Fraud - Getting what you are not looking for
There is an story, by Eric Ruth, in the Delaware Online about franchising. There are several parts of the story which interest me. First, the observation that many individuals leaving corporate America have large assets, both human capital and funds.
"Many former professionals boast solid retirement plans and sizable home equity, and using that capital can help leverage their business -- at the risk of losing it altogether. They escape the secure confines of corporate life for a world full of risks."
How do these seasoned business people manage their risk, how do they "do their homework". That is the second part of the story, which is more fascinating. Not one of these individuals, who was probably risking over $250,000, spoke about the need to review the disclosure document, required by the FTC or an individual state. These disclosure documents, or UFCO's, are online here. Some may not be at the California government site and can be purchased from frandata.com
Like most purchasers of business opportunities, franchise purchasers fail to realize the large amount of information that is available to them and their due diligence suffers correspondingly.
