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Free Franchise! The Gift That Just Keeps Taking

Free Franchise
Australia's Jumping J-Jays gives away franchises

No royalty payments. No contract. That would be free but this article from Jane Lindhe at Business Review Weekly isn't about ‘free'.

We've seen these gifts and variations before. The most recent in Australia being Midas' ‘gift' offer to naive prospects where they were given closed or failing franchises for the cost of equipment, $35k - $50k; but only to those who had attractive assets and the ability to acquire ongoing finance hell.  

Midas were even prepared to self-finance that small investment when a prospect was walking.  Of course they would; the prospect had much more to contribute - at least a home that could be leveraged.  This was way back before Midas went into administration.

Jumping J-Jays is a concept that has struggled to take off leaving franchisees with little income and a stagnant network.  Now; as with the Midas ‘gift'; franchisees who have invested see the franchisor devaluing the brand to capture another contract term and inescapable royalty revenue. This could be said to be nothing more than a desperate act of franchisor survival.

When franchises in any system lose investment value across a network that is not the time to ‘buy'.

How much due diligence is conducted when the franchise is 'free'; or 'cheap'?

How would you conduct the selection process to find the best candidate for a ‘free' franchise?

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