Detecting Dishonest Franchisers

• Claims that the contract is “standard; no need to read it.”


• Failure to provide a copy of the required disclosure documents.


• Marginally successful prototype or no prototype.


• Poorly prepared operations manual.


• Promises of future earnings with no documentation.


• High franchisee turnover or termination rate.


• Unusual amount of litigation by franchisees.


• Attempts to discourage your attorney from evaluating the contract before signing it.


• No written documentation.


• A high pressure sale.


• Claims to be exempt from federal disclosure laws.


• “Get rich quick” schemes, promising huge profits with minimal effort.


• Reluctance to provide a list of existing franchisees.


• Evasive, vague answers to your questions.