| |
| |
|
patsbusiness2.com
|
|
|
|
Franchise Buyers Lying On Forms
The Federal Trade Commission which governs the franchise industry thru the franchise rule, which enforces Franchise Disclosure laws seems to think that consumers need to be protected even when they lie. Often The FTC takes complaints from consumers who claim they had been ripped off or lied to from someone selling a Biz-OP or some corporation, which sells franchises. The Federal Trade Commission will not admit that at least two-thirds of the incoming complaints are made in falsehood by consumers; as a participant in the industry I can safely say that much misrepresentation comes from the buyers side and not from the sellers. I would like to discuss the fact that many franchise buyers who have 2.2 kids, credit card and short term debt in excess of 150% of annual earnings, college degree, BMW, Mini-Van, will claim on application forms that they have excellent credit and cash in the bank in excess of the amount needed to start the franchise. Over 70% of the applicants who claim this cannot even get an additional credit card or buy a car without 0/0 financing option currently available. Yet they often say they have "X" amount of cash available when really they have nothing and many are about to lose their jobs, through downsizing, right sizing or their current employer filing for bankruptcy. You know the companies I am talking about. Without placing judgment on the falsehoods and giving these consumers the benefit of the doubt (which they showed to not be worthy of), maybe they just do not realize that if they lose their jobs they will be out of money and pushing a Home Depot shopping cart with their remaining worldly possessions within 2.4 - 2.6 months. Many may not realize that the credit rating required for a small business of their own, franchise or otherwise, is higher than that required when buying a car with no money down. They equate their recent purchase of a car with zero down or a home with 2.5% down as having excellent credit. Even the SBA lendors will require 15% minimum and usually 25% and banks are a little sketchy right now on any new business. True franchises less than other businesses, but they are a little tough right now. Jeez, you would think it was their money, they are mere bankers. The bankers run potential franchise buyers around, they give franchise buyers answers like "The board will be meeting next week" or "Can you give us more collateral." Why? They already have 20% of it guaranteed by the government in the case of an SBA Loan and the entire business is on the hook including all assets of the newly formed company. Many inquiring franchise buyers often state on an application form when asked how they will pay for this business; "with a small business loan." I cannot offer a franchise to someone with no money. That is a sure failure being undercapitalized in any business, franchise or independent. Therefore I do not offer the franchise because they do not meet our criteria. If they secure financing and can prove it then they qualify and then we can offer them a franchise. By giving them a UFOC we are in essence offering them a franchise. Our franchises are only available to people who are reality based and tell the truth. We cannot allow someone in our system who constantly exaggerates, lies or inflates his or her current net worth, borrowing ability, earnings or assets. Just like you cannot hire someone who lies on their resume, makes up degrees earned in college or accomplishments at the FTC, or do you? Remember in franchising, we are stuck with the franchisee for the remainder of the contract once signed and most franchises have automatic renewals for up to 20 years. If we get a bad apple in our system it hurts all the other franchisees and our brand name which in turn hurts all the previous buyers (consumers) into the system in sales, ROI, and amount they make if they transfer their franchise to a new buyer. We must protect those current franchisees who have been forthright and are team players as much as the rights of new buyers. The public (consumer) is not the innocent dupe that the FTC makes them out to be. "Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
MORE RESOURCES:
Small-Business - Google News |
|
|
|
RELATED ARTICLES
How To Ruin Your Business If you're like the rest of us, you've spent a lot of time trying different things to make your online business come together. There are countless methods of conducting a viable marketing career, but there are also as many ways to destroy one as well. How to Bond a Business Relationship When should you create a foundation in order to solidify a business relationship?Before you bond any business relationship, you need to make sure that this is a relationship that you both want to have. No relationship is a one way street; the relationship must work in both directions. Entrepreneurs and Franchisors Watch Out New Franchisors and Entrepreneurs need to watch out as they enter into the world of franchising. What advice can I give to a new franchisor, I was asked today by another entrepreneur with a wonderful new concept; what are the