O ctober 5, 1994 • T he P ortland O bserver
P age C2
OOM EN
Buying A Franchise Business?
Wait Until The First Of The Year
B y P rof . M c K inley B i
rt
That is when the new “Uniform
E ra n e h ise O ffe rin g C ire u la r
(UFOC)" rules take effect on Jan. 1.
1995. This new federal legislation
will force franchisors to reveal pro­
spective franchisees vital informa­
tion on often hidden or obscure fac­
tors of operation.
As one business magazine puts
it, “The new Congress.” which takes
office in January, "may revive a dor­
mant volcano of tough legislation
regarding franchising." These events
involve key issues or frictions that
have affected the relationship be­
tween franchisor and franchisee for
many years: earnings claims and ' dis­
closures’ ("The whole truth and noth-
ing but the truth, so help me ear
wash” ). In other words, the situation
has been somewhat like that of the
consumer, where he is advised, “ca­
veat em ptor” (let the buyer beware!).
But it is the ease that buying a
franchise business is not quite like
buying a toaster or adding machine.
More often than not the enthused and
hopeful franchisee is committing his
entire life savings (or more), and not
to be fully informed is a recipe for
economic disaster In fact, what the
buyer is expecting is that advantage
to be gained from the informed ad­
vice of an operator who is experi­
enced in the business.
A frequent issue is that of "earn­
ings claims” and whether such claims
Tradeswomen
Invited To
e Role Models
The Oregon Tradeswomen N et­
work is helping young women make
informed choices tor their futures,
particularly around their future em ­
ployment.
A discussion ot the Freshman
W o m en 's Forum , a p rogram at
Roosevelt High School, took place
during the monthly meeting of the
association.
Ellen Bussing said the purpose
of the program is to provide experi­
ences for ninth grade women in order
to enhance their ability to make good
choices for their life.
The Business Youth Exchange,
to g e th e r w ith P o rtla n d P u b lic
Schools, designed the program to
provide maximum exposure to adult
women from many backgrounds,
work environments and ethnic cul­
tures.
Students participate in monthly
forum s as well as other special
projects and extra curricular activi­
ties.
The year ends with a celebration
o ff campus attended by both students
and the adult women facilitators. Each
month a different topic is covered in
the forum.
Adult facilitators lead discus-
franchise companies make what fran­
chise buyers allege are deliberately
misleading and fraudulent statements
earnings and about failure rates. An
interesting situation has arise in re­
spect to a clear definition of "fail­
ure” .
Franchisees consider a failure to
be any store that closes, changes
hands or does not make a profit.
Sounds reasonable, doesn’t it? H ow ­
ever, most franchisors consider an
operation a failure only if the opera­
tion closes and never reopens. A
company may simply operate a failed
store until they can unload it on you.
The new UFOC rules, however,
require franchisors to put in a clear
table w hat precisely has happened to
constitute “fraud or puffery.” An earn­
ings claim is any statement by a
franchisor saying that you will make
a certain amount of income or profit
when you purchase that franchise.
Under the Federal Trade C om m is­
sion (FTC) Franchise Rule and many
state’s laws, a franchise company
can make a voluntary claim about the
money you will make, but only if the
claims meet the guidelines in the
“offering circular” (Jan I, 1995).
One should not that a company
is not ‘required’ to make an earnings
claim. It can simply refuse to discuss
how much income and profits you
can make - and simply advise you to
talk to existing and/or former fran­
chisees. The trouble begins when
its franchisees each year. This is ac­
cording to Mr. Stephen W. Maxey, a
Virginia Corporation Com m issioner
who also chairs the committee ot the
North American Security A dm inis­
trators Association that prepared the
new UFOC rules. Several congress
persons, however, believe that there
should be even more stringent legis­
lation.
A Miami attorney who probably
represented more franchisees in more
lawsuits than any other lawyer is
pushing for an extension o f the Fed­
eral Trade Commission laws: “The
rule now governs o n ly ' pre-sale’ dis­
closure, but my concern is the mis­
le a d in g e a rn in g s c la im s th a t
franchisors make after the contract is
signed and before the grand open­
ing.” He is also concerned that earn­
ing claims be consistent with income
you can expect from an actual or
projected market area — a specific
territory: "Be sure they do not use
national or regional averages - or
compare suburbs to Inner-Cities.”
There are several books on the
subject that should be read thor­
oughly before em barking on this type
o f enterprise; The Franchise Hand­
book by A ndrew Sherm an and Fran­
chises: D ollars and Sense by Warren
Lewis. As in any other field, there is
nothing that can substitute for your
willingness to research, question and
investigate every nuance o f the en­
terprise!
