Carol Cross (guest) 22 May 2009 17:58
This Article written in the WSJ in 2005 is fair enough and the reporter is even handed in her treatment of franchising and appears to be trying to warn Military Veterans at the same time, I commend Ms. Bennett for her always excellent reporting and her concerns for the Military Veterans. But, I want to add to her concerns, my concern that the very high risks of buying a franchise are not disclosed by the seller of a franchise to the buyer of a franchise.
In June of 2007, the Congress/SBA passed THE PATRIOT EXPRESS LOAN INITIATIVE and veterans are now TARGETS of franchisors, large and small, because of the excellent guarantees available to the banks and the lenders.
As the wife of a veteran who bought a UPS Store Franchise, I want to warn other wives and veterans that franchising is not what is appears to be.
Unfortunately, government regulation does not protect prospective franchisees who UNKNOWINGLY often buy unprofitable and highly risky franchises because they are not given full disclosure of the RISK in the pre-sale process mandated under the FTC Rule that governs franchising.
Please read INDUCEMENT CONCERNS in the paper "Franchising Fraud: the continuing need for reform, 0l Jan 03 by the American Business Law Journal for an understanding of how law and process actually subsidizes franchisors who do not have to disclose MATERIAL risk factors to new buyers under current law and regulation.
Let the Buyer Beware!
