What franchise companies DON'T & WON'T tell you !
                 
by Joel R. Daniel


      We could literally spend numerous pages on this topic. We can't devote that much space, so we'll give you these few basics to ponder; there are a very few
     honest franchise companies that operate in the country. There are also numerous "not-so-honest" franchise companies that operate. In my experience and   
     opinion, an easy rule of thumb is the following; a franchisor which offers franchises in the $1,000 -  $5,000 range is more than likely not playing by the rules.
     Those which offer more expensive franchise packages, especially those above the $25,000 range, are more apt to be legitimately interested in their franchisees'
     success. That weeds out the crowd dramatically!

     The reasons? The franchisors which target smaller sales are interested in continuing fee generation, and repeat sales of the same business to new franchisees.
     For that same reason, franchises which offer low-cost franchises tend to underprice services, which is attractive to the buyer, yet is almost a guarantee of the
     individual franchisees' failure. And that failure, ultimately, is not in the customer's interest.

     Sound like speculation? Not really - it's history! In 1994 and 1995 two of the largest franchise companies in the world, ( Janiking and Coverall ) both settled a
     Federal Trade Commission lawsuit stemming from unethical practices regarding withholding information from franchisees that materially affected their decisions
     to purchase a franchise and also overstated their earnings' potential as franchisees. http://www.ftc.gov/opa/predawn/F95/coverall.htm  and
     http://www.ftc.gov/opa/1995/07/janiking.htm

    In part, because of these problems and increasing lawsuits and complaints from franchisees, the FTC issued the following alert for the public and potential
     franchise buyers; http://www.ftc.gov/bcp/conline/pubs/alerts/janalrt.htm

    Clearly, franchises have a questionable past and should be scrutinized closely. Premier Service Company believes, based on many years' experience in our
     industry, that general market conditions cannot honestly and fairly support an arrangement where a franchisee pays an additional 10-20% overhead cost before
     all other expenses are paid. But more importantly, the toll taken on unsuspecting individuals hopeful of creating their dream of self-employment is absolutely
     unacceptable.
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