Covington-Based PJ's Owners Pour Doubt Over Report on Finances

The owners of the PJ's Coffee chain are in damage-control mode after a questionable report on the financial health of their franchises gained traction through an erroneous online story.

An item on Investopedia.com, an offshoot of the Forbes Digital family of Web sites, reported Oct. 30 that PJ's was ranked No. 2 in the nation in terms of franchise failures. Reporter Katie Adams claimed that more than half of its locations had failed based on an analysis of Small Business Association loans from the Coleman Report, a LaCanada, Calif., publishing company that brands itself "The SBA Lender's Industry Information Source."

The Coleman Report identifies five closed PJ's franchises as holding SBA loans that have not been paid in full or charged off as a total loss. Based on the total of 10 SBA loans held by PJ's franchisees, Coleman gives the chain a 50 percent "failure rate" although the report doesn't clearly identify whether the failures involve the defaulted loans or the store closures.