April 2, 2013
MAC Tools distributor Robert Wall, Jr. regrets the day he signed up as a MAC Tools distributor.
An experienced mechanic, Robert Wall, Jr. signed up as a MAC Tools distributor for a route out of Dewey, OK after being laid off from his job as a jet mechanic at Cessna Aircraft.
In just two years of trying to keep his MAC Tools distributorship afloat, Robert Wall, Jr. lost his savings, his severance, his retirement account, two houses, a Nissan pickup truck and his Honda Goldwing.
His credit score had been 840, and his wife’s was 870 before joining MAC Tools… today both are under 500.
In all, Robert estimates his losses at around $200,000.
According to Robert, Stanley Black & Decker-owned MAC Tools provided inadequate training, no guidance and no support.
“MAC only wanted their money,” he told us in a recent interview.
As a result, only 2 of the 9 distributors Robert trained with are still in business.
To those considering the MAC Tools distributor opportunity, Robert Walls, Jr. says: “Just don’t go there, period.”
An Interview with Former MAC Tools Distributor Robert Wall, Jr.
UnhappyFranchisee: Robert, what’s your background? What were you doing prior to owning your franchise?
Robert: I was working at Cessna Aircraft in Independence, KS, as an A & P mechanic, specializing in systems installations on the Citation Mustang jet. I was laid off in March 2009 after nearly three and a half years. Prior to that, I had been an ASE certified auto technician for 15 years. I also worked as a mechanical and civil drafter.
Robert: I looked into the possibility about 2-3 months after my layoff. I initially prospected with Matco, then decided they would have too much influence in my business, and I also spoke with the former Matco dealer for this area, ( I knew him when I worked as an auto tech) who gave me information and advice not to go with Matco.
UnhappyFranchisee: How did you first learn about the general concept? What did you find appealing about this type of business?
Robert: I was aware of the general idea from when I was an auto tech. Since there were limited dealers in this area, I thought it would be a boon, although we were in a nationwide recession at the time.
UnhappyFranchisee: Describe the company’s sales process and your interaction prior to becoming a franchisee.
Robert: I sought them out, after failing to come to any agreement with MATCO, and it was pretty easy, once they saw that I had already gone through MATCO’s preliminaries.
UnhappyFranchisee: How was the company’s training and pre-opening support. Was it a positive experience?
Robert: Well, to start, I had to go clear across Oklahoma to go on the “discovery ride” with a dealer in Liberal, Kansas. Couldn’t get any of the SOB’s in the Tulsa or OKC area to ride with. Yeah, they paid for my motel, I bought my gas and eats for a week. As far as “tool school” goes, it was just peachy. In Ohio, they comped the room, most of the meals, taught the basics about tool-selling. I just loved the role-play. “Now, say it just like we say it, these are tried and true methods!” I could hardly stay awake for most of it. Some good training on their software, to get us started.
UnhappyFranchisee: Do you remember how many other franchise groups were represented in your initial training class? Do you know how many are still in business today?
Robert: There were ten people, one was a candidate for DM, out of us nine, there are 2 left. Even the DM got out.
UnhappyFranchisee: What marketing and promotional guidance, programs & support were provided? Were they effective?
Robert: NO guidance. NO support. District meetings were all about buying tools and stupid ass price point crap that made no sense, always tying in with a BOGO deal. One meeting had the Launch rep there. I asked him point blank, who do you work for? He says “Launch.” This rep dissed me while riding with the Matco dealer in my territory, told a customer that I had lied, that I couldn’t get the deal I had told him I would on a scanner. DM told me there wasn’t a thing he could do.
They were always pushing MAC Card, backed by Greensky, whoever that was. No help there, because they would not approve ANYBODY, except my wife. She got a Platinum card. I put her through just to see what would happen. She was the only one of about twenty apps that went through. After that, I just gave up trying to put anybody through.
UnhappyFranchisee: How was your first year in business? Was the support what you expected? Why or why not?
Robert: My first year in was just what I made of it. No support. My DM didn’t help me unpack, or even ride with me for the first month or so. He rode with a guy in my class, who started up about two hours away from me, in Stillwater, OK. I got some dweeb out of Georgia or somewhere to ride with me. He was on the computer, the phone, or out crying beside the truck because he and his wife were having problems.
I re-scouted my own route after I got home, finding new stops to replace the ones that didn’t pan out. Then my new truck broke down. I had a 2009 GMC C5500 from Herr, and at 14K miles, the engine started acting up. Well, it sat in a GMC Truck dealership shop for SIX WEEKS being worked on, while I ran around in my personal vehicle, with tools and stuff in the back, computer in the front seat, making hand receipts, and wringing my hands trying to get GM Corporate to light a fire under somebody’s ass to get my truck back. Couldn’t hardly sell a thing, made good on some promo stuff I got from MAC, and that worked for about two weeks, and I tried to stay steady on my route to collect.
UnhappyFranchisee: What were the positive aspects of your experience?
Robert: I liked having my own business, the fact that I tried to make it a service-based business instead of a sales-driven business was a good thing, and it went over well with a lot of customers, but having lite bulbs and batteries won’t pay the fuel bill.
UnhappyFranchisee: When did things start to go wrong? What was it that made you an unhappy franchisee?
Robert: Things went south when I couldn’t keep up the payments to MAC, Wells Fargo, and fuel. When you can’t guarantee that you can even fire up the truck to make your route, it’s time to quit.
