Franchise Blog

When entering the franchise business there are many risks to be wary of. One of the most important risks is getting involved with corrupt franchise companies and dishonest franchise sellers. In fact, some of these companies may be so crooked that it seems there only purpose for existence is to rip you off and you’ll be amazed at the type of damage they are capable of doing to you and your business.

Fortunately though, a huge benefit exists for franchisees today which wasn’t available many years ago. This benefit comes in the form of a franchising agreement. To put it simply, it is a disclosure document which is issued by requirement from the federal and state governments which exposes all there is to expose about the company and its history, whether it’s good or bad. So to make sure you can save yourself a ton of heartache and expenses caused by disputes and litigation in the future, make sure you focus on the section of this document pertaining to lawsuits.

This is an excellent idea because anyone who has previously dealt with a particular franchise company will not simply end the business he or she set up quietly in light of any disputes. Instead, attorneys will be consulted and lawsuits will be filed. Law then requires all history of these lawsuits to be documented for future franchisees – like yourself – to see and become aware of.

These lawsuits usually end up with the plaintiff being paid off by the franchise company as it will further hinder the company’s business dealings, if it has a few unresolved lawsuits here and there. This will benefit you by acting as a warning sign to stay away from a particular company and search for something else, if it has an extensive history of lawsuits.

In conclusion, be sure to check out the lawsuits against the company you’re interested in dealing with before becoming involved with it and dedicating your time and money to something that has a high risk of failure in the future because of the people you’re involved with.

Filed under: Franchise Advice