Business model had never created adequate investor returns
Churning (serial reselling)
Disclosure laws: false sense of security
Encroachment (too many outlets put in territory)
Franchisees have no say on new brand
Franchisor corporation created to fail
Franchisor insolvency, intentional
Head lease advantage
Immigrants as prey
Incompetent or predatory: for the small business investor, the outcome is the same
Material risks cannot be accurately determined before you sign
Mergers and acquisitions
Monopoly
Must buy only through franchisor (tied buying)
Must sell business (eventually) through franchisor
Opportunism: self-interest with deceit
Outright scam
Rent increase
Renting a business causes problems down the road
Sharecropping
Success or failure is within the direct control of the individual franchisee
System designed to fail for franchisees
System ownership changes very frequently
Tied contracting
Trap for the trusting
Unconscionable conduct
Unproven business model
Unsafe at any Brand?
War of attrition
Wealth is meant to be re-distributed (not created)
Wild West of the business world
The Top +30 Business Risks of Franchising
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