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Franchise Horror Stories

When one purchases a franchise it is because they want to be business owners and taught by professional business owners (franchisor) who have proven business models that they follow step-by-step. 

Franchisors interview potential franchisee's period.  They know whether that person has experience or not and/or can follow their business model.  The purpose again is to "learn how-to".

Alot goes on behind closed doors after you're into a franchise.  Often too late to get out because of the capital invested.  That is when you find out whether there is a proven business model in place in all areas, especially for marketing, and whether the projected gross revenue is based on actuals or some other calculations.  You also find out if you raise too many questions you are treated like nothing by the franchisor for raising those questions and that you are always to blame for your business not working. 

So to those who again blame the franchisee for their business failure - not every case is based on the franchisee's failure.  Once you become disappointed in your franchisor it is very hard to continue the relationship in a productive manner on either side.  If franchisee's were well versed on starting and operating their own businesses they wouldn't need a franchisor, especially one that is not well known like McDonalds, Burger King, Kentucky Fried Chicken, etc.

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franchise may be profitable or not

The reality is one, franchise can be profitable or not! When we look at whether it pays to buy or not a franchise, we should first look at the overall history of the franchise and its franchisors. In my opinion larger franchise tends to give more right than investing in a smaller, lower value franchise. But my recommendation as an accountant is to analyze the history of the franchise, its skills to the market and whether in the region where it intends to mount whether or not it will work .. public analysis is very important.
This is the beginning.

Success to all. Excel Online

If You really want to put

If You really want to put Your business forward, You have to go on Your own. nothing more easy :) just kidiing, Thats goood for starting and get some cash to open Your own stuff .


WOW~ Amazing! Agree with you. My dear friend :)

I actually had a good franchise experience

I owned a senior care franchise for 6 years before selling it in 2016. My experience with my franchisor was actually very good. I invested knowing I would have to work hard which I did and I became very successful in the business. I did find that I WAS the business though so I could never be absentee and senior care is 24/7 with no weekends or holidays off. You never know when a senior is going to need care and to be successful you have to be able to respond quickly. In this business, not just the franchise, I became married to my cell phone. I could never be away from it due to the unknown nature of employee call offs or short notice care needs. This is the part I got tired of and made the decision to sell. I also found that I didn't require much, if any assistance from corporate and I got tired of paying royalties and ad fund fees every month. I knew going in though that this was required so I don't blame the franchisor for it. It's just part of the game. Once the business was established, I found that I could take a day off or a weekend, as long as I had my cell phone with me. Some weekends were very quiet while other weekends, my phone exploded. Again, this is the nature of the industry, not the fault of the franchisor. I wouldn't blanket the entire franchise world as being bad as I had a very good experience and gave me the experience to open my second business. Good things: Franchisor was there for assistance if I needed it. They were very helpful in working with me to sell my franchise when I made that decision. Very responsive to any questions or suggestions from the field. Made an effort to connect other owners to offer support and share ideas. Bad things: I don't feel like I got the advertising support that I was paying for. I could have used those dollars locally to do better things. That's my only negative thought about my franchisor. My new business is not a franchise so I no longer have to pay royalties and ad fees but I have better sense of what is needed to be successful from my franchise experience. Bottom line is don' go into a franchise thinking you will be successful and make money just because you are associated with a franchise. It takes hard work and dedication on the part of the owner. Once you get the business up and running successfully, you can the enjoy the benefits of being a business owner. More money. Flexible schedule. No boss telling you what to do. Signed, Happy with My previous franchise experience.


Thanks a lot for your post !

My take on franchising generally...

The simple facts are these. Franchising is, and will never again be, what it was at one time. Regardless of concept it is today's multi-unit franchisees who have been with systems for a very long time are those that are most successful. Whether one is considering an emerging franchise or an established one the days of maximum EBITDA and real cash flow are over. Today, investing in a franchise is no less then, in most cases, buying yourself a job. Even then due to the costs of doing business, rules, regulations, rental prices for space, cost of goods, service business trends, and the next newest thing cast serious infection on the industry in general. Why the pursuit by little known or even well established franchises to international markets? A rhetorical comment really. When you can pay 1/8th the wage amounts in other countries and avoid reporting actual sales while paying far less in taxes you can be sure that's where the crowd is headed. Franchisors continue to tighten their franchise agreements to hold you personally liable in nearly every instance, blanket you with post term covenants that could and will cause you financial ruin, and have figured the very many ways to manipulate the FDD so that even your due diligence will be skewed in their favor. While true there are some successful and prospering brands and services they are today anomalies and not the rule in franchising. No matter what the IFA would have you try to believe Franchisings best days are now visible in the rear view mirror.