UnhappyFranchisee: Did you try to resolve your issues with the franchisor? What was the outcome?
Robert: MAC only wanted their money, and I found out that the “financial consultants” you talk to to pay your bill, or make arrangements (ha!) have weekly meetings to discuss “distributor viability” which is a fancy term for letting you go, or cutting you off.
UnhappyFranchisee: What is your current situation? What would you like to see happen at this point?
Robert: I’m done, disgusted, maybe a little settlement money before I die, or MAC Tools exposed. I doubt if anyone will actually see anything worth having after the lawyers pull up to the tit and suck their fees from any kind of “settlement.”
UnhappyFranchisee: Do you think that the MAC Tools distributor concept is a viable?
Robert: No, not really, not at this point in time. You have too many mechanics that have a lot of their own tools. You have the new guys who buy all their tools at once with student discount programs, and most everybody surfs the net, so the service part of the business has really fallen by the wayside, because any dealer who can make it on lite bulbs and batteries doesn’t have much on the shelves. And you definitely DON’T need half of the tools they send you in your start-up.
UnhappyFranchisee: What mistakes did you make? Looking back, what would you have done differently?
Robert: Never use credit cards when you are in a bind, you will NEVER pay them back like you think you will. Especially for fuel.
UnhappyFranchisee: How has your investment in a MAC Tools distributorship decision affected your life?
Robert: It’s back to square one for me. Dirt low credit score, lost homes, working for insurance, driving a beat-up pickup. At least my wife didn’t leave me. That schmuck in Georgia wouldn’t leave MAC, so she left him.
UnhappyFranchisee: What advice would you give to prospective franchise owners? What questions should they ask? What warning signs should they look for?
Robert: Just don’t go there, period. Most cities are looking for more and more restaurants and eating places. Try your hand at that, or a food truck. Don’t even think about a tool truck.
If you would like to contact Robert Wall, Jr., please send a request to UnhappyFranchisee[at]gmail.com
MAC TOOLS Franchise posts on UnhappyFranchisee.Com
ARE YOU FAMILIAR WITH THE MAC TOOLS FRANCHISE DISTRIBUTOR OPPORTUNITY? PLEASE SHARE YOUR OPINION BELOW.
TAGS: MAC Tools, MAC Tools franchise, MAC Tools distributor, MAC Tools pricing, MAC Tools opportunity, MAC Tools distributor opportunity, MAC Tools dealer, tool truck franchise, mobile tool franchise, Stanley Black & Decker, MAC Tools complaints, franchise lawsuits, Robert Wall Jr., Dewey OK, Bartlesville OK
March 30, 2013
MAC TOOLS Distributors: What problems are you dealing with in your mobile tool business?
Are you dealing with:
- Not enough qualified customers?
- Being put on hold?
- Price competition?
- Cash flow problems?
- Constant pressure to buy more tools?
- Trouble getting support and advice from your BM other than “put more tools on the street”?
Please share your current problems below.
Anonymous comments are fine.
Buddy the Business Manager will address your problems with tips, ideas and advice.
The Mobile Tool Dealers Association is proud to introduce Buddy the Business Manager.
Buddy the Business Manager is a seasoned, battle-tested tool industry veteran whose priority is tool dealer profitability and success.
Through this site and our online newsletter, Buddy will tackle tough tool dealer challenges and situations, and provide you with hype-free, no-nonsense, unbiased advice and resources.
Tell Buddy your problems by leaving a comment!
Sign up for the MTDA email newsletter by joining the Mobile Tool Dealers Association here. It’s free and confidential!
ARE YOU A MAC TOOLS DISTRIBUTOR OR FRANCHISEE? SHARE A COMMENT BELOW.
Tags: MAC Tools, MAC Tools franchise, MAC Tools distributors, MAC Tools complaints, Stanley Black & Decker, Tool truck franchise, tool truck dealer, tool truck complaints, mobile tool dealer association
March 13, 2013
MAC Tools franchise complaints are streaming in to UnhappyFranchisee.Com from struggling & angry MAC franchise owners like Nick & Paula Tsantles (see video below) and Cory & Michelle Seguin (see MAC Tools Screwed Us).
In their video, Nick & Paula Tsantles warn would-be MAC Tools franchise owners of the truth behind the Be-Your-Own-Boss, Control-Your-Own-Destiny hype of the MAC Tools franchise sales pitch.
- Indifference to franchisee hardship by the franchisor (tool manufacturing giant Stanley Black & Decker)
- Lack of support from MAC Tools
- Fraudulent list of “guaranteed customers,” some of whom have been closed for 10 years
- A route that had 5 previous distributors, now gone
- Unreimbursed warranty expenses & uncompensated repair time
- Tools made in China and Taiwan
- A system designed to drive franchisees deeper and deeper in debt
- Financial & personal devastation while MAC Tools profits
“Thanks Mac Tools for screwing our family!”
Nick: Hi, I’m Nick and this is my wife Paula. I’m a Mac Tools Franchisee, I started with Mac tools a year ago and I wanted to take a few minutes to tell you how the past year with Mac tools has been, so you don’t make the mistake I did. Be your own boss, own your own business. You don’t need to know anything about tools. They sell themselves. All you need to do is show up for work everyday. You will start making your paycheck in 12-16 weeks after you start. Sounded good to me.
