Three Common Franchise Myths
A myth is an invented story, idea or concept. Sometimes myths are used to support and justify particular ideas, institutions, and traditions. In two recent columns I’ve identified and discussed three pervasive franchise myths, including:
“If you buy this franchise, you’ll be our partner.”
“If you buy this franchise, you’ll be rich.”
“If you buy this franchise, you’ll benefit from our experience and expertise in successfully operating franchises.”
As I previously noted, the first two myths are existentially mysterious in that, one would have thought that, over the course of history, as these myths were passed from one generation to the next, they would have been exposed and debunked. They have not been.
And, with regard to the latter myth, incredibly, legal standards have evolved that allow and incentivize franchisors to perpetuate it. In essence, courts have refused to recognize a claim for franchisor malpractice. In this regard, given the force and nature of the “economic loss rule”, it is not likely that this myth will be discredited in the near future.
Given the longevity and vitality of these myths, it is not surprising to learn that they cause incredible damage to franchisees, sometimes entirely destroying franchisees’ families, savings, and futures. If you believe that you’ve fallen for one or more of these myths, time is not in your favor. You should promptly seek the advice of an experienced franchisee lawyer who will be able to accurately devise a legal strategy to protect you and your investment.