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MATCO TOOLS Lawsuit: VILLANO et al v. TD BANK et al Goes to Arbitration

September 4, 2012

UnhappyFranchisee.com – MATCO TOOLS lawsuit by franchise owner to be settled via to arbitration.

In November, 2011, we wrote about the Matco Tools franchise lawsuit :

FRANCHISE LAWSUIT Alleges Matco Tools Scam, TD Bank Fraud

“…A father and son – David Villano, Jr. and David Villano III, through their attorneys, Marks & Klein, LLP of Red Bank, N.J., today filed a class action lawsuit against TD Bank and Matco Tools, Inc. alleging the tool company franchisor and the bank engaged in a loan fraud scheme to encourage unsophisticated borrowers to enter into risky business loans to buy Matco Tools franchises.

The scheme enabled Matco to sell more franchises and TD Bank to make risky loans without concern. The bank knew if the loans failed, the loans would ultimately be repaid by United States taxpayers through the SBA guaranteed loan program. Data from the SBA shows that from 2000 to 2010, Matco Tools’ SBA loans had a staggering 37.3 percent failure rate.”

On August 29, 2012 Judge Freda L. Wolfson ruled in favor of Matco and Danaher’s request for arbitration:

LETTER MEMORANDUM AND ORDER that Defendants Matco and Danaher’s Motion To Stay Pending Arbitration is GRANTED to allow the claims as between Plaintiffs and Matco and Danaher to be arbitrated as per the Distributorship Agreement; that Defendant T D Bank’s Motion to Dismiss is DENIED with leave to refile after the completion of the arbitration; that Defendant Matco and Danaher’s Motion to Dismiss is DENIED as moot; that this case is administratively terminated with the right to reopen after the completion of the arbitration. Signed by Judge Freda L. Wolfson on 8/29/2012.

Arbitration is seen by most as a serious setback for the Matco franchisee plaintiffs.

Read the Judges Memorandum & Order (PDF) here:  Villano et al v. TD Bank et al (11-cv-6714)

Also read:

MATCO TOOLS Franchise Complaints (4000+ comments)

Mobile Tool Franchise Issues & Index

MATCO TOOLS Distributor Franchise (Overview with links)

ARE YOU FAMILIAR WITH MATCO TOOLS, DANAHER CORP, OR TD BANK?  PLEASE SHARE AN OPINION OR INSIGHT BELOW.

Contact UnhappyFranchisee.com

MATCO TOOLS: More Franchise Complaints

June 5, 2012

One year ago, we posted an invitation for Matco Tools franchise owners and ex-franchise owners to share their complaints.

We also invited those who had a good experience with the Matco Tools franchise to voice their opinions.

That simple invitation resulted in the fastest-growing and most active discussion to date on UnhappyFranchisee.com, with nearly 5,000 comments being posted.

Since 5,000 comments can make the page load slowly, we invite commenters to continue the discussion below.

Are you familiar with the Matco Tools franchise dealer opportunity? Please share a comment below.

Here are a few random comments from the previous page:

Todd A. Peterson wrote:

Mine was very profitable being ranked 41 out of 1500+ franchisees my first year. My problems started when they fired the employee of their company who hired me a District Manager and then proceeded to tell me that if I didn’t surrender shops that they claimed were unapproved by their company I would be terminated as a franchisee. When I did what they requested, because I felt I had no other choice, they just let an ailing economy and shop closures destroy the half a business I was left with after the TAKEOVER.