Paula: Mac does an extensive background check on potential distributors and franchisee. They make sure you have the financial backing to bring you into the business. This is all done before you go to Mac Tool school for training and testing so it doesn’t matter how well you do in school. They don’t care! They know you have the money so you’re in! Yet you are asked to do business with people you don’t know on a hand shake. Sell the tools, Mac doesn’t care if the customer pays. They know they will get their money.
Nick: I’ve struggled from the very beginning, support and help from Mac was very limited. District Managers were always busy with other new start up distributors. the answer to the problem was always “put more tools on the street” which meant me getting deeper in debt with Mac Tools even though there wasn’t enough money coming in to pay my personal bills. They did not seem to care much about what I was going through in my life as long as I sent them there money every week.
Their “12-16 weeks and you will be making money” has turned into “12-16 months and still not making money.” We have depleted our savings account. Your success or failure with Mac Tools is literally the flip of a coin.
Paula: The list of calls on the route survey Nick was given supposedly conducted on January 15, 2012, yet many of the shop on his list of calls have been closed. Some have been closed for as long as 10-15 years! Yet they claim on January 15th, 2012 somebody from Mac visited each and every one of these shops. There’s no way this happened.
Nick: It’s been tough getting customers to trust again after being left high and dry by prior Mac distributors. I didn’t find out until after I started that there has been 5 previous Mac Tools distributors in this district since 1990. Doesn’t sound like a record of success to me.
Paula: Something also we were never told. Several Mac Tools are mad in China or Taiwan. It is strongly suggested to pull the Made in China or Taiwan stickers off all the tools before displaying them.
Nick: Not one word was mentioned about the distributor taking the fall for broken return tools. When they told me they would give me a UPS account number I thought it was for the cost of sending broken tools back to Mac. NO the customer makes out, he gets a brand new tool in replace of his broken one, Mac makes out because they keep a customer and I get screwed working for free and paying the cost for the postage to return the broken tools.
Not to mention my time, and gas, running across town to take returns the UPS.
Nick: Nick has sold and received payment of over $115,000.00 in 2012 and has not made a dime. Mac tools get all of theirs and then there is nothing left.
My family lived a pretty simple life style, although now we are working ourselves to death and living my income only (which for a family of 5 this is around poverty level for this county)
Our family is falling apart! We are miserable! Thanks Mac Tools for screwing our family!
MAC TOOLS Franchise posts on UnhappyFranchisee.Com
ARE YOU FAMILIAR WITH THE MAC TOOLS FRANCHISE DISTRIBUTOR OPPORTUNITY? PLEASE SHARE YOUR OPINION BELOW.
TAGS: MAC Tools, MAC Tools franchise, MAC Tools video, MAC Tools distributor, MAC Tools pricing, MAC Tools franchise opportunity, MAC Tools distributor opportunity, MAC Tools dealer, tool truck franchise, mobile tool franchise, Stanley Black & Decker, franchise complaints, franchise lawsuits, Nick Paula Tsantles, Nick Tsantles Mac Tools, Paula Tsantles Mac Tools
March 13, 2013
March 5, 2013
“MAC Tools screwed us” states MAC Tools Distributor Cory Seguin in a video that warns would-be franchise owners from owning a MAC Tools mobile tool distribution franchise.
(UnhappyFranchisee.Com) (The Seguin’s video and a transcript of the text are posted below).
In the video, Cory & his wife Michelle tell how MAC Tools sold them a tool truck route (at an investment, thus far, of $130,000) without telling them that three prior distributors had failed with the same route.
The Seguins contend that many MAC Tools distributors fail, in part because of a lack of corporate support, inadequate tool financing, and independent competitors who sell the same products at significantly lower prices.
The Seguins claim their MAC District Manager (DM) had no concern for their success, and was only interested in collecting a “huge sign up bonus.”
Are you a MAC Tools distributor or former distributor? Please share your opinions and experiences with a comment below. If you are willing to take a short survey, see the link below.
MAC Screwed Us Cory & Michelle Seguin Speak Out
“MAC Tools Screwed Us” Video Transcript
Cory: My name is Cory and this is my wife Michelle. I am a Mac tools distributor and this is how MAC tools screwed us.
Michelle: They started off by painting a beautiful picture of how life would be like as a distributor; being your own boss, running your own business, having more time to spend with your family and having a much a larger wallet. We invested over $130,000 and Cory is yet to draw a paycheck after 14 months. We are struggling. The DMs paint a great picture because they are thinking of the huge sign up bonus that they will get.
Cory- Mac did not tell me that there were 3 prior failed distributors on my route.
They claimed that there was tons of support; I received no support from MAC Tools, my RM or My DM when I needed them!
MAC took away the MAC card 8 months in, which means no financing for customers. Especially on tool boxes so I could not even compete with the competitors.
Michelle: They put me in a route knowing that there was an independent dealer selling the exact same products for much lesser prices and again I couldn’t compete.
There was even a light that Cory sold to all his customers that was advertised as a MAC exclusive product. A month later it was out in the Canadian Tire flyer. He sold it for $133.00 and CT for $20.99. We paid $95.19 as distributors for those. Customers were furious and his DM did nothing to help him. Cory lost a lot of money and people’s trust
MAC expects you to put each customer on a Time payment plan so the tool is paid off in 5 weeks. But MAC you wants you pay them within 30 days, if not you will be put on hold and that means no tool orders shipped. Most trade’s people cannot afford to pay a large tool off in 5 weeks. But we have to pay MAC. There were even orders placed on our behalf that we didn’t order. It is not humanly possible for a distributor to do this alone ….that is why they want the wives to be involved.
