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5 warning signs that a franchise is a scam

How can you tell if a franchise company is legitimate or not?
By Armando Bartolome |

Before getting a franchise, make sure that you are dealing with a trustworthy franchise company. In this edition of Ask the Expert, franchise guru Armando Bartolome shares five things that tell  us a franchise company should not be trusted.

Q: How can we tell if a franchise company is a scam?

A: The common tell tale signs are as follows:

1.       The absence of prototype

All successful franchise businesses emanate from having a prototype or model. This is where the entrepreneur tests the business concept for a duration of time. During the testing stage, the products and services are examined for acceptability by the target market. Last but not least,  the business model must present a healthy profitability.

2.    No Identities of Franchisees

Franchisors will always be glad to identify where the franchised operated branches are located. After all a real sign of a successful franchise is the way franchisees are operating and managing the branches.  The applicant must be able to meet and ask questions from franchisees especially on satisfaction and support provided by the franchisor

3.     No proper support organization

For franchising to be successful, it is necessary for the franchisor to create an organizational support like training, quality and standard compliance, research and development. Each department provides a strong back bone for the continuation and growth of the franchise.


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