“Lady Matco” Debbie Solko wrote:

Seems there are HUNDREDS of distributors like myself

I was fed lies, my route was never viable, it was criminal that it ever was sold to me

It was criminal that an ERROR (by my DM) perpetuated itself for over SIX months – despite my repeated requests to explain or correct (I can document)

I can DOCUMENT & PROVE all the TRUTHS I’ve told

Matco plants can taunt and offend and try to derail but – it won’t work

routes are not viable

LOC are inflated

no support

LIE are told

income projections are false…

I am returning my franchise and want a refund

Tommy Cheung wrote:

I was a franchisee from 2005 to late 2008. In 2008 when the economy took a hit, Darryl Pritchett and Mike Ramey terminated my franchise for purchase average, in which half my district was not at average. Matco did nothing to assist or advise about what to do in this situation…

Matco does not care about their franchisees, they just want to sign you up and could care less what happens… Matco has a failure rate that is astounding, they do not care if you succeed or not, they only want you to sign your life away and wait for you to be terminated, and they can sign someone else up and cut the route in half and give your territory away…

Do not purchase a Matco franchise because they control everything you do, it is not your own business, RUN LIKE HELL WHEN YOU SEE MATCO COMING!!!!!!!!!!

richard wrote:

i have just been recently terminated for not buying my 80%.

i had 2 different routes in almost 4 years. my first route was so spread out. i drove 700 miles a week. there was a new route that opened much closer to me and i asked for it or i was going to resign. i was given the new route but no support. i had to provide the finances of a new distributor but i wasnt given the perks, ie 9% on psa accounts. i lost all my current purchase history and had to start over there.

my dm took me for a ride of my new route, which took all of 2 hours. he said that i didnt meet the requirements for a meet and greet since i was already a distributor. it took me over 4 months and alot of hell raising to get my route sheets which i was supposed to have when i started. now i am out of business and my customers are calling me and telling me about some man that they have never seen before coming around saying that there would be a new distributor starting soon. this is the same man that supposedly did my initial route survey.

i have only been out of business less than 30 days. i tried to return my inventory and was told that anything over 60 days or truck worn would not be accepted. most of what i typed in came up as non returnable. there is quite a game here that they are playing with other peoples money and futures.

i spoke with my regional manager, mike ramey, 3 weeks ago about numerous issues and was assured that he would get back with me in a week. i have not heard from him since. i am glad that some have had great success and sorry that some have had none. it is thier way or the highway and when you ask for help they run like hell. i am out of business and my dm is telling distributors to call me about things that he knows nothing about or is willing to find out.

after seeing all this on here i will definitely be calling Jerry. right is right and wrong is wrong. i just like so many here invested my lifes savings in this choice just to be taken advantage of and left in the cold. i had money in the bank and excellent credit and now i have none.

The most upsetting fact is- One year ago, my business was doing fine. I was ‘breaking even’ and all my bills were getting paid. Then my DM stepped in, accused me of “living off my inventory”., told me I should be concerned as my inventory value had dropped. So, I did as HE instructed – and ordered more inventory. My route could not sustain increased inventory and therefore I fell behind. It is very difficult to catch up once you have fallen behind. Especially, considering I was operating under FALSE budget figures. I borrowed money -time and time again, thinking I just needed to get “over this hump”. The actuality was – it wasn’t a ‘temporary’ set back – it was a fundamental shortage that only snowballed over time.

ARE YOU AN MATCO TOOLS FRANCHISE OWNER OR EX-FRANCHISEE?  ARE YOU FAMILIAR WITH THE MATCO TOOLS FRANCHISE OPPORTUNITY?  SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

MATCO TOOLS Franchise Complaints

June 5, 2012

MATCO TOOLS Franchise Complaints:  Have you had any dealings with MATCO Tools  or the MATCO Tools franchise?  Please share a comment about your experience – good or bad – below, as well as advice for those considering investing in a MATCO Tools franchise.

Also read: FRANCHISE LAWSUIT Alleges Matco Tools Scam, TD Bank Fraud

We received the following franchise warning about the MATCO TOOLS franchise opportunity.  According to commenter “TOMMY CHEUNG” :

“STAY AWAY FROM MATCO TOOLS. THEY WILL SELL YOU A BILL OF GOODS,WHICH IS NO GOOD.

“RUMOR HAS IT ,MATCO MAKES MORE MONEY SIGNING NEW FRANCHISES THAN THEY DO TAKING CARE OF THEIR CURRENT ONES.

