Educational Consumer Tips

Business Opportunities & Franchises

Author: Better Business Bureau

The following is BBB general information and is not intended as a report on any specific company.

Before investing money in a business opportunity or franchise offer, the BBB recommends that you investigate the offer carefully. 

*Research the business. Determine your skills and needs, and the viability of the business within your market. Consider the possibility that the market may already be saturated. 

*Contact your State Attorney General's office to verify that the business is registered. 

*Contact trade groups related to the specific industry. 

*Have your attorney review any contracts before signing them. 

*Obtain a copy of the company's disclosure/revelation document before agreeing to anything. The Federal Trade Commission (FTC) requires that the document must state the concessions and opportunities in detail. If the company says they are exempt from this rule, contact the FTC to verify. 

When discussing the opportunity with the seller, ask about: 

*Value and appeal of the product or service. 
*Financial health and history of the company and its officer, including litigation history. 
*Names, directions, and telephone numbers of other people who have bought the concession or the opportunity. 
*Types of training and field support available. 
*Sites and selection of territories, if applicable. 
*Substantiation of earning potential, with projections of income backed up by specific experiences of other buyers. 

Be leery of any offer that: 
*Makes outrageous and unsubstantiated earnings claims that sound too good to be true. 
*Is made in a newspaper advertisement, directing you to call an 800 number, resulting in high-pressure telemarketing sales pitches. 
*Requests payment by overnight express mail. 
*Promises "easy sale" of the products or services. 
*Promises exclusive territories and good locations for machines and display racks or the assistance of professional locators. 
*Fails to provide disclosure documents containing financial statements, company history, and substantiation of earnings claims. 
*Fails to provide fee and refund policies. Do not take refund policies at face value. Some fraudulent offers advertise phony refund policies touting 100% money back guarantees, then close shop with no intentions of honoring them. 

For more information, contact

Better Business Bureau 
(800) 828-5000 

NYS Attorney General 
(800) 771-7755 

Federal Trade Commission 
(888) 567-8688 

Postal Inspection Service 
495 Summer St. Ste 600 
Boston, MA 02210 
(617) 556-4400 

Consumer Protection Board of New York 
5 Empire State Plaza Ste 2101 
Albany, NY 12223 
(518) 474-8583 

This report is general in nature and is not intended as a Business Review on any company, service or product.