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Scam watch: don’t fall foul of fake selling schemes

Scam watch: don’t fall foul of fake selling schemes

Be cautious of unscrupulous schemes posing as business format franchises

When it comes to being your own boss, there’s no doubt business format franchising should be in your thought process.

For many years, the risk associated with achieving success running a franchise business has been significantly lower than that of starting an independent entity because of the following elements:

• The proven business model, which has been tried and tested, with all the mistakes already made and fixed, is yours to build on.
• Training and support is plentiful - from initial onboarding and throughout your entire business journey.
• A franchisee is able to focus on growing their business, while the franchisor continues to invest in research and development.
• Favourable lending options are available due to the reduced risk, as banks like franchising.
• You benefit from community know-how - you’re in business for yourself, but not by yourself.
• Development opportunities are available for high performing franchisees, meaning you can choose to accelerate growth if you have the desire and resources to do so.

A franchisee has the rights to sell the franchisor’s goods or services, as well as use the franchisor’s designs, quality control, training and benefit from advertising and promotions, accounting systems and operating procedures.

A franchisee should also have the right to sell their business at the end of their term, subject to the franchisor approving the incoming franchisee.

Pyramid selling

The past 12 months have seen many people searching for alternative ways to derive an income, which has resulted in an upsurge in pyramid selling schemes in the UK.

Unfortunately for our industry, pyramid selling is sometimes described as a form of franchising, which can pose challenges when looking to build relationships with community consultants and educators.

At the British Franchise Association, we’ve come across people who don’t understand the difference between the two.

If you’re looking to start your own business and want the assurance that it’s a viable opportunity and will provide you with a return, plus an asset to sell in the future, you should be searching for a business format franchise that offers the features already outlined.

Word of warning

Franchising is not regulated in the UK. Therefore, the bfa strongly recommends you undertake comprehensive research before making an investment.

Visit thebfa.org, where you’ll find details of our accredited brands. In addition, we offer a free online course if you’d like to learn more about finding the right franchise for you.

As with any investment, it’s important you take the time to find something you’re comfortable with. If you get to the investment stage, ensure you have the franchise agreement reviewed by an independent franchise lawyer. A list is available on the bfa website.

I wish you the best of luck and the bfa looks forward to becoming your trusted partner in franchising in the future.

The author

Emily Price is chief operating officer at the British Franchise Association.

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