Cory: we were really taken advantage of and now we could lose everything. Don’t make the same mistake that I did and get screwed by MAC Tools.
Cory & Michelle Seguin would like to hear from other MAC Tools distributors. If you are willing to share your experience through a short survey, please click here: MAC Tools Distributor Survey.
If you would like to contact Cory & Michelle Seguin, please send a request to UnhappyFranchisee[at]gmail.com
MAC TOOLS Franchise posts on UnhappyFranchisee.Com
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TAGS: MAC Tools, MAC Tools franchise, MAC Tools video, MAC Tools distributor, MAC Tools pricing, MAC Tools franchise opportunity, MAC Tools distributor opportunity, MAC Tools dealer, tool truck franchise, mobile tool franchise, Stanley Black & Decker, franchise complaints, franchise lawsuits, Cory Michelle Seguin, Cory Seguin Mac Tools, Michelle Seguin Mac Tools
March 1, 2013
MAC TOOLS franchise owners claim they can’t compete because not only aren’t their products exclusive – they are sold by competitors for much lower prices.
(UnhappyFranchisee.Com) “MAC Distributors invest $120,000+ to be the exclusive distributors of quality MAC tools at fair prices,” states a slideshow prepared by disgruntled MAC Tools distributors.
MAC Tools distributors claim that the franchisor (the MAC Tools division of tool manufacturing giant Stanley Black & Decker) is “simultaneously undercutting their own distributors and franchisees” while overcharging loyal and trusting MAC Tools customers.
This situation, MAC franchisees contend, is leading those who invested in MAC distributorships down “a sure path to bankruptcy.”
Some franchisees contend MAC Tools is indifferent to their plight because Stanley Black & Decker’s MAC Tools division will simply resell the failed route to another trusting, enthusiastic distributor… an industry practice known as “franchise churning.”
MAC Tools Distributor Slideshow:
MAC Tools Prices Significantly Higher for Same Tools?
MAC Tools franchise owners allege that many of the tools they sell are offered at significantly lower prices by competitors… damaging their reputation with their customers and making it impossible to compete.
For example, the MAC Tools slideshow shows that MAC Tools promotes a cordless rubberized LED worklight as a “MAC Tools Exclusive” product.
It sells the worklight to its distributors for $95.15, who then offer it for $103.99 (regularly 134.92, MAC claims).
MAC Distributors claim their competitors sell the same light for only $20.99… nearly 80% less than MAC’s retail “sale” price and $74.00 less than MAC’s wholesale price to its distributors.
Here are some other examples from the slideshow:
|Product*||MAC Tools Retail Price||Competitor’s Retail Price||MAC’s Price is higher by ($)|
|1/2” Impact AW612Q||$400.99||$244.95||$156.04|
|1/2” Impact AWQP120||$320.99||$209.95||$111.04|
Source: MAC Tools Distributor Slideshow
What do you think? Is MAC Tools gouging customers and dooming its own distributors? Share your thoughts below.
ALSO READ: Mobile Tool Franchise Issues & Index
ARE YOU FAMILIAR WITH THE MAC TOOLS PRODUCTS & PRICING, OR THE MAC TOOLS FRANCHISE DISTRIBUTOR OPPORTUNITY? PLEASE SHARE YOUR OPINION BELOW.
TAGS: MAC Tools, MAC Tools franchise, MAC Tools slideshow, MAC Tools distributor, MAC Tools pricing, MAC Tools franchise opportunity, MAC Tools distributor opportunity, MAC Tools dealer, tool truck franchise, mobile tool franchise, Stanley Black & Decker, franchise complaints, franchise lawsuits, unhappy franchisee
February 26, 2013
MAC Tools distributors are sold the idea that the MAC Tools franchise is their path to the American Dream: a way to be their own bosses, control their own destinies, gain financial independence and build stronger futures for their families.
However, two wives of MAC Tools distributors characterize their experience with MAC Tools as more of a nightmare than a dream.
Two MAC Tools wives sent UnhappyFranchisee.Com a revealing conversation (See the link to A Nice Conversation Between Two Mac Tools Wives at the bottom of this post).
In the dialogue, they describe the despair that results from devoting long hours to a business that not only doesn’t turn a profit, but is sinking them further and further into debt.
The MAC Tools wives describe the toll the business is taking on their husbands, who are caught between a franchisor that demands payment according to rigid terms, and their mechanic/customers who struggle to make their tool bill payments.
Many MAC Tools franchisees, it seems, end up in the unenviable position of selling high-priced tools to undercapitalized customers, then assuming their credit risk.
MAC Tools Challenges are a Family Affair
When a MAC Tools distributor struggles, it can take a devastating toll on the entire family.
MAC Tools distributors have told UnhappyFranchisee.Com they while their initial motivation was to create opportunities for their families, they find themselves not only battling for financial survival, but fighting to save their homes and keep their marriages intact as well.
MAC Tools franchise owners complain that they assume most of the risk (by putting their own money out “on the street”), work a grueling schedule and spend countless hours performing uncompensated warranty repair work.
