Turning on The Light, Pre-Investment Risk Management

Why is it that franchisees who had no clue how to conduct pre investment due diligence insisted on making investments they couldn’t figure out and betting everything they own in the world on that incompetent decision?

So many of them proceeded to lose everything, ending up in bankruptcy and sometimes in suicide. They were taught things that simply are not so, and they persist to this day in believing that nonsense should be reality – that government is there to protect them from impropriety and that they are entitled to rely upon such nonsense.

I think of it as approaching a mountain in an old car that hasn’t been tuned up in many years. The car probably can’t make it up the mountain. Do you bulldoze the mountain, or do you fix the car? If you aren’t an auto mechanic, you have to hire someone who knows how to make the car get up the hill. Or, like franchise investors, you can get out of the car at the bottom of the mountain and offer up a prayer that some unseen power will enable a broken down car to climb a very steep mountain.

Of course that won’t work, no matter how fundamentally you believe in unseen powers or how many books you read about it. If books could make you competent, anyone could buy an auto manual and fix any automobile problem. It’s the same with vetting a potential franchise investment.

Financial analysts, accountants and lawyers all start at the same point – a willingness to take what is presented to them at face value. The problem with franchise investment information is that taking it at face value is usually the road to disaster – certainly for all but the most experienced, deep pocket investors. What is usually presented to induce a franchise investment is unreliable or outright dishonest. How you approach evaluating the risks associated with dishonesty and unreliability is not included in the educational training of lawyers, accountants or financial analysts. All of them are often victims of franchise fraud, because they don’t have a clue how to conduct franchise due diligence.

Over the years I have provided tutorials on franchise investment abuse, gratis, on my website, FranchiseRemedies.com. Many have read them. Those tutorials don’t/can’t make you an expert in franchise investment risk analysis. They are to point out the inordinate risks and teach the lesson that you need an expert to help you decide. The most frequent feedback from those tutorials include accolades for having placed them there for everyone to read, coupled with the lament “If only I had hired you to help me sort this out before I made the dumbest investment of my life and lost everything.”

There really isn’t much more I can do than present what I present in the hope that it will help people understand what they are up against. But, since I am an incurable optimist, I keep offering more insights. Here is the insight tidbit for this week.

People think of picking a franchise by looking for the stated benefits. That keeps your eye on the lie. Franchise investment analysis is a lot like picking a trial jury. In picking a trial jury, you can’t pick people who you think agree with your case position, or people who seem like they are somewhat like your client and from whom you can therefore expect a sympathetic ear. That is jury picking lore. The jury picking rules have changed over the years.

Today you probably get a couple of hours. You get a set of documents that contain the jurors’ answers to the juror questionnaire – questions that lawyers, judges and law professors believe will enlighten you about each juror. What is most important about the juror questionnaires is what they omit. Sure, some of them have affirmatively disclosed information that helps you make up your mind. But you can never just take the disclosed information and pick your jury from that unless you want your head handed to you. You must cross examine the information. You must question the juror. You must ascertain the juror’s animus. What does this juror want at this moment that is not disclosed openly and up front?

So how do you pick a jury? You don’t! You unpick a jury. The rules allow you to try to select a sympathetic panel by eliminating the worst, not by including the best. Out of a panel of perhaps fifty potential jurors, you have maybe three peremptory strikes, unlimited challenges for cause – and challenge for cause is extremely restrictive. After you have struck the three worst, and challenged a few for cause – usually because they can’t hear or don’t comprehend English or state that they have medical conditions that will probably affect their ability to serve, you are left with about 35 or so folks (accounting for both sides going through that exercise). Of those 35, the first 12 (or sometimes 6), going by juror number, will be your jury.

If you think of pre investment franchise due diligence in that manner, you may have a light go off in your head about how really unlikely it is that you will be able to make any investment selection by giving attention to the stated benefits. You have to find the faults. That is an exercise in detective work, not lawyering, not accountancy, and not financial analysis based upon the information presented. You have to find a resource who can cross examine the information, unless, of course, you are yourself an expert in doing that.

Profile picture for user Richard Solomon

Comments

you'll not convince them...

Alas Richard, no.

"They" still think it's okay to know nothing going in, it's a franchise, a "proven concept", just sign on the dotted line and the Franchisor will show you the way. All you need is the Zor's 2-week training. And when things blow up, a lot of hand-wringing about "how many have been hurt". HURT, boo hoo hoo.

Internet scammers wouldn't troll Nigerian money order remittance schemes if nobody answered them. And predatory Zors wouldn't find their activities worthwhile unless there was a sucker born every minute.

