The information provided to franchisee candidates is meant to be read, understood and acted upon.
Some franchise sales processes are designed to run around this information, minimize its import or in some cases to blatantly contradict this information.
Consider this marketing piece put out for Mooyah Burgers.
The advertising clearly states & makes a financial performance claim: 2 to 1 sales/investment ratio.
Now, let's check what the franchisor actually says in their FDD.
Item 19 from Mooyah Burgers 2013 FDD
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchisedand/or franchisor-owned outlets, if there is a reasonable basis for the information, and the information is included in the disclosure document.
Financial performance information that differs from that included in ftem 19 may be given only if:
(1) a franchisor provides the actual records of an existing outlet you are considering buying; or
(2) a franchisor supplements the information provided in this ftem 19, for example, by providing information about performance at a particular location or under particular circumstances.
This franchisor does not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets.
We also do not authorize our employees or representatives to make any such representations either orally or in writing.
If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet.
If you receive any other financial performance information or projections of your future income,
you should report it to the franchisor's management by contacting Michael Mabry or our Franchise Sales Department at:
6100 Preston Road.
5212 Tennvson Parkwav Suite 240.
7503475024 or f2141 872 4313 310-0768.
the Federal Trade Commission, and the appropriate state regulatory agencies.
This is a clear case in which the sales process & the marketing materials are at odds with the 2013 Franchise Disclosure Document. The presentation of this contradictory information likely harms the franchisor's sales process.