MAC Tools distributors also complain that their franchisor sells the same tools to their competitors at deep discounts, enabling them to drastically undercut the MAC Tools franchisees in the marketplace.
“MAC Tools Has All Our Money…” – A MAC Tools Wife
In their dialogue, the two MAC Tools wives commiserate about the financial trap they’re in:
MAC Tools Wife #2: No wonder me and my husband get so frustrated when a mechanic can only pay $20.00 towards his account some weeks! I start wishing that he did not make a sale because of it. My husband and I end up losing money hand over fist in situations like this. And believe me- it happens a lot!
…But when it comes to paying your own tool bill to Mac Tools- we can’t get away with it! This week alone we dished out $2,000.00 one day and another $3,000.00 the following day. And it’s only Wednesday! Can’t wait to see what we owe them tomorrow!
MAC Tools Wife #1: I agree. The bank account is drained. Our line of credit is maxed out. Our credit cards are outrageous. Where did all the money go? Oh – Mac Tools has all our money because they get paid first. Our other money is out on the street not getting paid back to us. We certainly don’t get a pay cheque. All we wanted was to own our own business! How I regret that we ever got into doing this. My husband had a dream when he first got into this! The dream is now turning into a nightmare. This is only our first year in business.
While this dialogue is between two specific MAC Tools wives, it likely represents conversations in tool dealer’s households and tool trucks across the U.S. and Canada every day.
READ: A Nice Conversation Between Two Mac Tools Wives (WORD Doc)
Read more posts on MAC Tools.
Read more about Mobile Tool Franchises: Mobile Tool Franchise Issues & Index
If a tool truck distributorship or franchise has had an effect on your family – good or bad – please leave a comment below.
ARE YOU FAMILIAR WITH THE MAC TOOLS FRANCHISE DISTRIBUTOR OPPORTUNITY? PLEASE SHARE YOUR EXPERIENCE BELOW.
April 3, 2012
Mac Tools has a tumultuous history with its dealers and distributors.
For more recent Mac Tools news, conflicts, issues and lawsuits, check out the posts indexed at our Mobile Tool Franchise Guide page.
Recently, we were given a link to an archived version of a now-defunct Mac Tools protest website called MacToolsSucks.Com.
While not much has been saved from the original website, we found (and reproduced below) a detailed history of when the troubles allegedly began for Mac Tools distributors, and the more contentious conflicts that arose between Mac Tools and its distributors in the 1990s.
The account below is reproduced from an archived page captured April 4, 2009 from MacToolsSucks.Com.
The author is unknown (at least to us).
A brief history lesson (Not the company line)
In The beginning……..
Mac Tools was founded in Sabina , Ohio in 1938 by a group of seven men who had a great deal of vision. Seeing the growth of the automobile industry, these fellows saw a huge opportunity and seized it and started building and direct marketing hand tools to companies and individual mechanics at their place of business. Government contracts during the war years solidified Mac’s place in the tool manufacturing business and was instrumental in the growth Mac enjoyed during the post war boom times.
After building a solid company with a successful sales approach, Mac was on the cusp of being a world leader in the hand tool industry. By the late 1970′s, Mac had grown as big as it could under the structure of the previous forty years. In 1980, after some corporate shuffling, Mac became a member of the Stanley Works giving it a profile and credibility that only the biggest tool company could.
Change is in the wind……
For many years, Mac Tools was run as a separate entity under The Stanley Works and by all accounts from those that were there, was profitable and was growing at a modest but reasonable rate. Then came the 1990′s and with it a new way of doing business. The direction Mac has taken this decade is far from the philosophies it’s founders prescribed to and quite frankly would make each and every one of the seven founders turn over in their grave.
The early 90′s saw a North America wide recession and profits of many of the big companies were down. Mac Tools had seen the last of its autonomy. The word from Stanley was a huge restructuring was in the works and this marked the end of the a long tradition in the tool business. Stanley assured it’s independent contract distributors that their investment and livelihood was safe and these moves would increase profitability for all involved. Many people accepted this and were supportive while others were skeptical and with good reason.
By aligning Mac Tools with other Stanley hand tool manufacturing, they created the Mechanics Tool Division within the Stanley works. This was done to streamline operations by eliminating duplication of processes and to upgrade tool forging technologies. This was the start of a downward spiral of employee, distributor and customer confidence in Mac Tools that they have seen over the latter half of this decade.
The first wave of discontent was created when it was decided to close old manufacturing facilities and build new facilities with modern equipment and techniques. Shortly after the closure of these older facilities, the distributor force began to experience significant supply problems creating a huge back order problem. While distributors from all over the world questioned the corporate entity as to why key items were suddenly not available, Mac continually told their people that it was temporary and, it seems, neglected to truthfully communicate the seriousness of the situation.
One distributor, who was tired of losing sales and not being able to provide timely warranty for his customers, called a manager and pressed for a concrete reason as to why this company who he was contractually obligated to buy his product from was unable to supply it. Months after the start of the back order problem this distributor was told by (former) manager Doug Millar that the reason was because Mac had been in negotiation with the United Steel Workers union whose members were employees at the plants that were closing. Mr Millar said that negotiations involving severance and new employment at new factories for existing workers had fallen through and that on the last days of operations at the plants slated for closure, the union brothers and sisters committed sabotage on the equipment that was to be moved to the new factory causing the turnaround time to change from one month into several.