In the process now w a FAILED brand. We overcame their untested/tanking brand and lack of support. And after 10 years and 7 with them being of Nothing but a hindrance; they can keep you trapped with no way out but to lose a ton of money or everything you have. It is heart wrenching how unfairly positioned the System is for a law breaking ; shady; sloppy Franchisor. FTC Good Faith and Fair Dealing Act's even when Obvious were broken; or black and white letter law on increased fees beyond CPI are being broken...a supposedly good atty will not guarantee a judgment against their actions much less reimbursement. How about FINES by the States so large that these morons won't just take their chances that no one will File an Action? Apparently; our wonderful lawmakers and attys think it is ok for a Failing Brand to keep Franchisee's Legally Trapped with a Crooked/ Corrupt Franchisor. Some zee's have spent their kids college $ and life savings while trying to fight thru it. My heart aches for those with such a story. How do these Franchisors, and their legal team as well as the Franchisee Atty sleep at night??? I Couldn't do it if my life depended on it. What I can and will do now is fight them with all that I have. I am not fighting just for me, but for all the families who's financial lives they have ruined and the ones hanging on by a thread. I may not get all I want; but they will have to answer for their actions and will be caught in their shameful act.


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Buying any franchise is a gamble.

Here's the reality of buying a franchise. You can do all the research and ask all the questions you can think of, but if you ever have to face your franchisor in court, you don't have a chance. They have more money and can litigate you into the ground. Even if you are in the right. Don't buy a franchise unless you are prepared to lose everything you have worked for all your life !

Research, research and more research

There are multiple websites and organisations offering invaluable tips and advice to anyone looking to buy into a franchise. Each of these strongly recommend doing as much research as possible prior to signing on the dotted line. The Asia Pacific Centre for Franchising Excellence ( even offers a free online Pre-entry Franchise Education course aimed at helping you to understand the due diligence process and to create realistic expectations.

Research and education can be misleading

Research will only get you so far when there is a systematic way of obfuscating what the buyer needs to know.

Education for franchise buyers tends to be supplied by sellers who want to train the franchisee how to be an easier mark. Does the Asia Pacific Centre rank franchise brands? Which brand's average franchise makes the most profit? Does a site or service rank contracts? Is a site afraid to do so for fear of offending potential franchisor clients. Does it make its money from the buyer, or does it receive kickbacks from the franchisor? Does it score which sectors are on a downward trajectory and which ones look strong?

Research will only get you so far when the education you are getting is supplied by franchisors and franchise sellers.

Starting a franchise for personized training studios...

This thread is discouraging... We're going to be franchising our training studio but we would never tell anyone you'd be paid off in 18 mths or that you can be an absentee owner or that it will be easy and only cost you $75,000! Gyms are incredibly expensive.... "sigh"

The bottom line is that a

The bottom line is that a service business of any type will depend on who is there running it. Being an "absentee owner" will ONLY work if you have a full time manager with knowledge in running a gym and providing a high level of personal services. Telling people you can be an absentee owner with a part time manager is ridiculous. It may work on 1 out of 200 markets where there is no competition, but never in a competitive market.

Beware of bad franchise

Beware of bad franchise ...
James Home Services is the worst franchise in Australia!


Another BAD Franchise I would like to alert others to is JAX TYRES.
They say they are like a Family, but wow what a dysfunctional family.
I held a Franchise for just over 5 years. The first 4 1/2 years were great.THEN the CEO decided he didn't want me anymore and the bullying and intimidation began.
It came to a head in early June 2013, when they terminated my Franchise Agreement.
My Lawyer has advised me that the termination was not warranted and that I could contest it in court.
The problem is that already they are trying to outspend me in legal costs.