Utopia or Reality?

Being relatively new to this forum and having briefly looked at your own site, I applaud what you say you are doing - after the fact. But I don't altogether get you. You are effectively saying the franchisees have themselves to blame because they choose lawyers and accountants who say they understand franchising enough to take you on, and our own selves because we are new and keen and somewhat naive to this whole thing, and because we are constantly told by the likes of FCA, (in Australia I'm talking about here not Texas USA)and implied through the inaction of the ACCC that franchising is safe as houses (it certainly IS that for the franchisors - they take yours) AND also tell us that you can be sure that the contracts presented to us are full of lies and deceit? So who are we supposed to believe? And how the hell does ANYBODY find the truth in that until it's too late, because it's hidden deep in the whole psyche of the whole system. Are we supposed to do due diligence on the lawyers and the accountants first to make sure that they do due diligence on our behalf? You wouldn't be doing business if it weren't for a whole system of business that is steeped in what amounts to fraudulent behaviour. Go ahead tell us disenfranchised franchisees that we are idiots and fools and ignorant in your gruff manner and it will keep the likes of the FCA and their bed buddies in the law and the ACCC and governments believing we are exactly that and we like it so just go away and don't try to make it fairer for us. After all we made a mistake despite our best efforts; we deserve to be bankrupted, lose our homes, forced into suicide.....??

I'm not interested in what you deserve or why. One at a time I

couldn't care less about anyone who gets fleeced by fraudulent practices on the part of crooked franchisors.

My goal is to educate people to appreciate that there are competent resources to reduce the risks that injured you and so many others.

I can't do anything for you. But I can help those who have not yet made these terrible investments.

I tell people constantly that they should vet their due diligence resources by asking them a few pertinent queastions:

Do you regularly perform franchise pre investment due diligence as a major part of your practice?

Do you vet the deal as well as the legalities of the contracts?

If the answer to that is not satisfactory you keep looking.

If you want to find the right folks to put those questions to, you do a Google (or other) search on the words Franchise Lawyer. You ask those questions to the people you find on the first two pages of your search results.

They don't have to be in your own country.

What any single individual believes or doesn't choose to believe does not interest me. I have my mission and that will not be diverted because of anyone's opinions to the contrary. I'm not looking to make friends. I already have friends.

 

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Re: I'm not interested in what you deserve or why. One at a time

Of course you "couldn't care less about anyone who gets fleeced by fraudulent practices on the part of crooked franchisors." You, instead, extoll the virtues of your legal brethren who purposely draft franchise contracts allowing for the complete financial destruction of individuals and families throughout the franchise community.

Richard, no question you are very bright. Also, no question you know franchising. However, you make an erroneous assumption in your argument - namely, that we (franchisees) are just taking the franchisor's word and we are not hiring the professionals required. As the previous gentleman said, we DO hire attorneys, we DO hire accountants. There is no way to know beforehand that there are only a handful of attorneys (and I do mean only a handful) that truly know what is occurring out there in franchiseland. We are not going about it by ourselves. In one breadth you state we should have legal and financial representation. In the next, you state that your "friends" wrote these contracts in such a way that only certain individuals can truly decipher their meaning. Outside of franchising circles (after people get burned) how well known are you?

We buy a car and the government has regulations protecting us from "lemons". Hell, I can't have limbs trimmed from my trees unless I hire a state licensed "arborist". I am defrauded in innumerable ways and the government has laws regarding unfair trade practices. A government agency, the SBA, places many of these frachises on their "fast track" for loan approval. How is anyone supposed to know that the frachisors have our representatives and regulators in their "back pocket" until after the fact. How are we supposed to know ahead of time that a huge percentage of these franchise systems are scams. We tried to do our due diligence. We hired professionals. Yes, we even called franchisees. For you to sit there on your pompous ass and state that it is our fault when we did everything we were told to do, we were more than willing to pay for professional advice but, hey, we didn't call YOU, is a pathetic argument against franchisees.

What's worse is you, after going on this latest rant against franchisees, sat there (yes, on that same ass)and defended a Franchise Administrator who was in a position to do something to straighten this mess out but instead tells us 'you want financial disclosure? GO FISH!!

If you want to help franchisees then lets come up with ways to get the information out there. You just standing up after the fact with your chest out helps nothing except you build your own damn ego (and its quite apparent you've been doing that for a heck of a long time).