When asked why this was not communicated earlier to the distributor force, (former) national sales manager Steve Eyre said it would have destroyed distributor morale. Many distributors all over North America were angered because they had a financial stake in this company and believed that they were owed all applicable information that could effect the performance of their individual distributorship business. After over a year, problems persisted and many people left the business for reasons ranging from anger and frustration to bankruptcy. Many of the distributors interviewed felt the same way in that if they were a salaried employee, they did not need to know everything but as a contract distributor with tens of thousands of dollars on the line it was essential to know as much as possible.
Adding insult to injury, Mac Tools continued to recruit new distributors even though they could not adequately supply the ones they had let alone any new ones. The distributors who started at this time were at a huge disadvantage for obvious reasons and many had a tough time making a go of it. One of these distributors named Claude Gaumont was so angry about what appeared to be false information during the time he was recruited, he looked into lawsuits, but was dissuaded because of the monumental task of fighting this giant. He eventually quit the business and in his own words "has not looked back".
As existing distributors saw new distributors starting, many noticed that many of the key items they were needing, but were on back order, were available in "starter inventory packages" the new guys were receiving. Often, after a new distributor cycled some of his inventory and went to reorder, he too was faced with a huge supply shortage just like the rest of the distributor force.
It is very interesting and certainly worth noting that the turnover rate of distributors is traditionally high. Certainly higher than Mac will tell a potential distributor when they are being recruited. Mac has an aggressive recruiting program as they always need warm bodies to replace their departing distributors. In fact, the district managers are paid bonuses and receive accolades for having the most "starts". As long as there are new people to fill routes, Mac gives little effort to retaining existing distributors and assisting them in clearing hurdles that often have been placed in front of them by Mac themselves. As one former manager said "it is easier to start a new guy than to try and clean up the problems of an existing one".
If it is easier and they are paid for new starts, than why would they try to lend support to existing guys? Many of the managers who practised this have quit because they know it is an unethical practice, but many more practice this on a daily basis as it appears to be company policy.
During this very tumultuous time, Mac decided to implement a new credit system for customers who want to make large purchases. Traditionally, it is the distributor who finances customer purchases on a short term basis, however larger purchases required more formal financing for a longer term. This system is called Mac Advantage and although it was conceived to increase sales on large-ticket items, increase market share and contribute to Stanley’s bottom line it has been very unpopular with a great deal of distributors and customers.
When Mac Advantage was introduced to the distributor force, it was presented to the distributors with several key points; 1) Annual interest rate of 12%. 2) No recourse to the distributor if account defaulted. 3) Start date April 1994. The system Mac Advantage was to replace was called "Mac Cap"and because it was 18% per annum and full recourse to the distributor, it was very unpopular. Distributors were told that all contracts under the Mac Cap system would automatically roll over to the new Mac Advantage system on the conversion date. Once the presentation was made, distributors from all over were told to promote and sell contracts based on this criteria.
After being told this information and given the mandate to sell, distributors from all over did what they were told based on the information that they had been given. The system was not implemented until March 1995 (not April 94), the interest rate was 18% per annum (not 12%) and there was recourse to the dealer (not "no recourse"). Quite a bit different from what was communicated from management.
Customers were angry because they were told their interest rate was going to be 12% not 18% and the distributors were angry because they were not given the same system described to them earlier. During this time, the distributor’s credibility was quickly eroding due to product availability issues and because of the way Mac Tools presented and implemented the "new and improved"system.
Not only were problems created during the initial phases of the Mac Advantage system, the bulk of complaints were about to become apparent. Often, distributors (past-present) have stated that contracts, customer payments and credits due were apparently "lost" creating a delay in receiving credit notes. This causes many distributors unnecessary grief and cash flow problems and erodes the professional image and credibility distributors work to build and maintain. Many customers have had problems with Mac Advantage ranging from missing payments, interest over charges, timely service and even alleged fraud perpetrated by an "agent" of Mac Tools. Complaints about this system have come in from customers, distributors and managers from Vallejo, California to St.Johns, Newfoundland from Vancouver Island to Dade county, Florida.
Distributors demand action!!!
Distributors were now getting frustrated and many of those who have litigious freedoms, particularly in the U.S., began looking to the courts for vindication. A landmark decision by the Supreme Court of Idaho awarded one such distributor named Bill Griffin $500,000 in compensatory damages based on Mac’s "wanton, malicious and outrageous conduct" and the "repeated and flagrant violation"of Idaho’s consumer protection act (little FTC act). This decision opened the door for others with similar complaints and the attorney who represented Mr. Griffin himself settled over fifty claims against Mac Tools for a total of more than $1.8 million in 1995 alone. Many cases have been argued or are pending all over North America, with virtually all of them based on the same complaints.
Growth At What Cost??
Along with the restructuring and re alignment on the manufacturing side of their business, Mac also began implementing other changes to the distribution and the time honoured sales approach that had been with them for almost sixty years.
In order to help streamline distribution, warehouse facilities in California and Canada were abruptly closed causing many loyal employees to once again lose their livelihood. The distribution restructuring caused Mac Tools Canada to cease to exist causing not only the aforementioned loss of jobs, but also caused the Canadian distributors even more grief as they were now dealing with international borders as well as the difficulty of being amalgamated with a completely different system. Operational problems were now very common causing many Canadian distributors a great deal of loss and in turn many deemed this newest obstacle the last straw and quit the business many had put so much into.