Bad Franchisor

I had a similar experience with Subway. I was the "fair haired boy" for 9 years beating all their expectations. Then when I wanted out they turned the tables. I had fund a suitable buyer for my contract and Subway then terminated my contract so they could collect the buyers payment. I couldn't sue them because of a clause in the framchise contract that forces you to their arbitrator. The deck is of coursed in their favor as they use this arbitration for hundreds if not thousands of cases and I would only use them once. It took them a year to decide the case and although they ruled in my favor they did not allow any damages. A real collusion between Subway and the American Arbitration Association in NY.

I don't understand. You want

I don't understand. You want us to think Jax Tyres is a bad franchise because they didn't want you anymore? I guess the court, and not the attorney that you pay, will decide whether you have a case or not.

I read some of your comments

I read some of your comments and I'd like to take some advises from you: I am going to write a research project about franchise, but still not sure which side of this topic I should choose ( I mean bad experience and how to avoid it or good side when at the end everyone is happy). I will be very pleased for any help and advise:)

writing a paper on franchises

Anna, did you ever write this paper? I used to own a franchise and now I am a consultant helping people buy franchises that are suitable for them. If you'd like opinion I'd love to share; if you wrote paper, I'd like to read.



I thought I was getting snuffed by these guys because they didnt return my calls or respond to my emails. I guess it was a blessing in diguise!

A Snap Fitness Owner's Story

For potential franchisees: Consider carefully your available resources in terms of time and money.

Don't believe the sales pitch that you can run a successful snap while also working full time somewhere else. This would only work if you are able to pay a full time, sales oriented manager.
Also, you most likely will NOT breakeven within the first 6 months. It could take 12-18 months or more. Make sure you have the financial resources to subsidize your business for the long haul.
These were my two biggest mistakes. I didn't have the time, energy or finances to keep my business going.

I don't know if I failed or not because I was never able to give it my full, undivided attention. I was torn between my commitments to my family, full time employer and my snap, never fully engaged in any of the three. We took out a home equity line of credit to subsidize our business each month. After 18 months I saw the writing on the wall and decided to sell. The new owners are making a go of it as far as I can tell so I'm glad about that for our members.

I don't have a huge problem with corporate. I signed the FDD so don't really have any right to complain about any of the terms. They are in business to make money so let them to the extent that the law, the market and their conscience will allow. My biggest complaint is the way the business was pitched to me. The time and money required were vastly understated in my opinion.
Bottom line is that for some, this is a good business opportunity, for others (like me) it is not right

In my opinion:

-You cannot run a successful Snap franchise while working full time at another job
-Your breakeven will be substantially higher than 250 members
-Do not plan on turning a profit in your first 12-18 months.
-Make sure you have enough in personal savings or liquid capital to subsidize your business until you turn a profit (if you ever do)
-Franchising is extremely risky at best. You must be 100% committed in terms of all of your time, energy, and financial resources
-Take EVERYTHING the corporate sales team tells you with a grain of salt. If it sounds too good to be true IT IS!!

Here is my story
It was a couple years ago and I've tried to forget most of my experience but as best I can remember, based on an average membership of $40 (might be a little high), our break even was probably around 320 memberships (475-500 members).
We also never got personal training off the ground. #1 I couldn't find a good trainer in our area and #2 our members just weren't interested it seems. Of course if I could have found a good trainer, maybe my members WOULD have been more interested. However, it seems like the area I live in (Midwest) just doesn't see the demand for personal trainers. After all, they are joining snap for the low fees and convenience, why should they pay more and have someone hound them with training sales pitches while they are working out?
I tried the best I could to provide a clean club and friendly competent staff since I couldn't be there myself due to my regular job. When I opened I had a gung ho, energetic manager hired, who was also a personal trainer (newly certified). He was paid $10 per hour, plus incentives for signing up new members. He worked about 20-25 hours per week (all of our staffed hours except for about 5 which I covered myself, one night per week and some weekends). After a few months I bumped his pay to $11 per hour then $11.50. He was not able to get the PT going and quickly became disenchanted with the marketing, sales, and cleaning duties he was required to do. He quit after about 6 months and then it became an endless string of part time staff, usually 2 or 3 at a time who each worked 5-10 hours per week. No one stayed more than a few months so I was always recruiting, interviewing and training new staff.

