Brad Sugars & the Stealth Earnings Claim

Let’s say you want to get people interested in your franchise opportunity by telling them they’ll have revenue of $150,000 by their second year.

But there’s one problem: the pesky little busybodies at the Federal Trade Commission (FTC) insist that you can’t give financial performance claims except in the designated section (Item 19) of the Franchise Disclosure Document (FDD) you give prospective franchisees.

And if you do that, you need to provide substantiation of the claims you make.

And where is the FUN in that?!

Don’t despair, cloud merchants and dream sellers!  Take a deep breath and learn from the masters…

One thing you could do is post the financial performance claim on your blog in the form of a question.  Here’s an example from ActionCOACH CEO Brad Sugars blog AskBradSugars.com:

In this case, it appears that the questions came in from a Mary Decker (possibly the runner who was banned from the Olympics and lost her silver medal due to doping.  If so, nice touch).

By posting the question, the expectation of $150K by year 2 is put out there in circulation – but in the form of an innocent question from a reader, not as a statement from the company or its CEO.

So once you have (or Mary has) effectively floated the numbers out there, simply answer that you can’t answer that question.  And then end with a call-to-action that will hopefully turn inquiring minds into active leads:

Cool, huh?

Well… not really.  Even if the inquiry from “Mary Decker” is legit, Mr. Sugars is posting financial performance claims within a franchise marketing  site.  I doubt the FTC would approve of advertising that publishes financial performance claims, neither acknowledges or disputes their authenticity, then directs the reader to contact them for the real information.

Now, I’m not saying that Mr. Brad Sugars’ intention in posting this question was anything but honorable (just as my post Did ActionCOACH Hack UnhappyFranchisee.com? does not state they indeed participate in such nefariousness), but sometimes the appearance of impropriety can be quite damaging.

ActionCOACH is a company that preaches to its clients that they should operate “above the line” of business ethics.  While I must acknowledge the clever wordplay and suspected misdirection throughout the AskBradSugars.com blog, I think most franchise prospects would prefer to deal with a company that’s “above the line” rather than one that appears to be expert at blurring – or even erasing – it.

For more discussion of ActionCOACH and Brad Sugars, check out the extensive conversation on the Soulcast ActionCOACH thread.

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graphics:  AskBradSugars.com

Post from: Franchise Pick