Now that Mac Tools had laid the foundation by streamlining the business (many believe on the backs of loyal distributors, employees and customers) they were poised to increase their market share. What they did was unveil a plan to replace the entire U.S. distributor force, through attrition (who have a financial stake as contract distributors), to an employee distributor force (with no financial stake). This way they can expand into new markets and more importantly can increase the bottom-line by reaping not only the wholesale profit they have always had, but by now reaping the retail profit that the traditional distributor used to have. Not only is it more profitable for them, but employees have no reason to enter the legal forum as do traditional distributors when perceived wrong doings can’t be rectified any other way.
Many traditional distributors who are still with Mac in the U.S. feel that they are actually being forced out to make way for a new "Mac Direct" employee distributor. Many feel that the already scarce product line is being given to the employee distributors before the traditional distributors, creating even harder feelings.
One fellow from Indiana recently said "I got forced out by having a hard time getting the product that my customers wanted. Therefore I was having a hard time collecting money, which started me on that hold problem." Another distributor said "I was in for 5 years as a traditional distributor and I was a top performer, $166,000 in sales in the first 5 months of this year. I quit because I could not get enough product. it seems that the employee distributors did not have the same problem" By all indications it seems that the traditional distributor is going to become a memory with Mac Tools….except in Canada.
Only In Canada, Eh?
When Mac Tools Canada was closed it ceased being a separate entity from Mac Tools Inc. Now it is considered a district under the U.S. system. It has the distinction of being the only district to continue to recruit in the manner it always has, in other words it is business as usual in Canada and you will not see any employee distributors in that district. Why?? Good question, so we did some in depth investigation and came up with an appalling explanation:
When Stanley decided they wanted to increase their market penetration (by expanding the sales force with employees) and profits (by reaping wholesale and retail level profits) one district was left out of the equation….Canada. It was determined that the cost of business in Canada was prohibitive, so they would continue as always with traditional distributors. A letter sent out to the entire Canadian distributor force in August of 1997 confirmed this by saying "There are no plans to introduce Mac Direct in Canada. …. The geographical size of Canada and population would make managing the employee distributor very costly, and not feasible." If it is too expensive for the Mac Direct program to operate profitably, then how can an individual distributor do it?
According to an independent financial report commissioned by a group of distributors in eastern Canada, they can’t. The report, entitled "Mac Tools Distributors’….Chances Of Success!…" outlined key issues that were prohibitive to the Canadian distributor. Such things as "inappropriate financing of inventory levels" and "gross margins realized on products sold are insufficient to cover fixed operating costs, debt servicing requirements and satisfy personal financial obligations." were discussed at length and the conclusion, just as the Stanley report determined, it is too costly to do this business in Canada.
Business As Usual!
As mentioned earlier, District Business Managers (DBM’s) are paid bonuses for recruitment to keep the routes filled. The rate of turn over is high because not only is getting product and support difficult, but distributors also begin to realize the lack of profitability. Fresh recruits assure that the wholesale profit Mac has enjoyed for years is not lost and the lack of profit at the retail level is squarely on the shoulders of individuals thus dissipating the loss over the distributor force and reducing Stanley’s exposure. Great for profit, bad for the people who buy into the program.
As the Mac Direct system goes full steam ahead in the U.S., more and more stories with great similarity are being told at a greater frequency. In Canada, it remains "business as usual." Recruiting is paramount, while retaining seasoned people seems not to be of concern. While deceptive statements and figures during recruitment keep new people coming in. The reality of the return on investment keeps people leaving. But rest assured, a new distributor will be recruited…….and so the cycle continues.
The system has gone through radical changes in the latter half of this decade. Ranging from U.S. traditional distributors being cast to the wayside, to Canadian distributors walking through a revolving door as cannon fodder in the relentless pursuit of profit, to loyal customers losing value of their investment because of a shrinking product line and no equally valuable replacement. Distributors, customers and employees are tired of taking the loses so the corporation can continue to profit. Much of the strategies have since passed, but the effects Mac has had on a great deal of families will live on for years to come.
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February 11, 2012
A group of feisty franchise owners from competing mobile tool brands are joining together to protest unethical industry practices and push for change.
The Tool Dealers Association is inviting franchisees and ex-franchisees from Snap-on Tools, Matco Tools, Mac Tools & Cornwell Tools to fight the alleged predatory practices common to all of their mobile tool franchisors.
Unhappy Franchisee has documented franchisee complaints from all tool franchise brands.
(Visit the Mobile Tool Franchise Guide for a list of mobile tool franchise posts).
One of the first initiatives of the Tool Dealers Association (TDA) is to circulate a message urging MAC Tools dealers to withstand corporate pressure and refuse to convert their “distributorship” agreements to franchise agreements.
MAC Tools Anti-Franchise Flyer is Circulating
Mac Tools has long-maintained that it sells a distributorship, not a franchise, and therefore is not required to provide the disclosure documents or follow the laws governing franchise relationships.
However, Mac Tools has been hit with lawsuits claiming that the Mac Tools distributorship is, in fact, an illegal franchise (See Is MAC TOOLS Stanley Black & Decker Selling Illegal Franchises?).
Mac Tools evidently has come to the same conclusion, so they are urging their Mac Tools distributors to convert over to their new franchise agreement.
