The embattled swim school franchise has run into trouble in the United States after expanding there following its collapse in Australia.

Foodco Group is now in the sights of the parliamentary inquiry into franchising after threatening its franchisees with legal action over alleged 'defamatory claims'.

"Franchisees are really investors in a business but in fact have fewer rights than employees," the Scafs say. "In the case of Aussie Farmers going into liquidation there is no one to protect us. We have lost our investment, in our case around $250,000; our livelihood and our only source of income overnight with no warning, no possibility of recovery, through no fault of our own."

So desperate is the situation that one woman put a Donut King shop up for sale for $1, less than a price of a donut.

In just a few days, Caltex devoured its franchise store network and RFG announced up to 200 stores would close.

There are some hallmark problems within franchising in Australia and internationally and not all are within the franchisor's or franchisees' control to fix.

The law assumes franchisees do their financial and legal homework when it comes to signing up to a chain, but research shows franchisees are often overconfident and ignorant of the risks.

Julia Banks will never forget the panic attacks. She still finds herself waking up in the middle of the night, heart pounding and mind racing from stress.