Do Your Due Diligence
Wiggin and Dana’s Franchise Law Blog: “The franchise litigation I’ve seen typically involves franchisees claiming that they skimmed the documents provided to them and called a franchisee or two. Whether these claims are made to try to avoid responsibility for reading all the disclaimers and waivers contained in the UFOC or whether people on the verge of buying their own business don’t do their due diligence is not really important — it’s probably some combination of both. But I’d venture to guess that the average individual franchise operator does not spend the recommended 30 hours reviewing/studying these materials and interviewing people in the system before they decide to sign up. Having a dispassionate, business-like view of a franchise as an investment with substantial risks is the only way to approach the endeavor. Otherwise, franchisees are likely to ignore warning signs and avoid asking difficult questions.”
Vondre Whaley on March 12th, 2005 3:51 am
Hello Mr. Carlson,
Your post is definitely something to consider when buying a franchise.
Before starting my newspaper company that publishes small shopper type newspapers, I looked at several franchises. After viewing the UFOC form and talking with a few owners mentioned in the form, I definitely learned more about that particular franchise organization.
If I didn’t read the UFOC, I would have made a bad financial move.
I think some people get blind sided by the slick brochures and the idea of owning something profitable. If only they would read what’s before their eyes, they would be able to make better informed choices.
Good Success!
Vondre’ Whaley
Jim Coen on March 14th, 2005 6:35 am
Your suggestion of at least 30 hours to investigate a franchise opportunity and validate a UFOC is an excellent one.
Any franchise investment that requires capital and time is worth at least 30 hours to make sure that franchise opportunioty is the perfect fit, no matter how much the investment is.
Jim Coen
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