Franchise Advice, Rulings & Regulations

“Frannie” Franchise is the Ann Landers of ieFranchiseNews. Whether you are a franchisor with a problem or a franchisee that needs advice, Frannie will attempt to answer all concerns and questions. E-mail Frannie at gibson@iefranchise.com with your thoughts and let her smooth out the “many bumps” you will encounter on your way to franchise success.

Dear Frannie,

I have heard that many franchise offerings are scams intended to entrap unsuspecting entrepreneurs. Granted, there are always rotten apples in every barrel, but how can I know which are the "bad" versus the "good" apples?

Looking for a Good Fruit

Dear Good Fruit,

Well, the time certainly is ripe to go into franchising but, as with any major undertaking, you have to thump a few melons before you take a bite.

First of all do your homework! But, do it in the right place. If you are looking for franchise opportunities on the Internet (which is a vast and abundant orchard of information) steer clear of the online job sites. This would be the equivalent of picking up the soft, worm-eaten "dropsie" apples off the ground. Job sites are for finding jobs ... not franchise opportunities. And don't be fooled by all of the job posts that offer you the chance to "WORK FROM HOME", earn "Big Bucks From YOUR OWN Business" and "B THE BOSS OF U." Headlines like these should be your first clue that these "opportunities" are just too good to be true.

When you're looking for franchise information go as close to the fruit tree as possible. Domino's website will be the best place to find out about current franchise opportunities within that company. If you're just beginning your research, however, and aren't sure what franchise opportunities exist at your investment level (you really need to know how much cash you have and how much you can borrow before you start this process), head directly to a franchise industry portal such as www.ieFranchise.com. A portal can guide you through the "Which franchise do I want to own?" steps by helping you answer some basic, but very essential, questions such as the following.

• How much money do I have and how much can I borrow?
  
• Do I like to work with people? For people? By myself?
  
• Can I manage other people? Do I want to?
  
• What kind of hours do I want to work?
  
• Is working from home something I want to do?
  
• Should I go into franchising with a partner?

Another step would be to talk to the company's other franchisees. Ask them how long it took to get their business going and what kind of support they received from the "home office." Ask about the types of problems they've encountered and how these were resolved. I hate to sound pessimistic but, if the answers you get from these other franchisees sound too good to be true well, you get the picture. If possible meet with other franchisees at their place of business. Don't interview them over the phone. You need to get a sincere sense of what's going on in the day to day workings of their franchise and you can't get that over the telephone wire.

If you'd really like to check out some of the latest scam news there are bushels of Scam Watchdogs to keep you on the straight and narrow. Check out the WorldWide Scam Network http://worldwidescam.com/index.htm where you can scroll to the bottom of the home page to see what's on the "Scam Radar Screen". The Federal Trade Commission has a wealth of information on what to avoid and what to be wary of on its "Thinking of Buying a Business Opportunity". For some scary stories scroll down to "Examples of Business Opportunity Scams". The Fraud Watch squad of the National Consumers League offers a Tip Sheet on how to (hopefully) recognize business opportunity and franchise frauds.

Careful homework will help you enjoy the sweet fruit of your franchising labor.

Good luck.

"Frannie"