International Law

Talk to Current Franchisees First?

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Lance Winslow is a fascinating guy - he was repeatedly sued by the FTC over his non franchise car washing franchise.

He tried to convert it to a mere license arrangement, which also failed.

From time to time, he shows up making good points about the FTC and the Franchise Rule.

But in this particular article, about buying a franchise, Winslow commits the cardinal sin of offering buying advice that will never work.

First, he starts off with the old chestnut about franchisors awarding franchises

"Allowing the franchisor to see if you fit on his team and allowing you to determine if you are willing to join as a franchisee."

Fit on the franchisor's team?  What on earth is Lance talking about?  The franchise team - the one that pays royalties for renting trademarks?  The franchisees that are promised nothing in the contract after a grand opening, except at the discretion of the franchisor?

Things get worse, with more simplistic advice.

"Call up 5 or more franchisees and ask them about their experiences with the franchisor, and how they get along with;

1. The Staff
   
2. The Vendors
   
3. The Other Franchisees

Ask them how they like the business, how much money the franchisee is making.

Ask them if they plan to stay with the company, sell their franchise or renew at the end of the term of the franchise agreement.

Do a little investigation and find out if this is a good fit for you and your future business."

How much money the franchisee is making?  Yeah, any five franchisors is going to tell that a complete stranger.  

If they plan to stay?  Who cares, 90% of the MBE stores chose to renew as a UPS store, which appears to have been complete disaster.

How the like the business?  The like the business if they are making money and what to tell a complete stranger that.

There simply are not 5 minute shorts cuts to the real work of pre-purchase investigation of a franchise.

Get professional help.

Full post as published by Misleading Advertising Law on August 13, 2008 (boomark / email).