On a Scale of 1 to 7, How predatory is this system? Or that one?
Due diligence (mandatory, from a certified service provider) is necessary if you are entering a franchise agreement because of the many hidden business risks.
When discussing a pending Colorado lawsuit, I tend to agree with Michael’s prediction:
I believe that the law in this area will turn out to be, in essence, that you can franchise any piece of poo, as long as you “disclose” in tricky legal fashion that you are a piece of poo.
It is of course a stupid law that would protect investors in franchise systems [franchisors] by allowing any old piece of poo to float through the system – but such is the dedication to the power of disclosure laws, much like the efficient market hypothesis, our regulators and legislature will continue to allow indentured servitude as long as it properly disclosed.
This is the state-of-the-art of legal protection in the home of franchising. And they are very aggressive in advocating for this lack of accountability for franchisors around the world.
I think that Seid‘s position is legally correct, [franchisors have zero duty to provide a proven system] even though both immoral and absurd.
But that is the problem prospective franchisees face – any piece of poo wrapped in a franchise agreement, and FDD can be sold for hundreds of thousands of dollars to the unsuspecting public who believe that they are buying a “proven” system.
Disclosing you are a worthless piece of poo is all the protection that Big Franchising is willing to give you.
Go ahead and choose your Type of modern franchise [see Bristol Stool Chart, above]. Or…
If you knew how to separate the pepper from the fly poo, you’d start your own business and not share an industry rife with “proven” psychopaths. [social predators: lack of conscience & empathy, glib, bullying, violence]