International Law

Selling Franchises to the Recently Laid Off

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Several weeks ago, I was interviewed at the prestigious franchise news site, Blue Mau Mau about fraud.

One of my concerns in this economic environment was with how the newly laid off would react, what they would do, and how they would make decisions. 

With nearly 60,000 reported layoffs in the United States alone, it is of pressing concern that these individuals understand the how to avoid failing for the franchise fraud. 

This is what I said.

"There are times in our lives when for whatever reason we want our aspirations to be achieved immediately.

For many, the most compelling overriding value is the need to be in complete control of their economic lives. Simply put, they never want to be fired again.

Those people are sitting ducks.

The con criminals know this and wave phrases like "be your own boss" and "in business for yourself but not by yourself." Prospects pick up on such words of puffery.

Buyers blow it up into full-scale fantasies of business ownership. And then to compound the problem, they perform bad due diligence by sloppily selecting evidence that only confirms they are making a good decision.

They know that they need this investment."

Les Stewart pointed out, shortly after my interview, that in Britain the hard sell is beginning.

"Talk about stealing a guy's life savings when he's down. And when I thought I had heard it all and that franchise hustlers would do anything for a sale.

Now word out of Liverpool that their franchisor-only trade association, British Franchise Association, BFA is hard-selling directly to recently laid off UK workers, via their former employers."

Now is not the time to skimp on pre-purchase franchise due diligence.

Full post as published by Misleading Advertising Law on January 27, 2009 (boomark / email).