ïfëzauty ¿SufifiÚzí
LEUMAL HENTZ, PROPRIETOR
& ( vasLiztu
W e B uy A nd S ell , N ew A nd U sed I tems :
• PA Systems / CDs
• Amplifiers / Cassette Players I Stereos
• Silver / Crystal
• Furniture (Dining Room Tables / Couches)
• Microwaves/ VCRs / Color TVs
• Lamps
• Clothing
• Cars / Motor Cycles / Other Vehicles
5411 N.E. MLK Jr. Blvd
503-335-0271 • Fax 503-335-0272
Portland, Oregon 97211
sions with the young women in small
groups talking about such things as
com m unication styles, workplace
protocol and career exploration.
Facilitator training is provided
each month for the upcoming topic.
It takes no special skills other than
the willingness and the desire to im­
pact a young w om en’s life in a posi­
The Limited Energy Technician JATC announces that they will accept electrical
apprenticeship applications for 10 weekdays starting October 3, 1994, and
tive way.
ending October 14, 1994.
LIMITED ENERGY
APPRENTICESHIP OPENINGS
Three 50 minute sessions are
held, and facilitators are welcome to
be there for one or for all three ses­
sions.
If you are interested in being a
facilitator, call Oregon Tradeswomen
N etw ork’s V olunteer C oordinator
Georgena Moran at 244-6111, ex­
tension 7438 to get information about
the October forum.
T he m eetin g w as sta rte d , as
alw ay s w ith a sta te m e n t hoping
th at the space w as safe fo r all
those p re se n t, re g a rd le ss o f g e n ­
d e r, e th n ic ity , r a c e , r e lig io n ,
sexual o rie n ta tio n , u nion, open-
shop or se lf-e m p lo y e d .
Each person present introduced
themselves and said what trade they
were in. or sought to be in, and talked
about some of the issues on the job.
PHONE: 503-281-2864 // PAGER: 503-948-6892
Liscensed & Bonded
All applications must be made in person at the Metro office from 10:00 A.M-._
4:00 P.M .. at 5600 NE 42nd Avenue, Portland, OR 97218 (corner of NE 42nd &
Killingsworth). Photo identification will be required in order to apply.
*
Minimum program requirements:
1. At least 18 years of age; proof of age may be required.
2. High school graduate with a diploma or GED certificate; qopies must
be submitted to the Metro office.
3. Current math placement test results from Portland Community College.
Results must show a placement level beyond high school level algebra
(Math 70 is the lowest qualifying placement).
UCAS TRAVEL
Planners , INC
CREATIVE FULL SERVICE AGENCY
EXPERIENCED - RELIABLE
PLEASE NOTE: Metro will schedule applicants for the placement
test at the time of application.
GUARANTEED LOWEST RATES
DOMESTIC & 1NT L TRAVEL CRUISES
TOURS, GROUPS, INCENTIVE
& CONVENTION PLANNING
HOTEL • CAR RENTAL • RAIL
CORPORATE HOTEL RATES
FREE TICKET DELIVERY
All supporting documentation must be received in the Metro office by
November 1 1 , 1994,
If accepted into the program, applicants will be required by their employer to take
a substance abuse test.
This is an equal opportunity industry, and minorities and females are encouraged
to apply.
Please contact the Metro office (503) 287-0756 for further information.
Sponsoring organizations are NECA and the IBEW.
■NTERNAT10NAL
■ ^ B ROTHERHOOD of
A D V E R T I S E IN
■
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sy
ORKERS
'Iflortkiiti» (fDh s e r tier
c a ll 5 0 3 - 2 8 8 - 0 0 3 3
691-2666
FAX 692-6563
19355 S.W. Teton, Suite B
Tualatin, OR 97062
The Official Travel Agency o f
the Maurice Lucas Sports Invitational
Certified Minority
Business Enterprise
National Association Of Minority Contractors Of Oregon
^j\\d A B e tte r 70/77
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We Salute
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Minority Development Week o
Q rtb l
4
1969-1994
u Anniversary
MLAMC
Serving Minority Contractors-Offering Quality Contracting
Serving Both Commercial And Residential-Interior And Exterior
Administrators
Action Committee
•
•
•
•
• Procurement - G. McMurtry
• Education/Marketing - J. Posey, O.B. Hill
• Committee for Collective
Economic Empowerment - J. Olive
Memberships - Ed Wilson
Finance/Budget - O.B. Hill
Legislation - J. Posey
Nominating - Executive Committee
4837 NE Martin Luther King Jr. Blvd., Portland, OR 97211
Phone: (503) 281-6099
FAX (503) 284-8017
4