Businessman Calculating Business Earning from Franchise


Bundy & Fichter PLLC April 24, 2023

The Federal Trade Commission has debunked five common franchise myths. The franchise lawyers at Bundy & Fichter PLLC are pleased that the FTC is engaging in public education in this important area. Although the five myths described by the FTC are not the only myths circulating about franchising, they are an important start.

As in a lot of business methods where making money is a common goal, myths about how great the business method is or how it virtually guarantees the investors’ success seem to abound. The net effect of such myths being perpetuated is to harm both franchisors and franchisees.

Franchisors often wind up with franchisees who invested based on myth-fed misunderstandings of what they were signing on to. That results in unhappy and unsuccessful franchisees. Unhappy and unsuccessful franchisees result in more difficulty in selling franchises—and could result in litigation and other distractions. Sometimes franchisors become franchisors for all the same wrong reasons, in reliance on myths, and awaken to problems they never understood they would experience.

Meanwhile franchisees who buy into the myths often are unhappy and ultimately fail, accomplishing nothing but hurting (or breaking up) their families and paying fees to their local bankruptcy lawyers after losing their entire nest-egg and, often, their homes.

It is far better for both franchisors and franchisees that both have a clear understanding of the business method they are signing on to. With more than fifty years of combined experience in representing franchisees and franchisors, the attorneys at Bundy & Fichter PLLC in Seattle, Washington, welcome the FTC to the conversation and commend both franchisors and franchisees to read and understand what the FTC has said. The franchise attorneys at Bundy & Fichter PLLC regularly consult with both prospective franchisees and prospective franchisors to help them make good decisions as to whether franchising is good for them. The FTC Blog is available at the following link: Franchise Fundamentals: Debunking five myths about buying a franchise | Federal Trade Commission (ftc.gov).