I would stop in at the store in the morning on my way to work 2-3 times each week to check on the club. After a heavy thunderstorm, the satellite and TVs would go out so I was on the phone with DishNetwork. I had to meet the Pepsi guy to restock the vending machine, or the water guy for the water delivery, or the equipment repair guy. It was never ending. I could monitor the club via the cameras from my work computer (I cheated my boss out of many hours by working on Snap stuff). When my employees didn't show up I was leaving work early, using up my vacation to staff the club. I was maintaining our club website and monitoring our club email account and responding to inquiries about memberships. I was on the phone with members regarding club questions, issues, dues payments etc. On the phone with Corporate over Checkfree, door access, membership issues. all on company time. I spent my lunch hours and company time on the mostly useless to me marketing and sales webinars. All the programs sounded great, but I didn't have the time or the money to implement them.

At night I would try to keep up with the accounting, pay the bills and do the payroll. Luckily my good friend is a CPA and helped me out a lot. There were quarterly payroll taxes, quarterly income taxes etc. One of my staff had a child support order against him so that was more work for me.

Meanwhile my wife and kids suffered because I was always gone or busy.
You can either do all this yourself, or pay someone to do it for you. I couldn't afford to pay someone so I was doing it all myself.

Make sure you can afford either the time or the money necessary.
Eventually I couldn't (refused to) keep up. My wife suggested we seek a buyer and I agreed, two months later my club was sold. We lost about 65K in the deal but I was glad to only lose that much. The weight of the world was off my shoulders and I felt FANTASTIC!

I'm sure this sounds like whining and it probably is. I'm just mad at myself for falling for the sales pitch, overestimating my capabilities and putting my family finances at risk.

100% agree with you.

100% agree with you.

Thanks for the honest post

Thank you for your honest and open post. While others may want to be critical, I found your post refreshing. Having open my own business many years ago I warn others that it is not as easy as it looks. Sometimes it feels as if you stepped into a dark cave since you have to work so hard and everyone else is out playing and enjoying the sunshine. It takes years to make many businesses work and the rewards can be there. Saying that, I don't know if I want my children to follow the same path as I did.

Dear disapointed previous

Dear disapointed previous owner,

It sounds like you should be disapointed at yourself and self alone. As a former business owner I laugh at people that start up their own business to work less hours and ,make instant money, and rely on another job to support themselves. Then, when the new business fails they can't understand why. Anyone who has run a successful business knows that the amount of hours it takes to make it successful far exceed the amount of hours they had to work when being employed by someone else. The hours are also controlled by the clientel. The notion that you can stop in for 2 hours on your way to another job day after day and expect Snap fitness to be successful is a pipedream----meaning you have to be high on crack to think that part time hours are going to produce full time results. I frequently worked 80 hours a week when I owned my own business. I was happy to do it because it was mine. I could go to lunch when I wanted. I could take a day off when I wanted(if my schedule allowed it). Sounds like you did not have a realistic idea of what owning your own business means. Hopefully you have learned something from your experience and if you ever decide to venture out on your own again you will put in 200%. But it sounds like you are still passing the buck. You have to ask yourself....."what did I learn from this." If you cannot see your role in the failure of your business venture then all that time was exactly what you think it was.....JUST A WASTE OF TIME.

this sounds like it was

this sounds like it was written by taunton himself

Well Said

I have owned my own (Successfull) business for 20+ years and I still put in 200%, you have to.

Granville_Bean's picture

Personal training at key card gyms

Former F'see Guest says: "However, it seems like the area I live in (Midwest) just doesn't see the demand for personal trainers. After all, they are joining snap for the low fees and convenience, why should they pay more and have someone hound them with training sales pitches while they are working out?"

I think it's the second part rather than the first part, not where you are but what you are. People who want to sign up for a "come any time on your own schedule" gym implicitly are comfortable working out by themselves. Combine that with selling on price and your customers are NOT good candidates to buy personal training.

