What You Can Learn From a Franchise Scam Victim
Franchise fraud is a rampant problem. Read how one man lost everything so you can avoid the same fate.
Juan came to me in a near panic, practically begging me to help him with his failing business. He was working over 90 hours per week; he was receiving excellent performance feedback from his customers; the company providing his sales leads kept sending more business his way; yet the business was broke. He had to borrow against his home just to cover basic living expenses. I sat down with Juan and began what turned out to be a year-long ordeal that didn’t have a happy ending.
Like hundreds of other victims, Juan had fallen prey to a franchising scam operating in Northern New Jersey. The franchisor targeted immigrants promising an easier and more profitable life through ownership of a commercial janitorial franchise. For tens of thousands of dollars in fees, the company promised to train franchisees, provide them with supplies and professional services and, most importantly, secure a continuous stream of clients. The franchisor also promised to handle billing and collections so the budding entrepreneurs would only need to focus on doing the work and keeping the profits. For an immigrant like Juan, who had managed to buy a home and amass a decent level of savings through hard work and frugal living, it sounded like a dream.
