In the early 1990s, a franchise company told investors they could operate travel agencies in their own homes. The company promised support from thousands of suppliers of travel services, including airlines. When these investors tried to start their agencies, they got none of what was promised. When checking out a franchise offer, the con artist may give you the names of current franchisees so you can ask about earnings claims, training, and other promises. The FTC has seen innumerable cases where the references are paid shills.
Con artists follow the headlines.
If you want to start your own business, a franchise gives you the opportunity to be in business for yourself but not by yourself. You do, however, have to take responsibility for doing your homework and ensuring that you're investing with a franchise system that is legitimate. All franchisors are required to supply potential franchisees with a disclosure document, called a Franchise Offering Circular, at least ten business days before the investor signs a contract or pays any money. If the franchisor has not offered a disclosure document or isn't aware of the requirement, there's a problem. Be sure the key executives have plenty of experience in franchising.