Work Scams: Difference between revisions
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→Bogus franchises
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Warning signs of a franchise scam: | Warning signs of a franchise scam: | ||
*High pressure sales tactics. If you are pressured to sign immediately because "prices <span class="noglossary">will</span> go up tomorrow" | *High pressure sales tactics. If you are pressured to sign immediately because "prices <span class="noglossary">will</span> go up tomorrow," or "another buyer wants this deal," do not sign. | ||
*Be wary if the salesperson makes the job sounds too easy. | *Be wary if the salesperson makes the job sounds too easy. | ||
*Promises of extraordinary profits with little risk are usually too good to be true. Example: No experience required. No selling. Earn $5,000+ per month. | *Promises of extraordinary profits with little risk are usually too good to be true. Example: No experience required. No selling. Earn $5,000+ per month. | ||
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*Ask to see a Uniform Franchise Offering Circular (UFOC) and <span class="noglossary">review</span> it carefully. This document lists current franchisees, those who have left or quit, and gives financial statements of the business. It should give you the true picture of the franchise operations beyond the glossy sales brochures. UFOCs are not legally required in BC, but demand one anyway. UFOCs are required by law in most parts of the US. | *Ask to see a Uniform Franchise Offering Circular (UFOC) and <span class="noglossary">review</span> it carefully. This document lists current franchisees, those who have left or quit, and gives financial statements of the business. It should give you the true picture of the franchise operations beyond the glossy sales brochures. UFOCs are not legally required in BC, but demand one anyway. UFOCs are required by law in most parts of the US. | ||
*Get professional advice from a lawyer and/or accountant or business advisor. Go over all the details of the franchise system. Always question where the franchise company makes its money. | *Get professional advice from a lawyer and/or accountant or business advisor. Go over all the details of the franchise system. Always question where the franchise company makes its money. | ||
*Get the seller's promises in writing. If the salesperson says one thing but the written contract says nothing about it or says something different, the written contract is what counts. Sales claims about successful areas of business — "Be a part of our five billion dollar industry" | *Get the seller's promises in writing. If the salesperson says one thing but the written contract says nothing about it or says something different, the written contract is what counts. Sales claims about successful areas of business — "Be a part of our five billion dollar industry," for example — may have no bearing on your likelihood of success. Once you buy the business, you may be competing with franchise owners or independent business people with more experience. | ||
*Before you sign any contract, take it to a lawyer who is familiar with franchise operations. Be sure you understand who owns what. | *Before you sign any contract, take it to a lawyer who is familiar with franchise operations. Be sure you understand who owns what. | ||
*Report any problems to the Better Business Bureau. See the [[Sources of Help for Consumers]] section for <span class="noglossary">contact</span> details. | *Report any problems to the Better Business Bureau. See the [[Sources of Help for Consumers]] section for <span class="noglossary">contact</span> details. | ||
