Anyone with the money to rent a storefront and and put up a sign can have a martial arts business, actual knowledge and skill isn't necessary 'cause people believe what they want to believe. In the '60s and '70s when a martial arts school opened it wasn't uncommon for a visit to be made from an already existing school and sometimes challenges were made, this tended to keep the frauds to a minimum. Sadly in todays litigious society this no longer tolerated and frauds flourish. To believe this is soley in the empty hand martial arts world and hasn't entered the firearm martial arts world is very naive.
My opinion, whether it be empty hand or firearm if what you are studying doesn't have sparring or Force on Force as part of the curriculum you might want to ask why.