Buyer beware

More and more buyers are seeking franchises from relatively unknown franchisors with little-known brand names and service marks. At the same time, an increasing number of people, particularly those who have not been in business before, are also interested in purchasing small businesses from independent business owners operating in a geographically limited neighborhood area. This scenario usually takes the form of older sellers who purportedly wish to dispose of their business as they reach retirement age. Since spending your savings on a business is one of the most important decisions of your life, if not the most important decision, always heed the classic advice, "Buyer beware."

In the late 1950s and 1960s, all kind of charlatans jumped on the bandwagon and franchised nearly everything imaginable, on a global scale. A buyer didn't always know what he or she was getting into. Typical of our society, help eventually came from legislative enactments that swung the pendulum the other way, at least as far as paperwork is concerned. As a result, franchising today is a much more exacting and time-consuming process because of required procedures and restrictions. But all this activity has resulted in more protection for the franchise buyer.