Finding Out About Complaints Against A Franchise Company

USFranchiseNews:
No federal or state agency or private organization can tell you whether a company is legitimate or operates in good faith. The FTC or the Better Business Bureau can report on whether consumers have complained about a company. But, operators of fly-by-night franchise and business opportunity scams know this, and may change the name and location of their company every few months to avoid a record of consumer complaints

There is no substitute for checking the track record of a franchisor or business opportunity seller by personally talking to at least 10 prior purchasers. That’s why the Franchise Rule requires companies to give consumers a list of the names, addresses and telephone numbers of at least 10 prior purchasers who are geographically closest to you. Interview these prior purchasers about their experiences. Ask questions to verify that they have purchased the franchise or business opportunity and that they are not being paid to provide a favorable review. A scheming promoter of a bogus business opportunity may line up ‘singers’ who provide phony testimonials. Visit their business locations in person.

If you want information about consumer complaints from the FTC, request it in writing. Address your request to:
Freedom of Information Act Request
Federal Trade Commission
Washington, D.C. 20580.

Please identify your letter as a ‘FOIA Request’ and include (1) your name, address and daytime phone number, and (2) the name and address of the company you are asking about. In most cases, the FTC does not charge the public for searching, reviewing documents, or copying. Still, it is a good idea to state the maximum you are willing to pay, so we can contact you in the unusual event that any applicable fees for these services will be higher than your limit.

You can also request information from the Better Business Bureau and look up information about the franchise or business opportunity seller online at: www.bbb.org.