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Protecting Yourself from Franchise Fraud

Book Information: 

If you believe in trusting your gut when choosing a franchise and that financial success is a matter of just working hard enough, then this updated franchise classic is not for you.

Where other books, if they are honest, might warn a franchise buyer to beware, this book, more than any other, gets specific on what to watch out for. Robert Purvin, Jr. argues that franchisors and their well-paid attorneys have designed some pretty complex and clever traps for franchise owners.

Purvin also discusses some of the whoppers that sellers put out there in order to obtain your hundreds of thousands of investment dollars. Imagine that!

One myth is that the government will not allow franchise firms to disclose what their average store makes in profits. Another tall tale is that the Department of Commerce has conducted a survey that found 95% of franchises to be successful, so buying a franchise, such as the franchise you are looking at, is a proven concept. Warning: not only are such numbers bogus, but the logic is flawed as well.

Some 16 years ago, Purvin founded and is currently chairman of, the American Association of Franchisees and Dealers, an organization representing some 50,000 franchised businesses in more than 100 different franchise chains. He has been on a quest to find equitable franchise relationships.

The Franchise Fraud provides guidelines to find fraud and to discover the fairest and best franchising opportunities available. Purvin, uniquely qualified for such revelations by his years of working with aggrieved franchise owners, gives eight rules to help buyers find quality franchises.

"My book is an exposé of the franchising community, but more importantly I am now able to point investors towards a path of successful franchising, and to provide a prescription to assure that franchising works as advertised," says Purvin.

The author observes that franchise owners tend to put their nose to the grindstone while ignoring an important negative; namely, a legal deck of cards that is increasingly stacked against them. His book is full of stories of how lopsided franchise agreements deal franchise owners great loss and heartache.

But Purvin observes that franchise regulation is not the answer for franchise owners to receive fairness. He argues that regulation actually ends up being subverted by franchisors and their army of lawyers so that the laws end up protecting franchisors instead. The marketplace via independent franchisee associations is the best form of protection. Although it is growing, franchisee interest over the years in paying as little as $5 - $10 per month in dues is still very low.

Purvin pleads with franchise owners to band together to protect their rights and to keep their franchisor honest and fair.

The Franchise Fraud receives my highest book ranking. This is THE book that has the courage and insights to tell it like it is. That's rare in our industry. It should be read by every potential investor for guidance and for awareness of the pitfalls.prior to buying a franchise.

Don Sniegowski
Publisher and Editor
Blue MauMau, Inc.

Related news:

Podcast (28 minutes). Listen to an Interview with Bob Purvin, Chair of the American Association of Franchisees and Dealers, on Protecting Yourself Against Franchise Fraud 

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3 Comments

Barbara Jorgensen's picture

I wish I read this book before we signed on the dotted line

I believe we would of done things differently.  I will read it again.  A must read for those looking to go the franchising route. 

Mufflerman's picture

Quintessential book exposing the risks....

Mr. Purvin's book is an outstanding review of the history of franchising and the current state of the franchisor/franchisee relationship.  It is a must read for anyone involved in the business of franchising, particularly those who are considering investment in a franchise system.

orderd it a few weeks ago

As one of many failed franchisee's Ive been on a quest for info - I should have done this at the beginning, anyway I have ordered this book and am really excited about it, I will give my review after I read it at least twice....

About Don Sniegowski

Don Sniegowski's picture

Public Profile

Don Sniegowski is editor of Blue MauMau, the daily news journal for franchise & small business owners. Call him at +1 (270) 321-1268, tweet @bluemaumau or email don@bluemaumau.org.