Hi there,

You need to be careful as you search the internet for the franchise of your dreams. Let me be more specific.

You need to watch out for casual franchise "earnings claims."

I'm talking about the ones you see LinkedIn, Twitter, or Facebook.

As a matter of fact, yesterday I saw a post on LinkedIn in that stated the following:

I know it's blurry, so here's the text:

Chiropractors can make almost $1 million in revenue with this business.

The Joint is a pretty widespread chiropractic office franchise.

On average, it costs about $215k-$417k to open with some locations doing almost $950k in sales.

And their profit margins sit somewhere around 20% on average.

Would you ever consider getting into the chiropractic space?

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So what's wrong with that, Joel? I'll tell you.

If you're someone looking for a franchise, and you see "can make almost $1 million in revenue," you'd probably be interested in it. Even if you don't know anything about the chiropractic space. But it's a good teaser, right?

Now let's say you are someone looking into a franchise in the health space.

And you see $1 million in a post about a health-related franchise.

Would you want to know more?

You bet! But wait.

What if you end up buying a "The Joint" chiropractic franchise, and you don't make "almost $1 million in revenue?" Like you only make $450k in revenue (not profit) instead. I bet you'd be mad. I know I would be.

Because you/I read somewhere that you could make that much money.

Which is exactly my point.

Because making a claim like that on a LinkedIn post could be construed as an earnings claim.

Note: In my usual "Joel" way, I left a comment on the post. Specifically, I wrote the following:

"Is that an earnings claim?"

The franchise broker who posted the $1 million stuff you saw above got mad.

So mad, he changed the post, so it didn't "look" like he was making an earnings claim. And then, in a comment, he called me "A hater who is just seeking attention."

Whatever. Hey...at least he changed the wording. I wonder why? Hmmmm...

Now I'm not a lawyer. But I would never post something like that. Especially if it didn't contain a proper disclosure like the FTC wants to see. My point?

The only three places to get information about average revenue and profit are:

1. Franchise headquarters
2. The FDD
3. Franchisees

Not from posts on LinkedIn or elsewhere.

So be careful.

Don't get sucked in.

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The Franchise King®

Joel Libava

216-831-2610

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