If all you want is to get your ticket punched, go see your

chaplain. I'm not in the sympathy business. Get busy supporting the people who are working on helping your situation or just sit on your bloody arse and whine.

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Re: If all you want is to get your ticket punched, go see your

Richard, we do want your help. However, to be told 'Well, you should have done "x" in the beginning' doesn't help any of us. We thought we did do "x". Had we known what was going on do you really think we would have placed our entire life savings into this? Do you think we would have scrimped on legal help? There is a reason why franchisors keep selling these things. People don't know. The banks know how bad this crap is but they are protected by the SBA or collateral. The franchisors know how bad this is but they are protected by the contract.

So, without insults, what needs to be discussed is how can franchisees change the laws to receive better protection? Going after a franchisor "after the fact" is ineffective and too damn costly - not to mention the hurdles such as General Release forms that they force you to sign. Plus, we can't accept that disclosure is to come from other franchisees.

As for backing people who are out there helping us: who are they? Are there government officials who are trying to change things? WE DO want to part of the solution. But it has to be a REAL solution or else it is meaningless. THAT would be an article that would be exceptionally helpful. Don't blame us. Use us (but not the way the franchisors did, my butt hurts enough as it is). For every zor there are at least 50 zees plus additional family.

By the way, what I am doing away from this site is much more than just whine. Whether I will be effective is another question.

Your next post in here should say:

Ray Borrodale - Here is my contact information. What can I do to help see to it that this is changed so that others do not suffer what I have suffered.

If you don't use your pain to help others, then why should anyone care what happens to you?

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Richard read your email

for more information

I have read it, and if you are not in Australia or New Zealand

don't bother Ray Borradale.

Sadly, there is nothing in the USA that helps franchisees who have already been fleeced and are broke. Rarely will you be in a situation to enthuse a competent contingent fee trial lawyer. That's why I am so bloody militant about the importance of really killer pre investment due diligence.

Not getting fleeced is the only real cure here. Once you sign, you are toast. And you are not equipped - neither is your lawyer in almost every instance - to deal with fraud detection.

You can save the fees and go it on your own or with some cheap ass lawyer. What happened to you is what the result usually is. Alternatively, you can decide not to come to me because you don't like my manner - same result - you lose. The difference is experience and insight. If that has no value to you as a potential franchise investor, that's OK weith me. No client of mine has ever been fleeced. We decline a lot of franchise deals that a lot of people in here are willing to give the benefit of the doubt to. I'd rather miss out on a good one now and then than send a client to his financial grave. But I don't usually miss out on the good ones.

I am gruff and rough because this is a gruff and tough business. It only has the  false appearance of being full of nice people. Most of them are just thieves.

Your call. 

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Re: not in Aus/NZ don't bother

Thank you again Richard you are a real sweetheart.

One thing needs to be very clear in the minds of franchisees in trouble with a scumbag franchisor.  The people here will give you advice if you ask nicely and you should take it - but there is no sweetness here because we have all heard it all way too many times.  We all have busy lives but we still contribute.

The main objective of BMM is to do what can be done to assist all parties in franchising to best produce healthy franchising.  And that isn't a small job and franchising isn't going away.  People here are motivated to help the next generations from making the naive mistakes of people like me and all my franchisee/or friends. 

The audience here come here for many reasons and when we consider franchisees we can [over] simplify by suggesting we have past and present.  Of the current franchisees we mostly have those in trouble.  Everyone that comes has the opportunity to learn from experience and knowledge.  For new readers I would recommend they read a hell of a lot about franchising here and what is on offer to best gauge the people here before they shoot off their mouth.

Now; moving on ..... It would seem that you have said you are broke.  It is my experience that some people wake up one day to find out that they are being screwed by a franchisor.  Many contribute to their own demise by making the mistakes they never got a chance or never bothered to read about.  This franchisee has raised a lot of points that have been covered on numerous occasions e.g. due diligence of ‘experts', and I won't get into those again tonight.  But let me say this; if you are in trouble there is a high probability that you won't get out of it but you may be able to minimize the damage. [maybe .... and only if you are a good student and your situations allows for the possibility].

I know your world is crashing and I know what that means but the few cannot create miracles.

I don't know how many people have told me they are broke and what they were really saying is that they don't want to lose anymore so they will forget about the assets they don't want to put on the line because they haven't , as yet, realised that they will lose everything if they do not find a way to fund an experienced, franchising lawyer.  And not just anyone who says he can help but from someone with a track record of achieving the best possible result [with what they have to work with] and not simply bullsihting and draining you of your last dollars.  The good news is that in Australia the choices aren't that difficult ... not that many.

