George Cohon, renowned businessman and founder of...
As a franchisee in Canada, you're susceptible to fraud just like any other small businesses. This can come from unexpected places; not all fraud stems from employees who got hired at your business just for that purpose. Sometimes, people who start out as good employees see an opportunity and can't resist the temptation. However, fraud can cost your franchise tremendously before you catch it as there are usually fewer checks and balances in place in a small business than a larger one.
With that in mind, here are two fraud red flags to watch out for in your franchise, and what you can to avoid becoming a victim.
One of the issues in a franchise is that with a smaller staff, work that is important can easily end up falling under the responsibility of just one person, and this is especially common in finance and banking areas. Here, you will need checks and balances in place, and you can't give any one person too much control over one aspect of the business. Be mindful of the worker who volunteers to handle everything. He or she may just be an overachiever, but they could also be trying to gain access for the wrong reasons.
Consider having a third-party accounting firm handle your finances and other important aspects of your business that you may have only one employee handling right now. This is to provide oversight and mitigate your risk exposure.
Do your homework when hiring
Some fraudsters are audacious and will present themselves as an expert in an area in which they don't have any qualifications. If they've done it once, they will try it again, and they may be a seasoned con artist by the time they've reached your business.
Do your homework when it comes to anyone interviewing for a position at your franchise, and pay special attention to those who claim a lot of experience and qualifications. Check references and carry out background checks so you know who you are hiring.
A franchise, especially a new one, can be put out of business by fraud, so always be on the lookout for warning signs. Don't have all of your administrative work done without oversight. When your finger is on the pulse of all areas of your business, you'll be better able to spot early indicators of fraud before it's too late.