Are You a FranWad?
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Well, if you won't pay $750 to attend a seminar to understand how to perform background investigations on franchisors, you are probably a FranWad.
Richard Solomon, writes over at franchise investment site BMM, about FranWads:
"I see amongst the franchisee community an intense resentment at having to pay significant legal fees to obtain investment risk reduction that they believe they are automatically entitled to from the government and are not getting.People who believe that professionals ought to "step up" and provide protection for investment savvy deficient potential franchisees, either before or after they have been fleeced by crooked franchisors, seem to me to be the heart of the constituency we would be trying to help.
Accordingly, I seriously doubt that franchise investors would pony up from $ 500 to $750 plus the cost of attendance at the due diligence seminars.
Try as I might, I cannot bring my self to believe that franchisee wannabes who won't pay for competent due diligence now would suddenly start doing so because we four made this program available.
Mike Webster made a very cogent comment last year that what I have in mind has to be a great deal more "cost friendly" in order to get franchise investors to avail themselves of it. He is right.
In my own due diligence practice, the turndown rate is over 80 %. People want to pay $ 200 to have some lawyer - any lawyer - "read the contract".
Every failed franchisee did just that - limited his due diligence costs to just a few hundred dollars. Then they can't understand why they didn't get competent help and ended up losing everything they have in this world.
The 20 % that see what I am saying about the need for competent pre-investment due diligence don't get fleeced. The 80 % who are just too damn cheap get slaughtered and end up in bankruptcy.
Webster was right and I was wrong.
I have decided to just continue representing those investors who will pay for killer due diligence, and to let the rest of them take their lumps. I aint their babysitter, and I'm not going to invest in trying to change their perception of risk management."
Jeez, I hope that I was wrong!
Otherwise, people will continue to get ripped off by the Franchise Fraud.
