Bad Advice about Franchise and Biz Op Due Diligence
US Franchise News has some bad advice about how to do due diligence about franchises and business opportunities. Unfortunately, it is typical of the type of due diligence many franchisees and biz op purchases engage in. The US Franchise News starts, however, promisingly enough stating:
"No federal or state agency or private organization can tell you whether a company is legitimate or operates in good faith. The FTC or the Better Business Bureau can report on whether consumers have complained about a company. But, operators of fly-by-night franchise and business opportunity scams know this, and may change the name and location of their company every few months to avoid a record of consumer complaint." (my emphasis)
That should be the end of the story: no agency, full stop, can tell you whether a company is legitimate. Surprise, surprise you have to buy this information.
But no, the story goes on to suggest:
"If you want information about consumer complaints from the FTC, request it in writing. Address your request to;
Freedom of Information Act Request
Federal Trade Commission
Washington, D.C. 20580.
Please identify your letter as a "FOIA Request" and include (1) your name, address and daytime phone number, and (2) the name and address of the company you are asking about"
Note this recommendation is completely at odds with the first observation that the"fly-by-night franchise and business opportunity scams know this, and may change the name and location of their company every few months to avoid a record of consumer complaint"
It would be just too good to be true if there was an agency that gave you out free information on reputations of franchises and business opportunities. Just too good to be true.
Technorati Tags: franchise news, surprise surprise, due diligence, better business bureau, business opportunity scams, legitimate, unfortunately, ftc, consumer complaint, business opportunities, consumer complaints, biz op, private organization, fly by night, franchisees, franchises
