The first penny stock I ever bashed online, around 1997, was a two-pronged scam: an unworkable franchise concept hawked by a Pump and Dump public corp controlled by convicted felons. The web was new then, but minimal research turned up plenty of red flags.
I knew quite a bit about the field the franchisor was in and I managed to reach a few of the "marks" by phone. There I got my education into the mentality of franchisees. Many are utterly unsophisticated and not inclined to tackle meaningful research (like penny stock players, especially back in those Dot Com bubble days). Hard for me to understand how someone will sink their entire savings in an untested business based on a couple of glossy promotional pamphlets and sales patter from a toothy salesman. As for audited numbers... there weren't any. At least GRLD provides some figures, as dreadful as they are!
I pleaded with several prospective buyers to contact a competent franchise lawyer or CPA before investing. Not one did, and all lost everything. One called me back a year later to describe how she blew thru $100,000+ ... all the money she had inherited from her parents. At least she thanked me for the advice she ignored!
With that 1997 deal some lost twice. Several of the more prosperous franchisees also invested in the franchisor's stock. I spoke with a franchisee who dumped $75,000 into the firm's shares that traded briefly around $7 on the OTCBB. The stock followed the typical Pennyland trajectory... a 2-year decline to near zero followed by a reverse split and name change. The whole operation vaporized by the time of the Dot Com meltdown in 2000.
Likely GRLD will be able to sell some franchises even at $25,000. The tougher problem will be keeping trucks on the road. As you said, operating a food truck must be a "soul-sucking" endeavor. I presume there will be ongoing franchise fees beyond the $25,000 startup fee. How much can they charge for a stinkin' grilled cheese or even a "gourmet" variant? LOL!
With GRLD you'll probably see a succession of operators running the same trucks with each paying a startup fee. (one way Subway makes money). I agree with you, many operators are likely to walk away immediately. I hope the vets spend as much time researching the brutal food truck business as they'll spend listening to the franchise sales hype.
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