How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Dwayne B. Your Own Question
Dwayne B.
Dwayne B., Attorney
Category: Business Law
Satisfied Customers: 33436
Experience:  Practicing for over 20 years and helped a number of businesses with litigation.
Type Your Business Law Question Here...
Dwayne B. is online now
A new question is answered every 9 seconds

How can you tell if a franchise opportunity is legitimate or

Customer Question

How can you tell if a franchise opportunity is legitimate or a scam?
Submitted: 4 years ago.
Category: Business Law
Expert:  Dwayne B. replied 4 years ago.
Can you provide a few facts to put this into context?
Customer: replied 4 years ago.

We are considering 2 franchise offers from the website Franchise Direct. One is called Community eStores. It involves helping non-profit organizations fundraise. This requires a buy-in of $8K. The other is Background Screeners of America which provides background checks for business. This one requires a buy-in of $20K. I have not had much success with Google searches. I just want to know how to tell if this is a scam or a real opportunity.

Expert:  Dwayne B. replied 4 years ago.
There are no sure fire ways to know whether it is legit or not if the companies are relatively small. There are a lot of danger signs to watch for. If they don't have a physical address then it is probably not legit. Also, if they are selling a "franchise" that is easily duplicated just by virtue of paying them a fee then it is suspect.

You can also check with both the BBB and you can get a lot of information there. Unfortunately, many scam sites sell a few things, make their money, and then change names so it's hard to check on them.

Be careful of the companies on Franchise Direct. I have seen reports which indicate people are being ripped off by companies on their site. I don't know if that was just bad luck, they don't have a screening process, etc. but there are some issues.

I ran some searches on those particular companies and didn't see anything in particular. However, the issue that I see is there are no protected territories, etc. and so you could be competing against a lot of people doing the same thing soon.

Please ask any follow up questions in this thread. When all of your questions have been answered, then I would ask that you give a Positive Rating since that is the only way I get credit for my work. However, please do not issue a rating of any kind until all of your questions have been answered and please use the Reply button to ask additional questions or to provide answers to my questions.
Customer: replied 4 years ago.

Thank you very much for your excellent advice. Have a great New Year!

Expert:  Dwayne B. replied 4 years ago.
Best wishes to you. Let me know how it turns out.

Also, please don't forget to leave a positive rating (of course, I'd suggest Excellent) so that I get credit for my work.