Report and protect yourself from Franchise Scams

Franchising is a term very similar to licensing. It is certainly different from the term licensing. The term somekeyword means an authority is given to the other person or organization to sell their products in exchange of a payment. Scamming is always associated with the franchise business. Franchising is a lucrative business opportunity to expand and grow the business. Unfortunately those who use fraudulent activities still remain in the franchise business. In this article I will discuss about how to identify and report franchise scams. After decades of rules and regulations, the dangers of getting trapped in the franchise business are not less. There are several standards set such as you can easily contact Better Business Bureau or the Consumer Affairs Branch of your state attorneys general office. Request the copy of the Universal Franchise Offering Circular. The Federal Trade Commission mandates that every franchisor must have the Universal Franchise Offering Circular to the potential franchisees. Hire a knowledgeable and experienced franchise attorney. It will become easy for you to sue the fraud franchisor with the help of a franchise attorney. Instruct your attorney to verify the Universal Franchise Offering Circular carefully and identify the threats. Also keep a copy of the Universal Franchise Offering Circular in order to give it as a proof in future. Report the fraudulent franchises immediately to the Better Business Bureau. This will help other franchisees to sue the fraud franchisors and will give them several hints to be save from franchise scams. The potential would be franchisees should research properly in advance. You can also check the Franchise Disclosure Agreement. A franchise is only as good as its brand name which eventually tells us about the performance and the reputation of the business. Another sign of good franchise is broad recruitment process which at some point replaces the selling process to gain the entry of good prospects to enter in the firm. When you are looking for investment in a good franchise, then one of the good indicators is to look after number of years the firm has been running. Don't invest in a franchise which has inexperienced management team members. Each member should have the basic understanding of how to operate and manage the firm. The financial condition is very important for this you will get a glimpse in the Franchise Disclosure Agreement and you can check the financial statements of last five years. Litigation is the main thing to judge a franchise. If a company is having a lawsuit against other franchisees about mishandling the brand, not using an effective quality or some other issue. Then it is fine but if a firm has a lawsuit going against it. Then it is wise not to invest in such franchisees. If it is awarded by recognized authorities based upon its financial viability, training and support system maturity. It is undoubtedly a good indicator for you to invest in the franchise.

Thus it is much better to research in advance and through a careful selection you can be saved from such scams very smoothly.