Franchise for Sale - Don't fall for this line
Have you ever been tempted by the following lines?
1. Franchise for sale
2. Own your own busines
3. Be your own Boss
4. Work your own Hours
5. Have financial freedom
QUOTE: Think buying a franchise means you get the benefits of owning a business without the risk of business failure? Think again. Without proper due diligence, franchisees can find themselves stuck in bad business models, chained to unfavorable contracts, or victims of fraud.
Before you invest your money, you owe it to yourself to get all the facts, don't give them a single cent until you read the shocking truth about how they use your hard work to make themselves money. I am providing this information free, as the law does not protect the franchisee from franchise fraud. The agreements are written to highly favour franchisors and most lawyers don't even understand them. More on this later. If you see a franchise for sale consider the following statements...........
QUOTE: "With few exceptions ... franchise agreements are very one- sided and do not respect fundamental interests of franchise owners," said Robert Purvin, chairman of the American Association of Franchisees and Dealers, or AAFD.
QUOTE: "The franchising industry represents that franchising is a safe and secure path to business ownership," says Robert Purvin Jr., "But in today's marketplace, franchising is almost never business ownership, and it is very often not a safe and secure path." He explains that buying a franchise means buying a license to operate someone else's business for the period of the contract.
Franchising is nothing more than glorified pyramid selling. Those at the top benefit whether you succeed or not. Franchisors make more money out of two failed franchisees, than one successful one. That is the reality. One key line you may read or hear when you see a franchise for sale is that - a franchise is more succesful than going into your own business independantly. This is not FACT, this was based on one single flawed study and has been taken out of proportion. This study was funded by franchisors, statistics were colleted from the franchisors (the people who sell franchises), out of the 2,000 surveyed only 20% responded. Very unreliable data.
What the franchisor will not tell you, is that they are not required by law to disclose figures on how many stores have been sold. In fact a franchise is not sold to a 2nd or 3rd owner, it is "transferred", according to the agreement.
A franchise that has been "transferred 4 times" but each owner has gone bankrupt, lost money or sold because of the financial burden has actually failed 4 times, but this is not disclosed anywhere.
Franchisors target middle income earners, they use hooks such as "franchise for sale" "no business experience needed", "work your own hours", "have financial freedom". This gives the average person an opportunity at owning their own business at relatively low start up costs. Franchisors are mostly in the business of selling franchises, not ensuring their success. It doesn't matter if they succeed or fail. They collect their royalties regardless, because of your hard work, your investment and your risk. The risk to them is zero, the financial investment from them is zero.
If one fails and closes down, they can re-sell that same area at a later time for full price, this is called churning. Here is an example. A franchise operates in a town called "Hometown" (made up name). They purchased the franchise for $60,000 and pay approximately $1,000 in royalties each month. After a year they cannot afford to stay open, the franchisor offers no support and they have to close down. A few months later the franchisor advertises "franchise for sale" and re-sells that same area to a new buyer for $60,000 and starts collecting $1,000 a month from them. They have now made $60,000 more than if the first one had succeeded. This is why they would rather a franchisee close down than sell or transfer.
On this site I will reveal some of the main tricks they use to pull you in, how they fleece you out of your time and money.
Use all the buttons on the left to get all the facts, once you have explored this whole site, you can then make an informed decision whether you want to invest your money in a franchise for sale.
Still considering a franchise for sale?
MORE QUOTES: "Above all beware of hard-sell tactics and promises that franchisors refuse to put in writing. "If any promise is made, you should have it in writing, and if you put it in writing and it isn't included in a franchise agreement, you should assume you are dealing with a liar and a scoundrel," says Stewart. He says it's difficult to estimate how many franchises are bad bets because there is no comprehensive tracking of franchise failures.
"A lot of people who go into franchises end up owning a job, not a business," said George Whalin, president of Retail Management Consultants in San Marcos.
The industry only counts as a failure a franchise that closes permanently. A site that drives five owners into personal bankruptcy but is resold to another franchisee or is operated by the franchiser is still counted in that 95 percent success rate, Purvin says.
"What you're really buying is a managerial job," says Erwin Keup, Newport Beach attorney and author of "The Franchise Bible." "You wouldn't apply for or take a job you weren't qualified for or didn't enjoy. But people buy franchises all the time they know nothing about."
Purvin gets even harsher. "You're buying a job without any of the rights of an employee, with no minimum wage, for which you pay for the training, and if you walk away, you can't continue to work in that profession for two years."
You will never look at another franchise for sale sign in the same way again............
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