Trying to Dig Up the Dirt on a Franchise?
July 27, 2007
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If you’re considering in investing in a franchise and you have half a brain, the chances are that you’ve Googled potential franchises to ensure that former franchisees have not had bad experiences with them.   I’d be surprised if you found much dirt on your potential franchisor, and here’s why.
Often, franchisees who have had bad experiences, are scared to talk incase they are sued.  Lets face it - if they’ve already lost a whole heap of money on a failed franchise, they hardly want to lose anymore.  Of course some of them do try to talk - usually on forums, but the webmaster will usually delete their post, or edit it. This is often because he’s scared of being sued himself, or he makes money off advertising franchises and doesn’t want to encourage bad press. This forum post is a perfect example of what I mean. The poster had named his former franchisor, but the forum moderator deleted the name.Â
Amazingly the franchise had a policy which prevented franchisees from communicating with one another at all, so this former franchisee can’t get in touch with others who may be in the same position. I was wondering how they got away with this, so I checked them out and found that every single phone call is handled through the franchisor’s head office, so I suppose it must be quite easy to prevent their franchisees from speaking to one another. What I don’t understand is why any legitmate franchise would want to do so, unless they have something to hide.
If you are considering ploughing your life savings into a franchise - ask to speak to existing franchisees first. Any decent franchisor will be happy to give you contact details for some of their franchisees. Of course, they’ll only give you a list of their more successful franchisees, so do yourself a favour, and ask for the full list.
Also, you might want to check out a post from last year:Â Â Â Ten Reasons Not to Buy a Franchise
If you’ve had bad experiences with a franchise, please share it in the comments section below. Also, if you’re a franchisor who prevents your franchisees from speaking to each other, I’d love to know your reasons.
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4 Responses to “Trying to Dig Up the Dirt on a Franchise?”
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I would rather blow all my money on gambling than waste my money buying a franchise, they tell you the biggest load of bull—t just to get you to part with your money, and when they get your money they have you right were they want you, please please anyone out there dont buy into franchising its a CON.
There’s far too many rosy reviews on franchising on the internet, because a lot of websites are making a heap of money through advertising. I hope to change that on this blog, and also show the disadvantages to sinking your cash into a franchise.
Another excellent post.
I had a horror story with franchising. I consider myself reasonably sensible. I have an MBA, and many years in sales and consulting under my belt.
I got taken in by a franchise. I did a huge amount of due dilligence but still got caught.
After a year it was obvious it was not going to work and I tried to leave. I was told that the only way I could leave was to pay up the next 4 years worth of management service fees and marketing information.
To get out i had to sign a non disclosure agreement to never talk about it or risk legal proceedings. A solicitor said that it was unlikely I could ever prove miss selling.
I am launching a book that will stop others making the same mistakes i did. It is not anti franchise as i genuinely think there are some good ones.
It will be a book about making sure you do your due dilligence on yourself and the franchise so you can enter into your deliberations 100% in posession of the facts.
I won’t be naming the franchise i was involved with. The way i look at it if people follow the process in the book than they won’t get caught by any franchise therefore im not singling out any single 1. Oh yes the legal aspects may have contributed!!
Many people are worried about the legal aspects of naming and shaming franchisors, which is a shame. But, they want you to worry, so that they can sucker more people into buying from them.