POINT: If you think you can pretend you don't have equity in a home I'm really sorry for you and your family because you are almost certainly going to lose it anyway.  If you want a chance to save some or and maybe even most you better believe me.

If you are truly broke you have a problem because the chances of getting your money back in Australia almost always range between none and less.

I'm not saying there isn't action you may be able to take but it depends enormously on the situation as to whether such action would achieve anything.  There are only a few sets of circumstances where a screwed and broke franchisee can apply pressure.  But it happens and I won't discuss it here.  If you really can't afford a lawyer I will talk to you but don't bullsiht to me - I just don't have the time and I will know.

I wrote this not just for you.  I wrote this so that if some poor bastard is looking at the same crap he might start to appreciate the reality of the situation.  The gentlemen here at BMM do the same thing over and over again almost daily and on whatever is the need or topic.  Because they give a damn about stopping what is happening to way too many.  I have been contacted by 3 franchisees in the last 18 hours and I have a lot to do to feed my family so take it ... or leave it .... I don't want your money and what I give I decide.

I won't pretend to be a lawyer and I won't give you legal advice but I know my siht after 21 years in this business and I can give you practical advice that may make a difference.

My best advice is always to get a bloody good lawyer to determine if you have a shot at the Holy Grail of scam franchising.

Nice work Mr B.

For whatever reason - and I have heard plenty - franchisees in trouble will often convince themselves that they can't afford to get the best legal advice, when in fact they can't afford NOT to.  Invest a little now to save a lot later - even if the little is an uncomfortable amount.

If we are feeling in a blunt mood tonight, add this one - if you don't care about protecting your own interests, no one else will.  

A lawyer can set out your legal options, but if you are not prepared to take the matter to Court when you have the opportunity then at best it is about damage control - who remembers 'peace with honour' I wonder? 

If the franchisor has the deck stacked in its favour - and it almost always does - then not only do you need your legal options laid out, but also the broader issues so that you can choose the best option for your needs based on cost and benefit.

 

Simon is right. You may not be able to get your investment back,

but you can often get out of the franchise if they have bled you dry and you are willing to sign a release - and you haven't already poisoned the well by calling everybody who could let you go bad names.

In Texas they can't take your home, so if you live in Texas, you don't have to worry about that if your taxes are paid. Only the IRS or a mortgage holder can take your home here. In Texas, if you get a job, they can't garnish your wages either. Talk to a lawyer who can tell you what your options are - there is usually no charge for that visit.

Good job, Ray.

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

That is a point Richard

You can have an initial meeting with most lawyers for zip or very little.  But don't waste it - be honest. 

Richard, Simon; How many times do you have to steer a franchisee away from all the crap that in the end wasn't very nice but means nothing in Court? 

Try and understand something of what the real issues are and they are issues that can be argued in law.  You don't have to get it right or know the law to know that the story of your franchising life and a pissant field rep not flushing won't help your case and will probably see you being shown the door by a frustrated lawyer if you cannot particpate effectively to support your case. A Court isn't interested in knowing your wife cries herself to sleep.

There may be some leeway but you are not special and this isn't new.

An experienced franchising lawyer knows what to ask and knows what types of behaviours to expect - from the client and the franchisor.  G'nite

You have to let the client get it off his chest - at least once.

It happens every time. While that process is going on you will once in a while pick up on something useful, so it isn't a total waste.

After that you start getting serious.

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Re: You have to let the client

Richard is right - at least once.

When dealing with any new client its what you don't know that could hurt you down the track - and if people knew exactly how their facts were relevant to the law they wouldn't need the service.

Unless I understand my clients circumstances I will not be able to give them the best advice - the skill is knowing what is relevant and coming up with the best solution for each client.   

But just as many prospective franchisees don't understand the scope of due diligence necessary, most clients don't know how to properly instruct their lawyer.  Better to have all of the information on the table at the outset and let the lawyer sift through it for the relevant parts.

There needs to be franchise laws period.

Not only disclosure regulations which seems to not  help the fate of thousands of victims world wide.

