Franchise fraud is when someone lies or tricks you into thinking you are buying a legitimate business, but it turns out to be a fake. It's like if a bad person were to pretend to sell you a toy, but when you get it home, it's just a rock. The bad person tricked you into thinking it was a toy! In franchise fraud, the bad person is promising to sell you a real business, but it's not real. You may lose money and have to deal with a lot of stress.