“Are these projections reliable?”

DEAR FRANBEST: I read in the company’s UFOC [Uniform Franchise Offering Circular disclosure document] under ITEM 19 that the company provides no information or representations of potential revenues or profits. However, the marketing packet they sent me contains a page entitled “Monthly Revenue Analysis” that shows that I can make from $21,150 to $35,250 revenue per month, with a monthly cost of $9,000. The salesman verified these numbers in an email. What do you think? Confused.

Dear Confused: I think you should grab your checkbook and run. The only way a franchisor can legally provide revenue or profit claims or projections of any kind is by using a prescribed formula in ITEM 19 of the UFOC. This franchisor is either knowingly or unknowingly providing illegal earnings claims. They are either dishonest, ignorant or both. SK


‘Zor not cutting D’Mustard?

A lawsuit spells trouble for the budding dog-n-burger franchisor D’Mustard. They’re in the doghouse with unhappy franchisees, who accuse them of fraud and failure to deliver services.

To ketchup on the latest, click here.

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