Inside the Episode: Is it a Legit Franchise or a Scam?

Use the timestamps below to jump to specific parts of the conversation:

[0:00] – Introduction: Meet David Angway, Registered Financial Planner.

[0:45] – Buying a System: Why franchising is about operations, not just a brand name.

[2:30] – The SEC Myth: Why SEC Registration alone does not guarantee an investment is safe.

[3:45] – Franchising Organizations: The importance of audits and organizational verification.

[7:10] – The ₱500,000 Case Study: Analyzing a real-world investment that went cold.

[9:30] – Identifying the "Gray Area": When partial returns are used to mask a scam.

[13:00] – The "Money-Only" Trap: Why skipping legal and financial advice costs you more in the long run.

[15:45] – The Triple Stress of Scams: Understanding the Financial, Social, and Mental toll of fraud.

[17:30] – Investment in Perspective: Why a ₱5,000 consultation is the best insurance for a ₱500,000 investment.

[18:45] – The Professional Trio: Why every serious investor needs a Planner, an Attorney, and an Accountant.

The Discussion: Understanding Franchise Systems and Scams

Introduction: When investing large sums—such as ₱500,000—into a business, many Filipinos rely solely on SEC registration. However, Registered Financial Planner David Angway explains that there is much more to a legitimate franchise than just paperwork.

Frequently Asked Questions (FAQ)

Kerstie: What exactly are you buying when you invest in a franchise?

David Angway: In franchising, you aren't just buying a name; you are buying a system. For a business to be considered a legitimate franchise, it must have a proven operational system that has been audited and verified.

Kerstie: How do I know if a franchise is legitimate?

David Angway: Beyond SEC registration, a legitimate franchise should be affiliated with recognized franchising organizations. These groups perform specific checks:

• System Audits: They double-check if the business model actually works.

• Legality Checks: They audit the internal legalities of the company.

• Location Verification: They ensure the locations provided are viable. Without these organizational stamps of approval, you should be very cautious.

Kerstie: If I invested in 2021 and only received a small portion of my capital back this year, is it a scam?

David Angway: It is a "gray area." Technically, if they have returned even 10% or 20% of the capital, it shows some movement of funds (often rolled over from other investors). However, it is a huge lesson learned regarding the agreement. It truly becomes a scam when the communication stops and absolutely nothing is returned to the investor.

Kerstie: Why do many investors avoid hiring a lawyer or a financial advisor?

David Angway: Many people have a "money-only" mindset. They think, "I'll just get my money back eventually," and they view an attorney as an extra expense that will "slow down the process."

David Angway: I always tell my clients that paying for a consultation is an investment in your Peace of Mind. We deal with three types of stress in these situations:

1. Financial Stress: The loss of the money itself.

2. Social Stress: The embarrassment of being scammed.

3. Mental Stress: The lack of sleep and constant worry. Spending ₱5,000 for an expert consultation to ease that stress is a small price to pay for your long-term health and clarity.

Kerstie: What is the most important takeaway for someone about to invest?

David Angway: Never make decisions based on emotion or "sabi-sabi" (hearsay). You must build a professional team:

• Financial Planner: To see if the investment fits your overall goals.

• Attorney: To review the fine print of the contract before you sign. If you can't afford the consultation fee for these experts, you probably shouldn't be risking ₱500,000 of your hard-earned money.

Clean Takeaways for Investors

• SEC Registration is Not Enough: A company can be registered with the SEC but still have a failing or fraudulent business model. Look for franchising organization affiliations.

• Buy the System, Not the Hype: If the "franchise" doesn't have a clear, audited operational manual, you are just giving away your money.

• Value Your Peace of Mind: Don't wait until the money is gone to seek help. Consult a financial advisor and a lawyer before signing any agreement.

• Document Everything: If an investment starts failing, keep all records of communication and partial payments for legal recourse.

For professional franchise evaluation and financial wellness consulting, visit davidangway.com.