“DARYL PRITCHETT AND MIKE RAMEY WORK TOGETHER TO SIGN YOU UP AND THEN KICK YOU TO THE CURB. I AM WORKING ON A LAWSUIT AGAINST MATCO, HOPING TO TURN IT INTO A CLASS ACTION SUIT. YOU MAY CONTACT JERRY MARKS AT MARKS AND KLEIN LAW FIRM AT [redacted], IF YOU ARE INTERESTED.

“I INVESTED ALOT OF MONEY IN MATCO AND AFTER 3.5 YEARS THEY SHUT ME DOWN. WHEN THE ECONOMY SLOWED IN 2008,THEY PUT ME OUT OF BUSINESS.

“I ALSO SPOKE TO A PREVIOUS EXECUTIVE, WHO CALLED ME, AND STATED THATS THE WAY MATCO DOES BUSINESS. STAY AWAY FROM MATCO TOOLS AND RUN LIKE HELL WHEN YOU SEE THEM. I REPEAT DO NOT BUY OR INVEST IN MATCO TOOLS…”

Marks & Klein is a legitimate franchise law firm that often represents franchisees in lawsuits against their franchisors, but we haven’t verified with them whether a lawsuit against Matco Tools is in the works or not.

WHAT DO YOU THINK?  IS MATCO TOOLS A GOOD FRANCHISE OPPORTUNITY, A FAIR FRANCHISE OPPORTUNITY OR A FRANCHISE SCAM? 

If you’ve had dealings with Matco Tools, please share a comment below.

Matco Tools Franchise Posts & Discussions

MATCO TOOLS Franchise Complaints  June 8, 2011 (1000+
comments)

MATCO TOOLS Franchise Defenders Speak Out December 7,
2011 (Comments defending Matco invited)

MATCO TOOLS Distributor Franchise December 7, 2011 (Overview with
links)

MATCO TOOLS Franchise Report Alleges Distributor Churning  November 29,
2011

MATCO TOOLS 2011 Franchise Disclosure Document (FDD) & Other
Resources
  November 22, 2011

MATCO TOOLS Class Action Lawsuit, “Secret” Sales Projections  November
22, 2011

FRANCHISE LAWSUIT Alleges Matco Tools Scam, TD Bank Fraud  November 15,
2011

Failure Rates of the 10 Most Popular Franchises  April 26, 2010

Other Mobile Tool Franchise Posts:

MAC TOOLS Guilty of Franchise Fraud?  November 7, 2011

CORNWELL TOOLS Franchise Scam or No Scam?  November 17, 2011

MATCO TOOLS 2012 Franchise Disclosure Document (FDD)

April 30, 2012

Matco Tools distributor program has become a hotly debated subject on UnhappyFranchisee.com.

This post is meant to provide significant reference material and important documents for the ongoing Matco Tools franchise distributorship debate.

A blog post on MATCO TOOLS Franchise Complaints set off a lively debate between Matco distributors.

Also read:  Mobile Tool Franchise Issues & Index

Further heating up the debate is a class action lawsuit filed against Matco Tools & TD Bank alleging they conspired to defraud the SBA and new Matco distributors into entering high-risk loans that were likely to fail. Read about the lawsuit here:

FRANCHISE LAWSUIT Alleges Matco Tools Scam, TD Bank Fraud

MATCO TOOLS Class Action Lawsuit, “Secret” Sales Projections

Why are some Matco Tools distributors adamant that the Matco distributor program is fair while others insist that the Matco System is rigged for them to fail?

One point of difference seems to be that the rules are different for distributors with older agreements. For that reason, we are posting the Matco Tools Franchise Disclosure Documents (FDD) for 2010, 2011 & 2012.

