FTC Checklist, Due Diligence for Business Opportunities, and USA Beverages
Earlier, it was reported that the FTC had shut down USA Beverages, alleging that it was a Bogus Business Opportunity Scam. Ironically, just a few days before this announcement, there was a discussion of business opportunities, due diligence and USA Beverages, in particular, on the franchise-chat site.
In less than 30 minutes, using only public information, I discovered and posted several red flags according to the FTC checklist. Further, I showed that USA Beverages had misrepresented the history of the company - a huge red flag. Misrepresenting your identity and history signals that you are hiding something.
Why was the due diligence for this business opportunity relatively easy?
The key to this search was to make a number of corporate searches, which for the most part are free in the US; this site lists all the US states in which online searches are available. The trick was to see that there were two USA Beverages, a 1994 shell in New Mexico and an active 2005 Florida company which owned the USA Beverages website. USA Beverages wanted to enhance its credibility and reputation by claiming to be a company with 10 years operating experience.