tiger traps that lay ahead?So you are a new franchisor? Who can you trust? Can you trust FranData? The Industry's information source was thought to be a friend, is it? Well they can get you on a list so that SBA Loans for your new franchisees go smoothly. Franchising Industry Burdened in Over Regulation There were only an estimated 1800 active franchisors in this country at the end of 2002, that number down from 6000 in a single decade. It is not hard from this effort to increase regulations to see why. Reclaim Equipment Detailing Industry and NPDES, EPA, Storm Water Rules It behooves every professional mobile auto detailer to stay up with the reclaim equipment necessary to comply with the NPDES, EPA and storm water rules. Every company has a responsibility to not pollute the water supplies. Is Your Small Business Name Important? You bet a name is important. Many small business owners try to come up with a clever name for their business rather than one that explains what they do. The Triple A Way to Spark Your Companys Profits Winning small and home based businesses today must continually shake things up to stay in the game. Whether it's adding new marketing twists on existing products and services or anticipating customer wants with compatible new items you can add to your product mix, hatching new ideas and concepts is vital to a profitable company. Entrepreneurs Go Virtual! With the massive explosion of start-ups and home businesses developing, you'll be hard pressed to not know of someone going down the entrepreneurial route. Nowadays you can set-up shop and start trading in a matter of days, and the preferred choice for the neo entrepreneur is a service called Virtual Offices. Increase the Wealth in Your Community Many of us have noticed how some nearby communities seem to be "wealthier" than other nearby communities. They seem to have more shopping markets, more restaurants, more choices; items often cost more in these communities than they do in surrounding areas, yet the affluence remains where the prices are high; people are drawn to these communities, bringing even more resources and more wealth. Pressure Washing Business and Post Fire Cleanups Many have not experienced a fire up close. One year about 15 years ago I almost lost my house as did our neighbors to a wild fire. Organizing Tips for Small Business Success If you discovered the bottom line in your business depended on the organization in your office, your reaction could range from complete composure to sheer terror. Organization certainly has an effect on your bottom line - and just as significantly - on your peace of mind. Covenants Not To Compete: Another Franchise Quandary Imagine that you have operated a successful franchise business for the past several years. Your franchise agreement's term expires in the near future and you are contemplating whether renewing the agreement would be a wise business decision. Boat Detailers; Add-on Products and Services As a Boat Detailing Specialist, you may want to offer services such as making sure your clients' boat's batteries are charged and offering to charge them or test the boat before they arrive for their departure. This is an easy service to provide and will keep you on the top of the boat owners list of reputable and reliable service companies. If You Want Business - Be Consistent Why does consistency in the message have an effect on how the business relationship is formed?Your message to others needs to be consistent. You need to define your expertise and develop your elevator pitch. 7 Cash Flow Secrets Your Accountant Never Told You Looking for ways to boost your cash flow? As a small business consultant, I make these recommendations to my cash strapped small business clients:1. Shoeboxes are for shoes, not business records. Dispute Resolution; Competing With Other Franchisees If you are in a franchise and have a territory dispute with another franchisee you need to prevent a lawsuit use dispute resolution techniques to resolve the dispute. Competing with other franchisees is a subject that franchisors would prefer not to need to talk about. Starting a New Business in a Small Town Q. I am a former pastor who left the ministry after sixteen years to spend more time with my family. Small Business Spoiler - Procrastination One of the most common issues that comes up for business owners is procrastination -wasting time, putting obstacles in the way of taking action towards goals, making excuses for delays, creating confusion/busyness etc. Procrastination is a self-defeating behavior. Corporate Shells A corporate shell could be liken to a house that had been occupied by a family, prior to the family moving out it was a home. But now it is just shell, a skeleton a plain house with nobody in it, but if a family was to purchase the house and moves in, it becomes a home. Proper Care and Feeding of the Business Owner That sizzling sound you're hearing may be a symptom of a major hidden cause of businesses closing their doors. It's called burnout.
|
|
Small Business Information | Traffic Building Information Powered By: Work At Home With Google - FREE! |
| © 2006 |