These are the versions Matco Tools filed with the state of Minnesota to meet its franchise disclosure laws:

MATCO TOOLS 2012 FRANCHISE DISCLOSURE DOCUMENT

MATCO TOOLS 2011 FRANCHISE DISCLOSURE DOCUMENT

MATCO TOOLS 2010 FRANCHISE DISCLOSURE DOCUMENT

Matco Tools distributors who had joined prior to October, 1992 were eligible for a special Charter Agreement. Some have contended that those with the oldest agreements have the most lenient terms and greater chance of success than those who sign today. The Charter Agreement Q&A’s were posted on the Matco Distributor Association Facebook page:

MATCO TOOLS Charter Agreement Q&A Part 1MATCO TOOLS Charter Agreement Q&A Part 1 (click to enlarge)

 

 

 

 

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MATCO TOOLS Charter Agreement Q&A Part 1 (click to enlarge)MATCO TOOLS Charter Agreement Q&A Part 2 (click to enlarge)

 

 

 

 

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Relevant Links:

Debbie Solko’s Lady Matco distributor site

Matco Tools Distributor Association Facebook Page

Matco Tools Corporate Website

Matco Tools Franchise Sales Site

Do you have any relevant resource documents that we can post? If so, feel free to email them to UnhappyFranchisee[at]gmail.com.

ARE YOU FAMILIAR WITH THE MATCO TOOLS DISTRIBUTORSHIP? SHARE A COMMENT BELOW.

Contact the author or site admin at UnhappyFranchisee[at]gmail.com.

MATCO TOOLS: Veterans Against Matco Franchises Launches Facebook Page

February 7, 2012

VetFran or VetScam?  An unhappy franchisee claims that Matco Tools uses phony patriotism to sell its high-risk, high-failure franchise opportunity to trusting veterans.


According to IFA press releases, “more than 2,000 veterans have taken a path to business ownership through the International Franchise Association’s Veterans Transition Franchise Initiative, known as VetFran. According to IFA’s recently completed VetFran survey, 2,089 veterans have become small-business franchisees since 2002 by taking advantage of financial incentives.”

About 217 (about 10%) of those veterans were sold the Matco Tools franchise opportunity.  For an investment ranging between $82,000 and $191, these veterans were granted the right to drive around in a mobile tool store, peddling Matco Tools to a pre-approved list of customers (known as a “List of Calls” or “LOC”).  As an incentive, Matco Tools “gifted $5,000, at list price, in free hand tools to any honorably discharged veteran.”

Matco Tools aggressively promotes its franchise opportunity to veterans, and proudly publicizes that it signs up more veterans than any other company in the VetFran program.

Unhappy Franchisees Claim Matco Tools Defrauds Veterans.

Growing numbers of failed, failing and struggling Matco Tools franchise owners are claiming that Matco Tools is using deception to sell a franchise opportunity designed to fail.

More than 4000 comments have been left on our post MATCO TOOLS Franchise Complaints

The orchestrated protests against the Matco Tools franchise are documented here: MATCO TOOLS Distributor Franchise.

Now, veteran and former Matco Tools franchisee Todd Allen Peterson has launched a Facebook page specifically to protest Matco Tools recruitment of veterans.

Peterson write that the purpose of his Veterans Against Matco Franchises Facebook page is to publicize “ACCOUNTS of REAL soldiers who DEFENDED their Country and what Matco did for their Businesses.”

According to Peterson:

I have created this page to make Veterans aware that Matco is a Corporation of greed and destroys those who fall prey to their claims of success through support and partnership. Matco has no interest in creating a relationship with Franchisee’s but to take their money, ruin their credit and at any means terminate them is what they do best. Do not believe their lies! …My Matco graduation class in Stow, OH had 10 Distributors in it. Today there is only 1 left. I recently spoke to him and he told me that he has already been warned about Matco wanting to ditch him by his District Manager. I have been calling terminated Distributors and these reoccurring themes seem to be told. NO SUPPORT, BAD ECONOMIC CONDITIONS, UNVIABLE ROUTES, MATCO STOLE MY SHOPS AND THEY LIED TO ME.

