D.L. Foster Press

Investment Expert: Franchise Start-ups Offer Benefits But Also Pitfalls

Are Franchise Opportunities Sound Investments in Today's Economy?


Honolulu, HI -- (ReleaseWire) -- 04/19/2010 -- The word franchising conjures up a myriad of sometimes conflicting images. To the average consumer, a franchise may mean a sizzling burger on a sesame seed bun or a cardboard bucket of crispy fried chicken. However, mention the term to a pro football scout, and he'll probably think you mean a "franchise" player who can take a team from the cellar to the Super Bowl. A politician might think of the right to vote in a public election; an attorney, a lengthy contract; and an accountant, a royalty obligation. However, to a government regulator, franchising might be a red flag for investor fraud.

"From a cultural perspective, the franchise phenomenon is both a driving force and a reflection of public tastes in food, fashion, and personal services," according to Dennis Foster, author of Franchising: The Inside Story. "In some way or another, franchising has managed to make its way into almost every corner of the earth. From Bangor, Maine to Bangkok, Thailand, franchising has captured the public imagination and, in doing so, recruited to its ranks hundreds of thousands of believing entrepreneurs."

Foster, who has over thirty years experience as a franchise developer and consultant, is one of America's most knowledgeable authorities on franchising. "Franchising is often referred to as a dual-edged sword," he advises. "At its best, it is free enterprise's finest hour, a time for transforming simple ideas and bold ambitions into fulfilled dreams of personal enrichment and financial independence. At its worst, it can be 'vulture capitalism' run amok, in which every conceivable type of quick-buck scam and pyramid sales scheme is foisted on an unsuspecting public. The difference is often less visible than the writing on an oral contract."

Foster, who is the author of over 60 published books, wrote Franchising: The Inside Story to help investors sort out the facts about franchising in the current economy and to distinguish the signposts of success from the danger signals of fraud or failure. It begins with a broad self-evaluation of the reader's mental, physical, and financial preparedness for franchising and concludes with a systematic procedure for evaluating a franchise opportunity. Each chapter includes a set of self-tests, checklists, or work sheets to help investors organize their search for the ideal franchise.

Foster's book examines just what franchisors can and can't do to influence a prospective franchisee to sign an agreement. It also takes an in-depth look at how to research opportunities and negotiate a franchise agreement. Readers will learn about the psychological strategies that franchisors use to sell their franchises, and then find out how to turn the tables to their own advantage.

The author explores the Uniform Franchise Offering Circular (UFOC), translating it into plain English, and dissects a franchise agreement to see how it affects the rights of the owner. He also examines the contents of a typical franchise operating manual and shows how this important tool both guides and governs the day-to-day operation of a franchise outlet. Readers also learn how to plan, finance, and organize a business, including things a franchisor may not mention in franchise training school. Finally, Foster examines the critical factors that influence a decision to buy a franchise and ultimately determine the likelihood of success.

Dennis L. Foster is also the author of The Complete Franchise Book (Random House), The Rating Guide to Franchises (Facts on File), The Encyclopedia of Franchises and Franchising (Facts on File), and Franchising for Free (Wiley and Sons).

Franchising: The Inside Story by Dennis L. Foster can be purchased on Amazon.com.