Skip to main content
Image
Report Fraud

 

 

 

For someone who wanted to run their own business, it seemed like a great opportunity — buy your own burger franchise and get training and support to help you succeed. And if you’re a veteran, you even get a discount. But for people who paid for a Burgerim franchise, the promises of support and refunds didn’t turn out to be true, the FTC says

According to a lawsuit filed on the FTC’s behalf by the Department of Justice, Burgerim and its owner promoted their franchises as “a business in a box” and said the company would support people as they established the franchise, including securing loans, locations, and licenses needed to run the business. In many cases, Burgerim also promised franchisees it would refund the franchise fee if the franchise was unable to open. 

But in many cases, franchisees couldn’t secure financing or locations for their restaurants and didn’t get promised refunds, the FTC says. Buyers also didn’t get all the information they were entitled to under the Franchise Rule, which is designed to make sure that people thinking about buying a franchise have the information they need to weigh the risks and benefits of their potential investment. The FTC says Burgerim made tens of millions from franchise sales, but most franchises that were sold never opened, and some franchisees lost tens of thousands of dollars.

If you’re trying to decide whether a franchise is right for you, start with this guidance for franchisees from today’s Business Blog post. Then read our guide, A Consumer’s Guide to Buying a Franchise. It includes key questions to ask before you invest, and also explains how to use the Franchise Disclosure Document — a document franchisors have to give you so you can investigate and evaluate a franchise opportunity.

Already have an issue or concern about a franchise? The FTC wants to hear from you. Visit ReportFraud.ftc.gov and select the option for reporting issues with franchise opportunities. Or, use this specially created link. It takes you directly to a form created specifically to collect information related to franchises.

It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.

The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.

  • We won’t post off-topic comments, repeated identical comments, or comments that include sales pitches or promotions.
  • We won’t post comments that include vulgar messages, personal attacks by name, or offensive terms that target specific people or groups.
  • We won’t post threats, defamatory statements, or suggestions or encouragement of illegal activity.
  • We won’t post comments that include personal information, like Social Security numbers, account numbers, home addresses, and email addresses. To file a detailed report about a scam, go to ReportFraud.ftc.gov.

We don't edit comments to remove objectionable content, so please ensure that your comment contains none of the above. The comments posted on this blog become part of the public domain. To protect your privacy and the privacy of other people, please do not include personal information. Opinions in comments that appear in this blog belong to the individuals who expressed them. They do not belong to or represent views of the Federal Trade Commission.