Bogus Investor and Consumer Complaints and Consumer Misrepresentation
Like most regulatory bodies in the United States, the Federal Trade Commission gets investor and consumer complaints. But how much of these are actually real? These agencies then act on such complaints and increase regulations. Let's look at the Franchising industry for example. The complaints of fraud are non-existent for the most part in franchising, yet the FTC franchise group is dead set on making more regulations which in turn stifle the industry.
I recently talked to an NASD regulator who said that 75% of the complaints filed were frivolous, bogus or someone not wanting to take responsibility for their actions. Wow, 75%, that is high wouldn't you say? Is the FTC acting upon real complaints to come up with these new proposed rules? Or are the complaints you base your needs to make the rule simply 75% bogus. Are they 80% bogus, 85% or maybe only 70%. If the problem is really only 30% real or 15% real, then is that a significant reason for making a rule? No, obviously it is not. You are letting bogus complaints get the best of you at the FTC, just like you are wanting bogus inquires to get the best of franchisors. The real crime against the consumer will be the switch in attitude towards consumers by franchisors one, which will be based on reality and therefore justified if new franchise rules are imposed. Franchisor's are protecting themselves from bogus leads or fake franchise buyers. They therefore have put up a wall to protect them selves, it is called the screening process. It is justified and in place for a reason, to protect the integrity of their systems and the current franchisees (also consumers) who have already purchased and would like to make some money in this recession. The franchisees if this rule is enacted should be able to opt out of being listed on the UFOC for reasons of their right to privacy.
We cannot and should not make the UFOC available until which time we can verify all information given to us by the potential buyer. Remember I stated that 70% of all buyers exaggerate their financial situation. This is well known by franchisors as well as other sectors of our economy such as realtors, car dealerships and financial planners. One recent book I read put out by a major mutual fund company stated the number at 78%. Is it out right misrepresentation or is it more not understanding the reality of the banking system, cost of living, cash flow, or debt service on their own credit cards? Hard to say, but I guarantee you it is real. And it is a real problem with assisting new franchise team members in realizing their American Dream of owning their own business. These are some of the problems associated with franchisees and their financial capacity.
Other problems occur when potential franchise buyers do not fill out the entire form and leave sections out. A person who cannot follow the rules cannot join our team and most franchisors should ask very direct questions of the franchise buyer before moving on if this occurs. Sometimes it is simply a matter of the franchise buyer being scared of identity theft due to all the TV news segments on the subject even the FTC goes over board with these claims of possible "identity theft" to justify their worthiness to consumers and next years budget. Other times the potential franchise buyers are really hiding something. Sometimes franchise buyers will not tell you they are going through a divorce and they are buying the franchise to be self-employed to hide income from their former mate to save on alimony. We have received several of these from people who admit it, wonder how many did not tell us their objectives in owning their own business? We have even had franchise buyers lie about their hobbies. Why would they do that? Are they so worried of what others think of them? Unfortunately, yes. People will drive expensive cars when they are broke and it appears that this problem permeates our society, we know that we wash their cars, until which time they refuse to make good on the bounced checks. People, real people, real Americans and even the all mighty and glorious consumers lie about stupid things and in franchising you cannot help or suggest things to a franchisee team member who lies and still give good advice. Franchisors need franchisees to do well, and we owe it to the rest of the franchise team to only take on the best franchisees and that takes quite a bit of due diligence on our part. Until that process is complete we cannot offer the franchise to the potential franchise buyer.
Our franchise system like many others only offers our franchises to qualified franchise buyers. We do not offer our franchise to just anyone who has the money and surely not to anyone who does not. Just like an employer must screen applicants, so must a franchisor. And while I am at it, may I ask the FTC what a consumer who cannot balance their check book and doesn't even read their credit card statements for accuracy is going to do with a UFOC and it's attachments, for a franchise they are not even sure if they are interested in yet? Are they going to read it? All of it? And if they think they may possibly be interested in 10 different franchises are they going to read all ten? Are they going to read five, two, one? Probably none. This proposed rule helps, neither the consumer, purported consumer, the franchisor or it's current franchisees. And it will add inbound complaints to the FTC, which I will later discuss.
"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
Speed Kills on the Web!
I only have to point to the 555 plus failed .com companies (according to Web Mergers) as the poster children of the "speed at any cost" business mantra that clearly doesn't work. And these were companies who burnt through significant amounts of capital (in the millions, tens of millions or hundreds of millions in many cases) while they were rushing to get to market.
Truck Wash Business Case Study
Often smart entrepreneurs look for out of the way businesses, things out of the mainstream but businesses, which have a good customer base and steady incomes. This is an extremely interesting story. I had always considered the mobile truck washing efforts to be very profitable and believed that fixed truck washes were a big waste of money. That was until one year when a new franchisee joined our team from Oklahoma City. I run a franchise company called the Car Wash Guys; www.carwashguys.com. Turns out the franchisee was formerly employed by Blue Beacon Truck Washes the largest chain of truck washes in the US. They do about $138,000,000 per year with 80 truck washes and the company is very closely held. Tim our franchisee was a truck manager for them and before buying into our franchise and started washing cars in OKC even though he knows truck washing best. He had a two-year non-compete with his old company, which we have honored in OKC. He has tons of experience and had indicated to me that the business is sound and we should really get into it. Later that year I sold a franchise to a person in WA State who owned car washes (5) and he made a deal with a truck stop on an Indian Reservation, he never started the plan, but the numbers we ran on the spreadsheet looked great and very profitable.
