General Nutrition Center: Franchise Case Study

A franchise is a type of business structure that has the right to use the same business model of the company it will be representing. The only difference is there will be a single owner to the franchise and they will have more freedom than the average corporate business. In any business there are ups and downs. There is nothing easy about running any company, and that includes a franchise. The idea of having a franchise is to be able to be your own boss and open your own business, while following the guidelines that the franchise division of a company puts in place for someone to follow (Norman, 2006). A franchise owner will be able to use the same corporate model, products, merchandising, and the same prices as those in a corporate entity. When running a franchise there is a lot that goes into it. This gives the franchisor an alternative to developing their brand and creating many …show more content…
General Nutrition Center has performed poorly in disclosing vital information that could have helped the franchisee make a better decision in investing. The Securities Exchange Act of 1934 requires companies to disclose any information about their finances to potential investors. The law prohibits any deceptive activities and fraudulent activities against potential investors (Seaquist, 2012). General Nutrition Center has been fined in the pass for not disclosing vital information to investors about their financial stability to all investors, including franchisees (Mendenhall, 2000).
It is vital for any company to be ethical when they are seeking investors. It is very important to disclose all documents that will help an investor make the right decision when potentially investing in a company. This is especially true when a person wants to buy a franchise.
No person should invest in a company without the proper