A flyer being circulated by the Tool Dealer’s Association warns that the new franchise agreement is a deceptive document designed deprive distributors of important legal rights and to burden them with even more fees and required purchases.
Here’s the copy of the flyer submitted to UnhappyFranchisee.com:
WARNING – - DON’T FRANCHISE !!!
Mac Tools has been deceptive to its distributors for years by telling them Mac is not a franchise. Mac is now trying to cover its deception by “converting” Mac distributors to franchisees.
Present Mac Tools distributors should not convert to the franchise agreement as not only will it cost you more and you will lose rights. Mac will charge a distributor an annual fee of $990 every year they are a franchisee.
Mac distributors are presently protected by various state laws. You may lose these protections if you sign a franchise agreement. For example, certain states provide protections to distributors against termination and the Mac franchise agreement has a very short time – only one year from the time the dispute arises in which to bring arbitration- not suit in New York City! Distributors have nothing to gain by becoming franchisees, they can only lose.
Also Mac’s requirement that a distributor purchase 80% of the national purchase average is illegal. It is a hidden franchise fee because it forces a distributor is to buy more tools than he can resell to his list of calls.
Finally, Mac’s franchise documents do not list the number, names, addresses and phone numbers of distributors who left Mac last year. That again is deceptive because it hides how many distributors failed in business.
According to the Small Business Administration, 31% of the SBA loans granted to Mac distributors have already ended in default (http://www.bluemaumau.org/sba_loan_failure_rates_franchise_brand_2011). The actual failure rate of Mac Tools distributors, including those without SBA funding, is likely much higher.
Mac distributors should join the Tool Dealers Association to make sure that what they worked to build up is not taken away from them!
Printable Flyer (WORD): Mac Tools Franchise Warning
The warnings emanating from the Tool Dealers Association were prompted, in part, with those who experienced a similar conversion when Snap-on Tools converted their distributors to franchisees, a process that (according to the TDA) burdened dealers with increased fees and burdensome restrictions’.
ARE YOU FAMILIAR WITH THE ATTEMPT TO CONVERT MAC TOOLS DISTRIBUTORS TO MAC TOOLS FRANCHISEES? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
Feel free to contact UnhappyFranchisee.com
January 2, 2012
Franchise owners of mobile tool franchises (such as Snap-on Tools, Matco Tools, MAC Tools, & Cornwell Tools) complain that their franchises have little-to-no resale value.
[This post is a work in progress. If you have input on the resaleability of mobile tool franchises, please share a comment below.]
An analysis of the the Matco Tools Franchise Disclosure Document by law firm Marks & Klein* (MATCO TOOLS Franchise Report Alleges Distributor Churning) reported:
“During the three year period from 1/1/08 to 12/31/10, seven hundred fifteen (715) Distributors, forty nine percent (49%) of the total number of MATCO Tools Distributorships open at any time during the period, left the MATCO system.
“Of that 715, only fifty (50) transferred their MATCO Tools business to third party franchisees…
“If a MATCO Tools distributor desired to exit the system during this three year period, and hoped to sell its business through a MATCO approved transfer, that franchisee had less than a seven percent (7%) chance of success. Statistically speaking, such a low success rate indicates that the MATCO Tools businesses run by distributors who were leaving the MATCO system were so unprofitable as to be unmarketable.”
“Everything Snap-on does is contrary to us gaining wealth” – Franchisee Jim Lager
On our post SNAP-ON TOOLS Franchise Complaints, Snap-on Tools franchise owner Jim Lager alleges his franchisor intentionally interferes with its franchisees’ efforts to sell their franchises:
i am trying to sell off franchises and there is no value what so ever in my business. Snap-on does everything they can to inhibit the sale diminish the value…
I am at least a little pissed off at Snap-on because i am trying to sell one of my franchises to one of my dealers. Believe me there is NO BLUE SKY in your business/job. Let me tell you why. snap-on has something called a schedule 1. This lists everything you as a selling dealer has to sale, Inventory, accounts recievable, truck, used tool, discontinued tools, computer, and other things you might sell a dealer. The schedule is bullshit because Snap-on credit will only finance 2 things on that schedule. Inventory and accounts recievables.
The kicker is the maximum accounts recievable or R/A they finance is $55,000.00. So if we do a good job and put a bunch of money on the street, turn it well, Snap-on rewards us by saying they wont finance it when we go to sell it. by the way you can’t go to a bank for financing because if you do, Snap-on tools, not Snap-on credit puts an all encompassing 1st lien against your business. NO BANK WILL TOUCH THIS AND TAKE A 2ND POSITION. Snap-on does this to keep routes cheap and bring in young naive guys with little education to run volume. Snap-on protects themselves. Everything Snap-on does is contrary to us gaining wealth. their training and even volume discount is designed for us to sell high volume at low profit margins.
Understand all my routes do between $10,000 and $14,000 a week. I am very succesful and always have been. snap-on only looks out for us when we force them to. I was a field manager in the 90′s. I will tell you you will never hear a discussion in Snap-on asking themselves what Snap-on did wrong when a dealer is failing. Here is how the discussion always goes. “What can we do to get rid of this guy and put another one in his place.”
…Snap-on loves fresh meat.
* Marks & Klein is a law firm with current litigation pending against Matco Tools & MAC Tools, and past litigation against Snap-on Tools on behalf of franchisees.
ARE YOU FAMILIAR WITH THE MOBILE TOOL FRANCHISES? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
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