Scratch Repair Network Posted by Daved

Hi Daved

Please do not be put off by horror stories, as they are very rare and do not reflect of the tens of thousands of happy franchise owners across the country.  However, it is good to be cautious as there are always bad eggs around and you really want to be buying into a known and working opportunity.

Looking at The Scratch Repair Network (who I have not heard of before) I can see that they are a fairly new franchise, their website was only registered in January of 2009 and they have opted to have their address omitted from the domain registry which does concern me a little.  You can look for yourself HERE I can see though that they have 2 other working websites, presumably for their first 2 franchises although they may be company ran.

http://www.manchesterscratchrepair.co.uk/

http://www.newcastlescratchrepair.co.uk/

Also:

http://www.repairscratchedglass.co.uk/

http://www.idealscratchrepair.co.uk/

All these domains have been registered in 2009 and there may be some more.  There is also numerous adverts and free listings scattered everywhere so they obviously are doing plenty of Internet marketing, possibly a little odd for a glass repair company and all seeming to come about AFTER they have gone to franchise, not much internet marketing BEFORE they went to franchise which tells me that they have either employed someone to do marketing for them along with their franchie launch or that it is a "made to franchise" business where the idea is to franchise and not run the company as a standalone and profitable business.

I would want to find out how long they were in operation before they went to franchise.  This really shows that they were operating a profitable business and are now looking at franchising as a means to expand.  What you do not want to find out is that they came up with the idea of scratch repair as a business to franchise and have no experience themselves and have not ran it for 5-10 years as a standalone company.

It could well be an excellent opportunity however it is most definently new and as such you need to do some research on them to find out if you are likely to be getting the 50k in the first year that they say you will and the 100k turnover in subsequent years.  Promises like this are rarely kept and for such a low start up fee you are looking to be making 10x what you paid for the franchise in year 1, a promise which is there to reel you.  Most good franchises you should expect to be making profits in year 2,3,4 as it builds up.  However there is always an exception to the rule...

I would tread carefully and if you are really interested then you need to do thorough due diligence to ensure that you are investing well.

For those seeking franchises or similar oportunities - let the investor beware! Do your homework but don't let blind enthusiasm get in your path- your research is vital especially talk to all existing investors. There are plenty of dodgy operators/promoters out there who will make wild claims. Don't listen to them. Duco Magic - scratch repair operator in Australia/New Zealand - were charged by the Australian Competition and Consumer Commission (ACCC) for misleading or deceptive conduct in their business dealings with prospective purchasers about the profitability and demand for Duco Magic business opportunities and services. Duco Magic made claims that could not be substantiated. Many investors lost a heap of money and even a NZ class action was in progress. Needless to say that Duco Magic has tried to reinvent itself in the aftermath and evidence is such that these old practices in the scratch repair business are now again resurfacing. Google "Duco Magic and ACCC" for the Federal Court Order report.