1.  Until the governments of the world see franchise fraud as a Ponzi Scheme the rogue zors will continue to get away with fleecing thousands of zees. I believe Madoff got 150 years. 2. If turning and churning is obvious in any franchise system there needs to be stiffer consequenses for those zors. If these things do not change there will be more victims. There needs to be manatory education for franchise wannabees. After education, most will not do it, the people will see it for what it is.  Not good. Thousands of people going bankrupt does not help the economy. 3. People should have a choice between arbitration or litigation. 4. Arbitration needs to be public knowledge. Zee's should have a right to seek justice and not only the very wealthy.The system is set up for only the wealthy. 5.  Stiffer penalities for misrepresentation. Zee's need to get everything in writing. If they disclose it verbally it needs to be in writing.  Franchising is selling a system and it needs to be deemed as a consumer purchase. 6.  There needs to be honest disclosure in advertising.  Telling the public that francising is safer is not being honest.  There needs to be consequences for false advertising.  7. Zors who give inflated false earnings claims to SBA loan officers and the loan officer puts the inflated fradulant numbers on the loan application there needs to be severe consequences for both the zor and the loan officer.8.  There should be an easier way out for zees if there is more than 50% of the zees failing.  This is proof the zor was using the zees to get to a proven system. These zors that do this should have consequences. People should be reimbursed since they were told and sold a proven system

If this is not done the world of franchising will get, if it hasn't already,  to the point everyone will not trust anyone trying to set up a system that is honest, ethical and really wants to see people  be successful.

Richard I believe you have a great system

You are only one man in a big world.  There is not enough lawyers that have your knowledge.  BMM is not a household name yet.  I believe one day it will be. 

I don't believe former zees write their stories for sympathy.  I do believe many are seeking knowledge on why and how they got fleeced. 

The sad part is after you understand how it happened unless you have lots of money you can't go after the one's that fleeced you.  They got it all. 

I do not believe zees are stupid.  Most zees do not deserve to experience the hell they are living.  Whenever someone is purposely lied to and they are robbed of the fruits of their labor it the one who is the robber that should be punished.  Most zees are taken right from the beginning.  It is very obvious.  That is why people are screaming fraud.    

Due Diligence as Detective Work

Oldsword writes: "Richard, no question you are very bright. Also, no question you know franchising. However, you make an erroneous assumption in your argument - namely, that we (franchisees) are just taking the franchisor's word and we are not hiring the professionals required. As the previous gentleman said, we DO hire attorneys, we DO hire accountants."

You haven't read and understood Richard's article: unless you have the proper and informed skepticism you will never correctly employ pre purchase due diligence.

If you cannot afford proper pre purchase due diligence, you cannot afford to make the franchise purchase.

And no, the nice man from the Government is not here to help you.

You can pay me now for pre purchase due diligence, or you can pay me later for litigation.  Simple choice.  Simple story. 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Michael, Perhaps I wasn't

Michael,

Perhaps I wasn't clear. It is not the cost. It is the "not knowing there is a problem". Do you believe that people continue buying into these things KNOWING there are massive franchise fraud problems out there? Franchisors are fully aware that this information has not been distributed to the masses which is why sales continue. I was able to afford pre purchase due diligence and did pay for the info. As Richard and so many of you have stated, the information is almost impossible to uncover unless someone with exceptional expertise in franchising is the one doing the digging. Had I known, or any of my counterparts for that matter, that this was as pervasive a scam as it is I would never have even contemplated it.

It is not the money that puts people in this position. It is the lack of publicity of these problems, the fact that the government gives franchising an implicit "wink" and groups like The Wall Street Journal.com that gave my franchisor a top listing even though people are dropping like flies. The information they used to give these franchisors the top listing? The damn UFOC/FDD. They used the same info that I had.

Get off your high horse that we aren't willing to speak to YOU. We are but we are not privy to most of these problems or, again, the pervasiveness of them, to know. It is not until the scam is uncovered that we find ourselves scrambling. Yes, we believe major investments such as this to be regulated. For that I am guilty.

Until you got stung you couldn't have cared less about franchise

fraud. That's the problem, Sir. The only people screaming for law change are the broke/fleeced victims. They don't/won't/can't pay for effective lobbying, so nothing will change.

But it is your loss, and - like it or not - it is your fault. If you don't get on line and search out expert help before you stick your head into the lion's mouth, that is no one's fault but yours.

No one can put himself at that level of risk without hiring expert pre investment due diligence resources and then, after learning he has been robbed, blame the "system".

The system provides help, if you choose to hire it. If you don't it's not the system's fault.

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Re: Until you got stung you couldn't have cared less about franc

Sorry, but to this day you can't find out information regarding my franchise. The people who have been stung, and there are many from teachers to workout specialists to bank svp's to mortgage originators etc. within my system, are completely sapped by the time it ends and the company is pretty heavy handed that nothing is out there on the internet. Yet, the number of failures are significant.

