Tag: avoiding franchise fraud

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How can you identify a franchise scam?

There are all kinds of franchise opportunities available, and some seem to promise instant wealth with almost zero effort. Franchises do have a high rate of success compared to other types of small businesses, but that doesn’t mean they’re a direct path to riches.

How do you spot a franchise scam?

An entrepreneur recently asked one of our GoForth Expert section of our website how to identify the warning signs of franchise fraud. Our GoForth Expert Samir Dandekar had these tips to avoid franchise scams:

Firstly, you can choose to work only with a franchisor who is a member of the Canadian Franchise Association.

Additionally, you can look out for these warning signs of a franchise scam:

  • Slick salesperson trying to pitch a fast sale
  • Pressure for franchisees to sign gag orders
  • Insistence on cash transactions only
  • Exaggerated earnings
  • Promising a proven business model or proprietary technology that doesn’t exist
  • Promising training that never materializes
  • Forcing franchisees to spend money on so-called improvements
  • Failure to provide disclosure

As always, do your research. Be thorough, double-check everything, and seek the advice of trusted colleagues or professional advisors. And listen to your instincts!

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franchise-fraud

What are the warning signs of a franchise scam?

In the Ask a GoForth Expert section of our website, an entrepreneur wisely wanted to know about the warning signs of franchise fraud. There are all kinds of franchise opportunities available, and some seem to promise instant wealth with almost zero effort. Franchises do have a high rate of success compared to other types of small businesses, but that doesn’t mean they’re a direct path to riches.

How do you spot a franchise scam?

Our GoForth Expert Samir Dandekar had these tips to avoid franchise scams:

Firstly, you can choose to work only with a franchisor who is a member of the Canadian Franchise Association.

Secondly, you can be wary of the following franchise scam warning signs:

  • Slick salesperson trying to pitch a fast sale
  • Pressure for franchisees to sign gag orders
  • Insistence on cash transactions only
  • Exaggerated earnings
  • Promising a proven business model or proprietary technology that doesn’t exist
  • Promising training that never materializes
  • Forcing franchisees to spend money on so-called improvements
  • Failure to provide disclosure

As always, do your research. Be thorough, double-check everything, and seek the advice of trusted colleagues or professional advisors. And listen to your instincts!

For more Ask a GoForth Expert questions and answers about franchising, visit us here.

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How to spot franchise fraud

franchise-fraud

Franchising can be a relatively low-risk pathway into entrepreneurship – they get support and direction from the franchisor, and follow the structures laid out by the franchisor. However, sometimes, a franchise opportunity can seem too good to be true. Not all franchises are created equal, and you can’t necessarily buy into any franchise and wait for your riches to roll in.

How to spot a franchise scam

If you spot the following franchise scam warning signs, look elsewhere:

  • Overdressed salesperson trying to pitch a fast sale
  • Pressure for franchisees to sign gag orders
  • Insistence on cash transactions only
  • Exaggerated earnings
  • Promising a proven business model or proprietary technology that doesn’t exist
  • Promising training that never materializes
  • Forcing franchisees to spend money on so-called improvements
  • Failure to provide disclosure

How do you avoid franchise fraud?

To help you avoid franchise scam, you can choose to work only with a franchisor who is a member of the Canadian Franchise Association. Do your research. Be thorough, double-check everything, and get advice from trusted colleagues or professional advisors. And listen to your instincts!

Buying into a franchise can be a proven and relatively secure pathway to entrepreneurship, but it’s an investment in your future that shouldn’t be taken lightly.

Want to learn all the ins and outs of franchising in Canada? Check out our industry-leading small business training video program.

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The warning signs of franchise fraud

small_business_sales_proposalIn the Ask a GoForth Expert section of our website, an entrepreneur wisely wanted to know about the warning signs of franchise fraud. Sometimes, a franchise opportunity can seem too good to be true. Franchises have a high rate of success compared with other types of small businesses, but that doesn’t mean you can buy into any franchise and wait for your riches to roll in.

Scam franchisors can pressure their franchisees into signing gag orders, promise a proven business model or proprietary technology that doesn’t exist, promise training that never materializes, even force franchisees to spend money on so-called improvements.

Our GoForth Expert Samir Dandekar offered these tips to avoid franchise scams:

Firstly, you can choose to work only with a franchisor who is a member of the Canadian Franchise Association.

Secondly, you can be wary of the following franchise scam warning signs:

  • Over-dressed sales person trying to pitch a fast sale
  • Insistence on cash transactions only
  • Exaggerated earnings
  • Failure to provide disclosure

As always, do your research. Be thorough, double-check everything, and seek the advice of trusted colleagues or professional advisors. And listen to your instincts! Buying into a franchise can be a proven and relatively secure pathway to entrepreneurship, but it’s an investment in your future that shouldn’t be taken lightly.

For more Ask a GoForth Expert questions and answers about franchising, visit us here.

 

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