No Financial Disclosures – The Excuse
March 27th, 2008 | 
Author: From the Franchise Pundit:
I can’t count how many times I’ve heard directly from franchisors that they choose not to disclose financial results or franchisees because they are prohibited by law. That is an outright lie, and at the very best, extraordinarily misleading. The FTC wants to encourage franchisors to provide as much financial guidance as possible, but that guidance must be delivered in a consistent and regulated manner so as not to mislead the potential franchisee.
On Michael Webster’s BizOp blog, he looks at Romp ‘n Rolls bogus claim that they do not provide the financial results of their franchisees because FTC prohibits it.
And then from the BizOp blog we get this:
The FTC does not prohibit making earnings claims, or financial performance claims.
What the FTC does prohibit is stupid franchisors telling dumber franchisees that they have a “calculator” which will allow you to put together a pro forma if the basis for that calculator is not disclosed in the UFOC!
Run away from any franchise or business opportunity which tells you that the FTC made them lie to you.
This is definitely worth reading for this looking to deal with a franchise or are currently doing so. Yes indeed, long live the franchise…
Other Articles of Interest:
- Hello FDD! Goodbye UFOC…
- All the meal prep deals are trash
- 15 franchisees sue Snohomish-based Dream Dinners
- Big Brother is Watching
- Checklist — Assessing the franchisor
- Franchise Performance
- Another Fifteen Franchisees Sue Dream Dinners Attorneys
- The 3 worst money moves you can make
- Meat Costs, Consumer Worries to Pinch Wendy’s
- Burger King 2nd-quarter profit rises 29 percent
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