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An International Franchise Association franchise fact sheet from 1992 shows the incredible state of misinformation back before the Internet came of age. Here are some of the sales points from the flyer (pdf) that push bogus benefits of buying a franchise— any franchise— to outplaced corporate workers.
More than 100,000 new jobs created by franchises last year. In comparison, Fortune 500 Companies lost 3.9 million jobs during the last ten years.
According to studies conducted by the U.S. Commerce Department from 1971 to 1987, less than 5% of franchises have failed or discontinued on an annual basis.
94% of FRANCHISE BUSINESS OWNERS ARE SUCCESSFUL, according to a recent Gallup poll.
Average gross income before taxes $124,290.
The first point not only shows bad form by comparing numbers from different time frames of one year and tens years, which is comparing apples to oranges, but it also is unclear on the source of the information. Regarding point three, years ago the IFA asked its members not to use this misleading and incorrect information. The flyer also makes claims of $124,290 in gross income for owning an average franchise. Those claims have since been dropped. In contrast, 20-year franchise veteran and industry publisher Robert Bond declares that the average franchise owner would probably make $40,000 today if they combined their salary and net income from the business.
What a difference nearly twenty years of hindsight and the information age makes to spot how bad these numbers are.
To its credit, the IFA has moved away from such claims.
The problem to the industry with bad numbers and crude sales attempts like that above is that good franchisors get lumped into a morass of bad information. Junk information gets in the way of a buyer being able to recognize good concepts. Transparency and good practices in a franchise concept can work against it because its numbers aren't as high as those claimed above.
Does anyone see other inaccuracies?