The Franchise King®

Franchise Choices/3 Things to Beware of {Part 2}

Yesterday, I brought up something to watch out for, when investing in a franchise of your own.
Here is another thing to be careful of…….

(This post may contain affiliate links. Please read my disclosure policy).


Litigation. Lots of litigation. Here is the definition of litigation:
The process of carrying out a lawsuit; a civil action in which a controversy is brought before the court.
That certainly sounds pleasant. The definition is just a short series of words.The reality of actually being in a courtroom, probably is a little more intense.

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There are 23 items that are required to at least be listed in the franchise company’s Uniform Franchise Offering Circular {UFOC}.
The 23 { Thank you, Franchise 411!}
The 23 with  updates!  {Thank you, Nixon-Peabody LLP}

One of these items has to do with current and past litigation. It could be franchise company initiated, or franchisee initiated. In the past year year or so, a couple of franchise companies have been in the news, because of  large amounts of lawsuits. Sean Kelley discusses the highly publicized Quizno’s lawsuits on his blog, Franchise Pick. Blue Mau Mau reports on Coffee Beanery. The Franchise Pundit discusses  a UPS Store lawsuit.

Bottom line is that in business, lawsuits sometimes happen. Just because Quizno’s, The Coffee Beanery, and The UPS Store are involved in litigation, does not mean that any of the three opportunities could not be right for you. Just make sure you use an attorney familiar with franchise law, when you are getting serious about investing in a opportunity. I always tell my candidates that there should never be a lot of litigation. If there is, see if you can detect a pattern. In most cases, if there is a lot of litigation, the current and past franchisees are aware, and may know the real dirt. Ask them.   

Tomorrow, the 3rd issue to beware of, when investing in a franchise of your own…….   


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joel libava

I'm The Franchise King®, Joel Libava. I help prospective franchise owners avoid bank account emptying mistakes.
For 23 years, I’ve been showing people how to make smart, informed decisions on franchises to buy, and I can help you, too!
P.S. I'm not a franchise consultant/broker.

Joel is Highly Principled
There are many people in the franchise business who claim to to be experts in the field. Unfortunately many of them lack both knowledge and integrity. Joel, however, is without question one of the most qualified and principled people I know, in or out of his industry."
- Greg Reynolds, Retired Outplacement Counselor
"Many receive advice, only the wise profit from it."
- Harper Lee