Spotting a Franchise Scam

There are many franchises out there that are clean and legitimate and we have no problem with that. However, whether you like it or not, there are also several scam artists out there. These scam artists, even worse, are providing “franchise opportunities” to businesspersons and they may go unnoticed for many years. Think of Bernie Madoff. You have to be alert at all times. The following are some guidelines to spotting a franchise scam.

Is it too good to be true?

Make no mistake, any franchisor will make things appear better compared to what they actually are.  They are simply pointing out the positives without drawing any attention to the negatives.  It’s a common sales tactic

But there is some reasonable limit to which the franchisor might represent her or his business. You should therefore exercise strict caution. Simply speaking, if the deal is too good to be true, you are staring at a franchise scam.

Too Much Urgency

Among the ways a potential franchise opportunity may misrepresent itself is through creating the impression the opportunities are quickly disappearing. Well, this might be the case with some. However, you need not to forget that it is a slow process setting up franchises. When you happen to meet a potential franchise opportunity which is pushing itself down your throat through insisting that when you fail to act now, the opportunity is going to disappear, treat this as a red flag you are being scammed.

Do Nothing, Literally

This might be the most common ruse of all concerning scam franchise opportunities. They market themselves as providing a business whereby you have to literally sign on, and the money is thereafter going to literally start raining. You probably have seen them. Be alert.

It is never that easy making money. And when money is just that simple and easy to make, then why should someone in his right frame of mind scan items, flip burgers, or pump gas? In this cases, the scammer is always going to take your initial investment, and that is the last time you’re going to hear from them. Avoid them at all costs.

Where’s Franchise Disclosure Document?

When looking forward to purchase a franchise, the Franchise Disclosure Document (FDD) acts as the most crucial document that you are going to have access to. When you happen to meet a franchisor who skirts around the issue of letting you have the document, or outrightly admits to not possessing one, then treat this as a scam. No two ways about this!  Here is a video outlining what to look for.

Let Your Common Sense Rule

When looking for a prospective franchise opportunities, ensure you are using your common sense. You have no doubt, as a businessperson, built up some keen intuition. Ensure you are utilizing this, and do not let yourself be blinded foolishly by a promise of prospective riches. You may be falling into a deep franchise scam.

The 5 Best Franchises to Invest In

As a smart investor you are, perhaps you are now looking for the best and most profitable business opportunity to invest in. Well, you are here at the right place. This article is going to take a look at some of the 5 best franchises to invest in. So just continue reading through the list and you might just strike it rich.

1. Health Club Franchises

Only a few industries post year after year growth. The health club is an industry which accomplishes this feat. The significance of being fit and healthy is something which will never fade. There are some up and coming franchise concepts focusing on a specific niche segment which have proven to be quite successful within their market. It is a big pie and there are enough pieces for everybody and the earlier you take your bite, the better.

2. Senior Care

In the past two decades or so, there has been an exponential rise in senior care and adult living support. The type of franchise provides caregivers and facilities to help the elderly to live comfortably their last days. The initial startup capital in this line of business may be between $100,000 and $200,000. It’s also quite important that the people who invest in this kind of business also get the satisfaction from serving other people. You can never go wrong with this kind of franchise.

3. Food Trucks

Food trucks popularity has really grown up in the last 10 years. They are considered now to be cool, and among the best chefs in the world are investing in this kind of business. You also can the plunge. Not to mention that overhead is significantly less when compared to a restaurant, and you are also going to serve food in a wide range of markets. It’s worth venturing into.

4. Concrete Cutting

Really? Now this must be some franchise opportunity probably you’ve never heard of. But now, there is a big need for smooth sidewalks, and only some few companies provide this kind of service. This is where you can really make a big profit. The startup is around $130,000. However, the yearly profit may be great.

5. Fast Food Chains

Some franchises will never go out of fashion. Every year, fast food restaurants continue to grow with innovative concepts. Look at the the Wendy’s, Burger Kings, and the McDonald’s. This may be an expensive but less risky business investment. But it is advised that you should be very cautious investing with some new concept which may not stand the test of time. Most restaurants normally go out of operation within the first 24 months, and you do not want to fall in this trap.

All in all, whatever the franchise opportunity you decide to invest in, ensure you have the passion for it. This is something you are not going to see on paper, but could be among the most critical factors to your success in the business.