GNC Lawsuits, Regulatory Actions Affect Franchise Decision
GNC consumer lawsuits and regulatory actions are a significant concern for prospective – and current – GNC franchise owners. The current GNC Franchise Disclosure Document (FDD) contains 17 pages of litigation and class action lawsuits.
(UnhappyFranchisee.Com) Instead of investing in a GNC franchise, the smarter, more lucrative play may be to enroll in law school and get a job either suing or defending General Nutrition Centers and GNC Holdings, Inc.
That seems to be where the real money is.
The next in our series of concerns regarding the GNC franchise opportunity is the mountain of consumer lawsuits & regulatory actions being heaped on the supplement and vitamin manufacturer, retailer and franchisor.
Peruse the 2016 GNC Franchise Disclosure Document and you’ll see the 28 pages or so of lawsuits and governmental actions against GNC Holdings Inc. and its companies.
View GNC Litigation Disclosure
Of the hundreds of FDDs we’ve reviewed over the years, it’s hard to recall many with this many pages of litigation.
It’s staggering.
GNC Consumer Lawsuits & Regulatory Actions
In October, 2015 Oregon’s attorney general filed a lawsuit against GNC for allegedly selling dietary products containing illegal ingredients. In a complaint filed in Multnomah County, Ore., Circuit Court, the state alleges GNC sold thousands of products containing two “potentially dangerous” synthetic ingredients: picamilon and BMPEA. GNC contends that the claims “are without merit.”
A prospective franchisee should be concerned about how this massive amount of litigation could affect them, such as the financial burden on the stability of parent company, the constant attention that the parent company has to give to lawsuits (not the franchisee), the negative press and damage to the GNC brand that these lawsuits are causing, and the potential for a franchisee to get sued if someone claims that a product they sold resulted in illness or death.
Also of concern is the fact that one must be confident and believe in the product to effectively sell it.
With all of these charges, one must question the safety of GNC products and the reliability (and the legality) of the claims GNC makes about them.
Other concerns in this series:
- GNC Franchise Cost and Concerns
- Stability of Parent General Nutrition Corporation
- GNC Consumer Lawsuits & Regulatory Actions
- Declining Same-Store Sales, Rising Competition
- Direct Competition from General Nutrition Center Parent
Click on each of the above links to read – and share your thoughts on – our concerns.
Sources:
GNC Franchise Disclosure Document (FDD) 2016
ALSO READ:
FRANCHISE DISCUSSIONS by Company
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