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michael webster's picture

Loans and Profit

Rob Bond is making a good point, especially for for those franchisors who assist their operators in getting SBA loans.

FuwaFuwaUsagi's picture


This is simply asinine. We do not need a nanny state, what is needed is a populace that has the ability to think. Simply put anyone who is stupid enough to buy into a system that does not make adequate disclosures is stupid - end of story. Right now a franchisee can request all the data they wish, and include it in the FA, if the zor does not comply you simply do not participate. It is that simple. You keep your wallet closed.

All this does is attempt to cure one of the many ills of an ill business system. It does nothing to address the other fundamental flaws of franchising. So you are simply playing wack-a-mole. Once you get this, then francshiees will be whining about something else. And whine they should because you are participating in a game where the house writes the rules and deals the cards from a stacked deck.

I have been to Vegas many times, as a speaker. I have never spent on dime in Vegas as a gambler. There is a reason for that. The same logic applies to franchising. Your only power as a would be zee is before you sign.

If zees would stop participating in franchising until the disclosures are adequate (and I would say the other issues are remedied) the problem would be self correcting. The problem is there are a lot of very foolish people running around out there. If the zors don't get them so other conman will; it is as simple as that.

Re: Who you gonna call for professional help?

It won't make any difference in naming the franchise attorneys prospective franchise buyers could talk with.

Since they won't pay for advice. And if they do get an attorney it's mostly too late since they have made up their mind to buy that franchise.

Who you gonna call for professional help?

Any thoughts on which top researchers and consultants to better understand FDDs and how it compares to competitors in earnings potential and risk?

To a smaller extent, franchise buyers should contact a franchisee attorney to preview the franchise agreement part of the FDD. Any thoughts on who are some of the best that are willing to consult? Are litigators good pre-sales legal consultants for contracts?

Don't be afraid to name names and why you consider them best.

This is Silly

Not because it isn't a good idea for franchisors to have an Item 19 FPR.

It's silly for three reasons 1) prospective franchisees don't read FDDs or pay for experienced professional help, 2) franchisees and their advocates should be demanding a "Private Right of Action" under the FTC Rule to sue franchisors and 3) FTC, NASAA and the little FTC states can't agree on Item 19 FPR standards after years of trying.

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