The gym our family belongs to is twice the price of franchised gyms in the same county.  It has limited hours and is staffed 100% of the open hours, usually by two or more staff. The front desk and cleaning functions are separate from personal training.  Trainers do not staff the desk or clean (other than wiping down for their own clients).  There is a Personal Training Department with a full time Head Trainer and maybe 4 or 5 Trainers most of whom are part-time. The Trainers get paid for each session, not hourly to staff the gym (I don't know if the Head Trainer also gets wages/salary).

This a staffed gym that emphasizes SERVICE. That is the kind of gym that can sell lots of personal training.  I think most members would be appalled by an un-staffed gym and would not join one even if it was cheaper with 24 hr. access.

I will attest to this.

My experience in the fitness industry cost me over $200,000. These franchiors are theives at best...

you failed because

You had no experience in business. You failed because you had no experience in fitness. What the hell were you thinking? Fitness and restaurants have the highest failure rates of all business. Shame on you for being so wreckless with you family's financial future. If you dont have industry experience don't open a business in that industry.

Barbara Jorgensen's picture

You failed because they premeditated your failure.

The truth is the truth is the truth.  Forget expericence.  They were after YOUR money and got it.  Shame on all the rogue zors who premeditate the fleecing of marks who believed they were on their side.  They just want all your assets.  They do get it.  Shame on them.  May our government acknowledge your bad ways and pass laws that will make you end up in the cross bar hotel.  (Hopefully right next to Madoff who deserved what he got.)   

Granville_Bean's picture

All your base are belong to us!

BJ Sez:  "They just want all your assets."

oh Lord, it is the lady who purchased a fitness franchise

Started by a restaurant group. It doesn't get any more dumb than that.

you failed because

You had no experience in business. You failed because you had no experience in fitness. What the hell were you thinking? Fitness and restaurants have the highest failure rates of all business. Shame on you for being so wreckless with you family's financial future. If you dont have industry experience don't open a business in that industry.

Barbara Jorgensen's picture

BS, and did I say BS!!!

You don't read anything.  Where did you fail to read that Ray Wilson an icon in our franchise was all part of our franchise.  Why do you think all the zees were angry.  Get off your high horse and acknowledge that many in the franchise world are misrepresented over and over.  Shame on you for trying to make an easy buck on the hard working people of our country.  Just misrepresent, gouge and fleece the hell out of them. 

People be careful.  There are alot of bad people who only see $$$$ when they look at you in franchising.  Trust nobody.  Don't trust the internet because that is where the fraud is. 

Barbara Jorgensen's picture

Over 4 years later

My opinion about franchising has not changed.  People be careful.  It has been almost 10 years since we opened a franchise.  We went through franchise fraud, financial hell and survived it.  Remember there is no way out of financial hell except to go through it.  I still believe franchising can be dangerous to your financial health.  Make sure you get to know the franchisor.  Signing a contract is just like a relationship.  You wouldn't marry someone usless you know them.  Get a franchise lawyer, a good CPA.  Solidfy the franchise agreement.  I am confident your zor will be against it.  If they are, you've got your answer.  DO NOT DO IT!!!! 

Who the hell is Ray Wilson?

You never met the Guy. Your IQ is so low that you still need to read the instructions on a roll of toilet paper.

Granville_Bean's picture

where the fraud is

" Don't trust the internet because that is where the fraud is. "

Says someone on the internet!

This woman is endless entertainment.

She needs to start a clinic for re-tarded kids so they can feel smart.


It seems to me that you require stooping to name calling and insults in an attempt to make yourself sound as though you have an opinion. This is the habit of a small mind. I personally know mentally challenged individuals who would represent themselves in a far more intelligent manner.

Snap Fitness ranchisees or potential franchisees beware

If you choose to sign with Snap Fitness.....Beware
If you become dissatisfied with them and don't want to renew your agreement, they have a clause in the agreement that prevents you from doing business on your own for two years. Peter Taughton is no better then a mob boss forcing franchisees to stay with him. And the sad part is that they really don't do anything to help you succeed, except have their name, which I have found no one is familiar with the name anyway unless they have actually driven by a Snap in their area. Biggest mistake I have ever made in my life.

