Monday, March 10, 2014

All Franchises aren't created equal! EB-5 visa investors should carefully select the franchise they invest in, as many franchises are unsuitable & often impaired by fraud and conflict of interest.

I got a call 2 days ago from an EB-5 visa investor who wanted to invest in either Sbarros or Marcos Pizza as some unscrupulous franchise broker wanted them to buy one of these franchises in order to get EB-5 visa.I told the gentleman to strictly avoid both and instead opt for a safer franchise. This morning the same EB-5 visa investor called me and thanked me and mentioned that I should see the news. I looked up Sbarros and was not surprised to see that Sbarros filed for bankruptcy protection.

Franchises can often be a great way to get EB-5 visas, but EB-5 visa investors need to watch out for fraud. I've seen Voodoo BBQ franchises offered by Joe Sloboda, where they didn't disclose their conflict of interest to EB-5 visa investors, and saw a similar situation with David Tashroudian and Carl's Jr. franchises too.

Papa John's or Dominos franchise may be great for EB-5 visa investors, while Marco's Pizza may be unsuitable. Similarly, 5 Guys may be suitable while Voodoo BBQ may be unsuitable. EB-5 visa investors should remember that they should seek objective advice from those who owe them fiduciary duties, and not from those who may have a conflict of interest, as unscrupulous franchise brokers and their affiliates try to solicit EB-5 visa seekers to invest in a business with a risky business model, in order to earn commissions from the franchisor at the expense of the EB-5 visa seeker.

An easy way to find out if a franchise is a good option or not, is to ask a lender bank if they will finance that franchise. If the lender says no, then the EB-5 visa seeker should avoid the franchise. Another easy way to find out is to ask the franchisor to provide audited financial statements from 10 of the closest franchisees to see what was the annual NOI per store, and in case the stores are making losses or very little profit, the EB-5 visa seekers should avoid the franchise. EB-5 visa seekers should also ask Franchise brokers and promoters to disclose in a notarised affidavit the commissions they will receive from all sources, in order to make an informed decision on whether to invest or not in a particular franchise. Finally, EB-5 visa seekers should seek the help of reputed and experienced Licensed Business Brokers who offer a written guarantee of freedom from conflict of interest to their clients, to help EB-5 visa seekers make an informed decision.

Our competitors usually don't offer written guarantees of full disclosure and freedom from conflict of interest, while we do so confidently and proudly. Our competitors don't have over 10 years of Business Brokerage and Advisory experience helping investors buy / start businesses to qualify for the EB-5 visa, while since 2004, we've helped 65 investors get their EB-5 visa.

We offer a full fee refund guarantee in case our client's EB-5 visa petition is denied due to our fault. We also offer a written guarantee of full disclosure and freedom from conflict of interest, and none of our clients has suffered operating losses or capital losses. For more information, please call or visit our website

Yours truly
Mohammed Shaikh, MBA, CFE, Licensed RE & Business Broker (CA & FL)
Phone: 407 535 0616

No comments:

Post a Comment