City Wide Garage Sales: Hidden Riches!
Most of us remember going to at least one garage sale in our lives. It may have been called a yard sale, garage sale or flea market. The name didn't matter it was all the same. Other people selling what they thought was trash to people who thought the items were treasures.
The Skills Gap: It Pays to Use Experts
By outsourcing to skilled professionals you'll be able to grow your business without adding overhead.
How to Make Your Business Image Stand Out Above The Crowd
Traditional advertising methods are still being used foralmost 90% of businesses today. The number one problem withthis, is that all everyone else seems to be following thesame old methods.
How to Profit from Business Consulting Opportunities
Business consulting opportunities might be just what your are looking for in a home based business.
Small Business Marketing, According to Seinfeld
What could Seinfeld possibly have to do with marketing a small business? As it turns out, all small business owners could take a few lessons from the show that brought us such popular phrases as "Man Hands" and "master of your domain".
Profits are within 6 Degrees of Freedom
How far away is the person you need to meet?
The Triple A Way to Spark Your Companys Profits
Winning small and home based businesses today must continually shake things up to stay in the game. Whether it's adding new marketing twists on existing products and services or anticipating customer wants with compatible new items you can add to your product mix, hatching new ideas and concepts is vital to a profitable company.
Uncover Free Veins Of Gold By Prospecting Online Guru Newsletters (Part 1 of 2)
Incredible as it sounds, you have a goldmine of free business advice and resources available to you for starting an online business. Many entrepreneurs are taking advantage of the unbelievable opportunity of financial independence by starting an Internet business.
Do You Want Your Own Fully Programmable ERP? - Part 3
Continuing from the second article:
Buying a Franchise
Buying a franchise is not for everyone. This guide will help you evaluate whether buying a franchise is right for you. It will help you understand your obligations as a franchise owner. Many people dream of owning and running their own business but are often let down by the reality of doing so.
Does Your Company Have a Business Image Manual
Every business regardless of size needs a "Business Image Manual" to protect their band. Even the smallest companies with only a few employees is well served when there is a business image manual in place. For 15 years I ran a small business, which I eventually franchised and later expanded to 23-states and 4 countries. What I had learned after franchising is that; I should have written my image manual 10-years prior. At first my business was just me alone; like most small businesses, but then due to my hard work and customer service, I had to expand to meet demand. Each time I added people to the team, I seemed to be rehashing over and over again my theories on business image. Often I would have to harp on the issue with part time employees or even summer help. What I needed was a manual. However, being a head strong entrepreneur in those days, I like many entrepreneurs of small businesses said; "What do I need a bunch of manuals or even a business plan for that matter?" After all most of us know our businesses very well and we do not have to write it down. We just know thru intuition what will work and why and surprisingly we end up making few mistakes, but when we do they are usually quite large and costly lessons.
Site Selection - Slice of Life, A Car Wash and Detail Center DownTown
There is a continual trend we are seeing which I can remember participating in over a decade ago, when cities were trying to figure out how to increase sales tax revenues when the large box stores outside of town came into nearby or surrounding areas. For instance a big and easy example would be Wal-Mart. Sam was smart and built his stores just outside of town near towns, which drew from neighboring towns of 5,000 or more from three to five directions. If you look at an over lay of Wal-Mart stores to an atlas of that state you will see the rural America can get anything they need at the best price without driving all that far.
Everything I Need to Know About Business I Learned From My Nametag
So there I was ? sitting in the audience of an on-campus seminar. Surrounding me sat hundreds of fellow students; each of us wearing one of those little, handwritten, adhesive nametags. When the event was over, we all filed toward the exit. I approached the door and noticed a small trashcan filled to the brim with ripped up, used nametags.
Breaking The Chains!
Everyday, customers and business owners are bombarded with billboards, logos, print and electronic ads from huge corporations. With annual ad budgets that are more than our businesses' SALES in an entire year, our small independent businesses are getting squeezed out of consumers minds (and wallets) more and more each year. But the good news is, there are ways to fight back and "break the chains":
Starting Your Small Business
Where do you find more customers?
Increase Sales in Your Home Business With These 10 Simple Ideas
Every home business has the same problem of how to increase sales without a hugely expensive marketing campaign. By utilising the following simple ideas you will be able to do just that.
How to Start a Pet Transportation Business
Pet Transportation Services are needed as the number of pets in the U.S. has grown tremendously over the past few decades. According to the U.S. Pet ownership and Demographics sourcebook, there are an estimated 60 million dogs and 70 million cats in American homes today. Apart from that, households which own pets have been recorded to spend 36% more in 2001 as compared to 1996. With this, owning a business that caters to the pet market, including a pet transportation service has lots of potential for healthy growth.
How to Create an Employee Manual
Large corporations use employee manuals to both educate employees about policies and protect themselves legally. Whether or not you need an employee manual is your decision, though it can be a great tool for keeping your policies consistent.
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