Wealthy Returns

Captive Audience

Even if the investment is relatively small compared to what it costs to purchase a franchise or start a business from scratch, are these seminars really the way to go? Caffey, who has attended dozens of such meetings, says there's nothing wrong with checking out an interesting opportunity. But, he warns, leave your checkbook, credit cards and cash at home. Use the visit as a fact-finding mission only, and don't believe presenters when they tell you the offer is only good that day.

"It's very important to realize that the people sitting in the audience have enormous power," explains Caffey. "One of the [goals] of the presen-tation is to convince you that you don't, and that there's a narrow window open to grab the opportunity."

So what information should you seek and where do you get it? Caffey recommends checking out the name of the business opportunity, location of the company and the names of its principles prior to at-tending the initial meeting. However, he cautions, this information probably won't be available from the operator when you call the toll-free number to make your reservation; instead, ask to speak to one of the principles.

Because I couldn't get information when I called, I checked the Web and found basic information on the company as well as sites where people claimed this particular company had scammed them. There were also sites where distributors advertised the business and buyers said they were having good results with at least two of the three programs. I then looked at the Federal Trade Commission's (FTC's) site (http://www. ftc.gov) and found that the firm I had purchased the business opportunity from had agreed to a $500,000 consumer redress settlement.

"When we bring an action [against a company], it means we've found reason to believe what they're doing violates the law, but it isn't a conclusive finding. Most settlements aren't conclusive; however, a judgment of the court is a legal determination that they've violated the law in the manner we allege," explains Betsy Broder, a lawyer and assistant director of the Division of Marketing Practices at the FTC Bureau of Consumer Protection. Translation: If there's been a settlement, tread warily.

In addition to checking with the FTC, Broder advises finding out whether the business opportunity is registered in your state and in its home state. Twenty-five states require registration, but the financial threshold varies. In Utah, companies selling an opportunity for more than $300 must register, while in California, the threshold is $500. Even in states where the registration rule is in place, many companies-such as the one I bought from-circumvent this requirement by pricing their opportunity just under the threshold.

That's why it's best not to jump at the seminar's "one-time-only" low price, reiterates Caffey. Should you decide the purchase is worth your money, Caffey advocates calling the company after the seminar to negotiate a deal. For example, if you like only one of the businesses offered in the package, offer to purchase only that one-at a reduced price.

If you absolutely must purchase at the seminar, Caffey stresses flexing your economic power. If the requirement is payment upfront with receipt of the merchandise to follow, say you'll put down a deposit and pay the rest when the items arrive.

The key to protection is knowledge, say Broder and Caffey. Ask questions, do your due diligence, and don't believe that becoming successful is as easy as the presenters say it is.

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