The gag order will help prevent prospective new franchisees learning important details about the churning franchise.

It should be noted that current and ex-franchisees of systems have no duty under the law to disclose information about their businesses to prospective franchisees.

This will help the prospective franchisee understand the costs and risks they are likely to take on if they purchase and operate the franchise.

Their names, locations and closing dates are listed in the offering plan distributed to prospective franchisees.

How can prospective franchisees avoid companies that may go belly up?

Even though many of the prospective franchisees may have lost $25,000, those are the lucky ones, according to Mr. Klein.

Additional costs will include paying accountants, creating marketing materials and running advertising to promote the franchise to prospective franchisees.

Compared with last year, the number of exhibitors increased 50 percent, to 179, and paid attendance doubled to 27,000, largely prospective franchisees.

He tells prospective franchisees to imagine they are at a friend's barbecue.

Nevertheless, prospective franchisees should understand the many pitfalls - indeed, some people have lost their entire investment rather quickly.