID 📚 and a social post tagging your new store’s location |
| Hidden gotcha (consultant-level) | Cinnabon requires franchisees to source core ingredients (Makara cinnamon, dough base, icing) through approved vendors only |
| 🚀 Enquire | Talk to Thomas about Cinnabon ➜ |
Cornwell Quality Tools
Cornwell Quality Tools is another oe of those businesses that just seemed better in the ‘90s or early 2000s. However, today, the concept feels antiquated, and there’s a lot of criticism on the model.
To go over it briefly, Cornwell Tools is much like Maatco Tools, Mac Tools, and Snap-on Tools. They offer a mobile tool business.
The reality is that the concept feels antiquated. When I need tools, I go to Amazon. Then I go to Home Depot. From my research, Cornwell Quality Tools’ franchis failure rate seems to be somewhere between 20-25% in the first year. What’s more worrisome is that most are gone by year 4, while roughly half are gone by the end of year 2.
Those are numbers I couldn’t encourage a potential franchisee to bet on, and why I don’t personally recommend Cornwell Tools. The numbers stem from a class-action lawsuit calling the company a sophisticated scam. Ouch and no thank you.
The class action lawsuit will be the biggest scandal you will find about the company, but it’s also definitely more than enough for me to discourage getting one of their businesses.
Cornwell has been accused of selling franchises they knew wouldn’t succeed, and the numbers seem to support it.
Liberty Tax Service
Liberty Tax Service is another one of those that could seem tempting, but after I looked at the numbers, I just don’t believe in it as a business to recommend.
The SBA 10-year franchise failure rate for Liberty Tax Service is 21%. Is that good or bad? Honestly, it sits up there around Subway and Jimmy John’s, that both come in at roughly 20%.
However, I wouldn’t go as far as saying there’s anything good about those numbers.
What’s more confusing is that the company is now called “Freedom Tax” in certain parts.
On the bright side, there are other businesses that perform considerably worse. The equivalent number for UPS stores is 23%, although I personally think their franchise failure rate will increase given Amazon’s increased dominance.
Although the failure rate may not be the most concerning, I tend to favor businesses that aren’t quite as seasonal as this one. In addition, when you do get to busy season, you’re suddenly competing with H&R Block.
If I had to start a business myself, I would pass on this one. It doesn’t help that the founder has been engulfed in scandals alleging favoritism. It’s a pass for me.
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