Richard Brannies posted this warning on the page:

i too was a veteran that was misled into the matco franchise system.

it is not set up to build a profitable business.

they will lie to you, mislead you and dump you with all that they have stuck you with in the end.

In addition to the Veterans Against Matco Franchises Facebook page,  the Matco Tools Distributor Association facebook page was also launched recently to protest alleged fraudulent inducement and lack of support by franchisor Matco Tools.

IS THE MATCO TOOLS FRANCHISE A GREAT OPPORTUNITY FOR VETERANS?  WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Or contact Unhappy Franchisee.

MATCO TOOLS: Unhappy Franchisee Launches RoboCall Campaign

January 16, 2012

Martin Luther King said “Our lives begin to end the day we become silent about things that matter.”

Unhappy Matco Tools franchisee Debbie Solko honored Reverend King’s birthday yesterday by letting freedom (and hundreds of telephones) ring.


Ms. Solko launched the first in a campaign of automated phone calls  promoting awareness and participation of her nascent Matco Tools Distributor’s Association to current and former Matco Tools franchise owners.

Franchisee Protests Go Robo

The Sunday evening “robo-call” was the latest in a multi-prong, grassroots informational campaign by Ms. Solko (aka Lady Matco) and a vocal group of current and former Matco franchisees who complain that Matco Tools uses predatory and fraudulent business practices to recruit trusting franchisees, provide them with an inadequate customer base, and force them into make excessive inventory purchases they neither need nor can afford.

Franchisees complain that Matco Tools then terminates the struggling franchise owner, then resells the franchise to start the cycle all over again.  (See MATCO TOOLS Franchise Complaints)

Debbie “Lady Matco” Solko’s message promotes several ways franchisees can take action, from learning more (by visiting UnhappyFranchisee.com), to joining the Matco Tools Franchisee Association (at LadyMatco.com) to attending their rally in Las Vegas at the end of February.

In the message, franchisee Solko states:

Stand by for a special announcement concerning Matco Tools.

For too long, Matco has unfairly treated its distributors.  But with the formation of the Matco Tools Franchisee Association, all that is changing.

Please log on to www.LadyMatco.com and join.  Simply enter your confidential contact information to receive regular updates and newsletters via email.

Learn about the latest lawsuits filed on your behalf at www.UnhappyFranchisee.com.

Join us in Las Vegas to protest Tool Expo and all the scams Matco uses to get you to buy more tools than you need or your cash flow can afford.

This is the year to get rid of the threat of termination based upon the use of the illegal National Purchase Average.

It’s also the year we make Matco live up to all of their contractual obligations, including giving us 325 tool-buying customers.

We’ve already had an effect on the recruiting efforts.  Just Google “Matco” and see the impact for yourself.

We have everything to gain and nothing to lose.

From Lady Matco and the entire Matco Franchisee Association Team, see you in Vegas!

Click here LISTEN to the Matco Franchisee Association Automated Message.

Matco Tools Franchise Posts & Discussions

MATCO TOOLS Franchise Complaints  June 8, 2011 (3000+ comments)

MATCO TOOLS: Franchisee Alleges Franchise Fraud (Video)  January 4, 2012

MATCO TOOLS: Lady Matco Speaks Out (Video)  January 1, 2012

MATCO TOOLS Franchise Defenders Speak Out December 7, 2011 (Comments defending Matco invited)

MATCO TOOLS Distributor Franchise December 7, 2011 (Overview with links)

MATCO TOOLS Franchise Report Alleges Distributor Churning  November 29, 2011

MATCO TOOLS 2011 Franchise Disclosure Document (FDD) & Other Resources  November 22, 2011

MATCO TOOLS Class Action Lawsuit, “Secret” Sales Projections  November 22, 2011

FRANCHISE LAWSUIT Alleges Matco Tools Scam, TD Bank Fraud  November 15, 2011

Failure Rates of the 10 Most Popular Franchises  April 26, 2010

 

ARE YOU FAMILIAR WITH THE MATCO TOOLS FRANCHISE? WHAT DO YOU THINK? SHARE A COMMENT BELOW!

