Blogs for Franchisees From Wall Street Journal
I am excited that the Wall Street Journal featured Rush on Business as one of the blogs that provide insight for would-be franchisees. One of my passions for a long time on the blog is providing information to franchisees on pre-investment due diligence. Recently I ran across a potential franchisee that was told by a franchisor that he should not seek legal counsel. The franchisor told the prospective franchisee that a lawyer would only try to talk them out of the deal.
The purpose of a franchise agreement and disclosure document review is not for the lawyer to talk the client out of their franchise business opportunity. An appropriate review will help point out the legal and business risks and possible areas of negotiation. (Yes, many franchise agreements are negotiable). After the review, the client must still make their own decision about whether to proceed forward. I have been told by more than one client that a review opened their eyes to help them better understand the franchise opportunity. Some moved forward while others backed away from the deal.
There are some classic warning signs of franchisors that I have written about in the past. You could probably guess #1. There are a significant number of excellent franchisors out there. Don't waste your time on those that don't believe you should seek counsel when you are potentially investing your life savings. You owe it to yourself to do the best job possible investigating the franchise and performing the most due diligence possible.
Some of the other sites in the WSJ article are a great place to start for that due diligence including:
Blue MauMau (www.bluemaumau.com)
Franchise-Chat (www.franchise-chat.com)
The Franchise Pundit (franchisepundit.com)
Unhappy Franchisee (www.unhappyfranchisee.com)
www.wikidfranchise.org
I would also add one of my personal favorites, The Franchise King Blog. The blog's author, Joel Libava, is pro-franchise but is a big proponent of franchise due diligence.
In Iowa, what are the factors that determine whether or not the relationship constitutes a franchise? Assuming a fee is involved, what determines if payments are a fee? I have a case in Minnesota that I believe involves an unregistered (illegal) franchise. I was wondering what the factors are in Iowa.
You have provided an excellent set of post on Franchising.
Gavin Craig
Congratulations on your blog being mentioned in The Wall Street Journal. The recognition is well-deserved.
Gavin:
Take a look at Iowa Code Chapter 523H regarding franchising and 551A regarding business opportunity promotions. Those code sections should provide you insight.
Rush
Jeff:
Thank you very much. I appreciate the comment.
Rush
Rush,
A hearty congrats to you! Nice job getting in that tiny little publication.
Thank you, too, for the mention of my high-powered blog.
The Franchise King
Joel Libava
Go CAVS!
Rush,
All the best from WikidFranchise.org.
est 2009: con predatory franchising and credence good cheaters.
Les Stewart
FranchiseFool
Thanks for the information and links, would like to share this site with others http://www.franchisesformoms.com
You can find Work at Home Franchises and a whole lot of resources and Information on Financing Options, Avoiding Franchise Scams, Common Mistakes, Success Rates, useful information and advice for women and moms to help you start a Franchise Business.
Congrats on the WSJ article. I really admire your position of looking out for franchisees. I feel very strongly that franchise relationships must be completely interdependent. Having dedicated myself to franchise success at all levels, I have various blogs for franchisees, franchisors and franchise candidates. The url's are as follows:
http://21stCenturyFranchiseCoach.wordpress.com
http://franchisEssentials.wordpress.com
http://ExploreFranchising.wordpress.com