Franchisees have little hope of finding out beforehand as long as these contracts and FDD's are written by lawyers who purposely distort the truth in a way that only a handful of professionals know how to decipher. As long as people are out there saying "we CAN'T change anything" then that is what will happen. Instead of hearing "can't", those that are interested in making a change (and wield some sort of clout) should by working on HOW. As stated before, there are a lot more franchisees than there are franchisors. Add in all those that failed previously and the numbers increase even more significantly.

Had I read anything about my franchisor other than it being a Wall Street Journal.com Top 25 franchise I would have questioned it. But even the damn WSJ didn't know. How the hell am I suppose to know if their own analysis couldn't figure it out? We all hire professionals to look into these things. Stop the crap. As much as I now think this site is helpful, there are relatively few franchisees who even know it exists and relatively few members of the public that know of the problems of these scams.

He who does his own due diligence - for the first time ever-

and wonders why it isn't competent, might think about looking in the mirror for the person who screwed you over. Competent due diligence would have saved your investment from going to the scammer. But Hey! Think of the legal fee you saved.

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Due Diligence Obstacles

Oldsword writes: "Get off your high horse that we aren't willing to speak to YOU.

We are but we are not privy to most of these problems or, again, the pervasiveness of them, to know.

It is not until the scam is uncovered that we find ourselves scrambling.

Yes, we believe major investments such as this to be regulated. For that I am guilty."

Regulation is not a substitute for thinking.

Bob Purvin wrote about the Franchise Fraud almost 17 years ago, and if you would like a copy of the book, I will send it to you.

But, Richard is quite right.  Nobody wants to know that their franchise dream is nightmare, and certainly nobody wants to pay to have their dream examined.

People have an unrealistic idea about what they can earn in a franchise and simply don't want to look at their choice too closely.

Selection bias will ensure that there are enough people who succeed despite having very poor choice strategies - unfortunately some of these people will become unwitting shills for the franchise industry.

Richard's skill lies in his historical knowledge about the traps he has seen before.

My own skill lies in knowing when and how people make bad decisions that nonetheless look good. 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Re: I'm not interested in what you deserve or why. One at a time

With friends like you , one certainly doesn't need enemies. especially in the franchise business. You've got a bit going each way it seems. Thank God I'm in Australia and you're a Texas cowboy.

Is Pre-Sale DD enough to materially reduce risk?

Yes and No.

Yes if you can:
* identify and bunch all the rogue franchisors to one side, and
* if the "sweethearts" never sell to the blackhearts, and
* your renewed contract is significantly identical to the initial one, and,
* your franchisor's son doesn't want you high-volume store, and...

No if any of the above unscalable risks can happen while all your mom-and-pop life savings are sunk in your rental business.

Richard's FranWhacks absolutely skims off the floaters in the industry's waste treatment plant. Fantastic value.

However, there remains +101 more sinister, hidden, universally drafted, post-sale franchisor opportunism mechanisms that would yield a successful DD operation but the patient still ends up dead.

Yes Whack-a-Weasel's a start: but 100% applied, it'd probably just breed a more clever fraud varmint, I'd suggest.

Les Stewart MBA
FranchiseFool :: WikidFranchise.org

Is Pre-Sale DD enough to materially reduce risk?

Yes and No.

Yes if you can:
* identify and bunch all the rogue franchisors to one side, and
* if the "sweethearts" never sell to the blackhearts, and
* your renewed contract is significantly identical to the initial one, and,
* your franchisor's son doesn't want you high-volume store, and...

No if any of the above unscalable risks can happen while all your mom-and-pop life savings are sunk in your rental business.

Richard's FranWhacks absolutely skims off the floaters in the industry's waste treatment plant. Fantastic value.

However, there remains +101 more sinister, hidden, universally drafted, post-sale franchisor opportunism mechanisms that would yield a successful DD operation but the patient still ends up dead.

Yes Whack-a-Weasel's a start: but 100% applied, it'd probably just breed a more clever fraud varmint, I'd suggest.

Les Stewart MBA
FranchiseFool :: WikidFranchise.org

Yes it is - depending upon who is doing it.

Beyond FranWhack there is very competent due diligence on both the deal and the legalistics. You would be a fool to do your own due diligence if you have never before done due diligence ihnvestigation of a small business investment that is franchised. You have no chance at a competent job doing that yourself or with any general business lawyer or accountant.

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

I agree with you Richard

The problem is people, even the most educated people do not know what you know. We need at least a thousand more Richard Solomon's out there. Unfortunately there isn't thousands of lawyer's like you.