Business
Opportunities or Franchises
Before
investing money in a business opportunity or franchise offer, the BBB recommends
that you investigate the offer carefully.
- Research the business. Determine your
skills and needs, and the viability of the business within your market.
Consider the possibility that the market may already be saturated.
- Contact your State Attorney General's
office to verify that the business is registered.
- Contact trade groups related to the
specific industry.
- Have your attorney review any
contracts before signing them.
- Obtain a copy of the company's
disclosure/revelation document before agreeing to anything. The Federal
Trade Commission (FTC) requires this information; the document should
state the concessions and opportunities in detail. If the company says
they are exempt from this rule, contact the FTC to verify.
When
discussing the opportunity with the seller, ask about:
- Value and appeal of the product or
service.
- Financial health and history of the
company and its officer, including litigation history.
- Costs and refund policies. REMEMBER
TO REQUEST EVERYTHING IN WRITING.
- Names, directions, and telephone
numbers of other people who have bought the concession or the opportunity.
- Types of training and field support
available.
- Sites and selection of territories,
if applicable.
- Substantiation of earning potential,
with projections of income backed up by specific experiences of other
buyers.
Be leery of
any offer that:
- Makes outrageous and unsubstantiated
earnings claims that sound too good to be true.
- Is made in a newspaper advertisement,
directing you to call an 800 number, resulting in high-pressure
telemarketing sales pitches.
- Requests payment by overnight express
mail.
- Promises "easy sale" of the
products or services.
- Promises exclusive territories and
good locations for machines and display racks or the assistance of
professional locators.
- Fails to provide disclosure documents
containing financial statements, company history, and substantiation of
earnings claims.
- Fails to provide fee and refund
policies. Do not take refund policies at face value. Some fraudulent
offers advertise phony refund policies touting 100% money back guarantees,
then close shop with no intentions of honoring them.
For more
information, contact:
Better
Business Bureau
(800) 828-5000
www.bbb.org
NYS Attorney
General
(800) 771-7755
www.oag.state.ny.us
Federal Trade
Commission
(888) 567-8688
www.ftc.gov
Postal
Inspection Service
495 Summer St. Ste 600
Boston, MA 02210
(617) 556-4400
www.usps.com
Consumer
Protection Board of New York
5 Empire State Plaza
Ste 2101
Albany, NY 12223
(518) 474-8583
www.consumer.state.ny.us
This report is
general in nature and is not intended as a reliability report on any company,
service or product