Sure. Gonna put it in a detail tag because it’s off-topic - if you want to discuss further, I already have a thread about this subject.
Summary
A franchise is an arrangement where the franchisee agrees to perform a capex expenditure on the franchisors behalf - building out a new business location - for the right to capture revenue and, hopefully, profits on that location for a period of time.
If you “buy” just one or two locations and you’re not capitalized to the tunes of millions of dollars, as many do (including the FB guy above), you effectively go into debt (via SBA loans, family loans, etc) and take on a job to manage somebody else’s business for 5, 10 years. At the end of the franchise term, the franchisee has a risk to lose their entire investment if the franchisor decides not to renew (it happens), or if the franchisee wants to sell their successful business, they have to do so at a price the franchisor agrees-to - and many times, the franchisor will scuttle a deal saying the purchaser is paying too much (IT HAPPENS).
You pour your life savings and 5-20 years of your life to build a business in which you own zero, zilch, nada, equity, and you can lose everything due to the whims of those you signed away your rights to.
… hence the “indentured servitude” portion of my comment.
The “Spousal Liability” means two things: 1. The purchaser needed to sign a personal guarantee on the franchise (implied), and 2. Their spouse needed to sign a personal guarantee in case of the primary party’s incapacitation due to death, illness, or bankruptcy. So if he dies, she has to run the business even if she has another job.
So this guy signed into two business leasing arrangements where he has to use his own money to build out two retail locations, hoping he can capture more than $150,000/year per location (because that’s what he would have earned had he just thrown that money into the stock market), he is stuck with this arrangement for the next decade, he voted for Trump and is in complete denial as to what a 5.2% GDP contraction will do to this businesses’ prospects…
… and he got his wife to sign up to this too so she’s just as much on the hook as he is.
Can you tell why I hate these things, especially for middle-class investors?