My experiences with Snap

I looked into buying a Snap Fitness franchise.In fact I made an offer on one in Eagan, Mn. I found out later my offer was not presented to the owner, but instead my offer was used to get a friend of the
Snap franchisor's off to snide to make an offer. It turned out the offer was lower than mine--but the
old Eagan owner never saw mine so he got stuck taking the lower offer from the friend of the salesman.
How unethical!

Plus I have gotten numbers directly from club owners at Snap who have put their clubs up for sale. I have compared them to numbers provided me by Snap salespeople. They are different--which proves
to me Snap salespeople are "cooking the books" inflating profits and deceiving potential new franchisees.

That should not be surprising to hear considering the founder of Snap was convicted in court in 1999 in St. Paul, Mn. of fraud!

The Truth

I operated a Snap before leaving to pursue other ventures. Not a terrible franchise, but its all about the people running it and the location. If people focus solely on profits because they believe that is how businesses get profit, they tend to fail to service their members and staff. Everyone quits, business struggles with the revolving door system. Owning a franchise is designed for inexperienced people who don't have experience, a 'business in a box' so to speak. Their fail rates are very high, but some do make it if multiple locations are purchased (big up-front capitol). Most who attempt franchise ownership eventually focus on getting their investment returned, rather than getting a return on their investment. Breaking even then selling is too common a practice.

Snap was founded in 2003, the founder and CEO Peter Taunton was never accused or convicted of fraud, by the way.

Did you tell the seller this?

Who was it that was representing the seller? Was it listed with an independent broker? Was your offer cash or contingent on funding approval? There is much you are omitting. You sound liked sour grapes.

this is called a non compete clause

And it is present in every franchise agreement. In some states it holds up and others it will not. Didn't you read your agreement before you signed it?

Snap Fitness ranchisees or potential franchisees beware

If you choose to sign with Snap Fitness.....Beware
If you become dissatisfied with them and don't want to renew your agreement, they have a clause in the agreement that prevents you from doing business on your own for two years. Peter Taughton is no better then a mob boss forcing franchisees to stay with him. And the sad part is that they really don't do anything to help you succeed, except have their name, which I have found no one is familiar with the name anyway unless they have actually driven by a Snap in their area. Biggest mistake I have ever made in my life.

anytime fitness loser loser loser

franchise fees 5k more than snap. startup cost 60k more than snap. breakeven 100 plus members more than snap.

all franchises suck big time

Franchising is on the way out! In 10 years there will be no franchises.

SNAP FITNESS - Loser, Loser, Loser

SNAP FITNESS? The quotes just below are Snap Fitness "marketing strategies for potential franchisees" and are directly from the lips of Snap Fitness CEO Peter Taunton. They are embellishments and this is a absolute LOSER!
"Running these gyms is a breeze, all you need is an internet browser." "Recession proof." "Can break even with as few as 220 to 250 members." "Allows one manager to man the location between 15 and 20 hours per week."

Would you like to know more about this franchiser and it's CEO? Read below:

PETER TAUNTON, CEO SNAP FITNESS = Case # 24040055, Court File # K598001371, Disposition Date 3/18/1999, Minnesota Attorney General's Office St. Paul, Kaniyohi District Court, Theft-by Swindle-Artifice/Trick/Device or Other, Statute # 609.52.2.4., CONVICTED

Candy Bouguet International

Candy bouquet International US franchise numbers fall to 178... By a Guest 2011-08-19 07:42 Candy bouquet International US franchise numbers fall to 178... Candy bouquet International drops another US franchise and those numbers fall to 178... And those numbers just keep on falling down!!! Candy Bouquet International US franchise numbers fall to 178 according to Candy Bouquet International homepage. For every loss of a franchise less cash flow for CBI and more importantly less money to line Margaret Mcentire's pockets. Margaret Mcentire are you regretting how you have treated your past and present franchisees? PS: To Margaret Mcentire No matter how much you SPAM our posts we will continue reposting and posting the truth about your SCAM CBI business venture. PS: PS: Margaret Mcentire Warned you I would continue reposting and posting the truth about your SCAM CBI business venture.

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