To contact the author and site admin, email UnhappyFranchisee[at]gmail.com

 

MATCO TOOLS Franchise Video Battle [UPDATED]

January 4, 2012

The MATCO TOOLS Franchise Information Video is narrated by Senior Vice President of Sales Tim Gilmore, and posted for public viewing by the company on YouTube.


It begins:  “Hi. My name is Tim Gilmore, Vice President of Sales for Matco Tools in Stow, Ohio.

“Having started as a Matco Tools distributor over 20 years ago, I’m in a unique position to talk to you about an opportunity to become part of the Matco Tools franchise team.

“I want to give you a sense of who we are at Matco and a brief history of our unique business model…”

Matco Franchise Video Comes Under Fire

The original franchise sales video we posted here (and that had been promoted by Matco Tools on YouTube.com for over a year), came under fire by Matco franchise owners who claimed that it contained fraudulent claims by now-President Tim Gilmore about the success rates of franchises vs. independent businesses.

In the original video, Matco’s Tim Gilmore states that a “recent study” by the U.S. Department of Commerce proves that 91% of all franchises are successful.

Not only does that study not exist, claim unhappy franchisees, but Matco’s own SBA loan default rate is 37%.

Matco Tools franchisee Debbie Solko posted an angry response to Tim Gilmore’s claims in a homemade video (“Gilmore Lies”) she posted to YouTube.

Franchisee Debbie Solko Attacks Matco Tools Sales Claims as Lies

 

Within days of franchisee comments about the video on UnhappyFranchisee.com and an angry video posted on YouTube, Matco Tools took their franchise sales video offline.

Matco Tools Removes The Video from YouTube

Matco Video Removed

 

Matco Tools Posts an Edited Version with Success Statistics Removed

A few days later, the video was replaced with a version that had the controversial statistics crudely edited out.

Watch the REVISED Matco Tools Franchise Information Video below:

 

UnhappyFranchisee.com has been host to a heated discussions and numerous complaints by current and former Matco Tools franchise owners who feel that Matco represents the nature and risk level of its franchise opportunity.

What do you think?  Does Mr. Gilmore provide a factual and accurate picture of the Matco Tools franchise program and opportunity?

Matco Tools Franchise Posts & Discussions

MATCO TOOLS Franchise Complaints  June 8, 2011 (3000+ comments)

MATCO TOOLS: Franchisee Alleges Franchise Fraud (Video)  January 4, 2012

MATCO TOOLS: Lady Matco Speaks Out (Video)  January 1, 2012

MATCO TOOLS Franchise Defenders Speak Out December 7, 2011 (Comments defending Matco invited)

MATCO TOOLS Distributor Franchise December 7, 2011 (Overview with links)

MATCO TOOLS Franchise Report Alleges Distributor Churning  November 29, 2011

MATCO TOOLS 2011 Franchise Disclosure Document (FDD) & Other Resources  November 22, 2011

MATCO TOOLS Class Action Lawsuit, “Secret” Sales Projections  November 22, 2011

FRANCHISE LAWSUIT Alleges Matco Tools Scam, TD Bank Fraud  November 15, 2011

Failure Rates of the 10 Most Popular Franchises  April 26, 2010

 

ARE YOU FAMILIAR WITH THE MATCO TOOLS FRANCHISE DISTRIBUTOR PROGRAM? WHAT DO YOU THINK? SHARE A COMMENT BELOW!

To contact the author and site admin, email UnhappyFranchisee[at]gmail.com

 

MATCO TOOLS: Franchisee Alleges Franchise Fraud (Video)

January 4, 2012

Matco Tools has posted numerous video franchisee testimonials on YouTube extolling the benefits of the Matco Tools franchise opportunity.


However, the latest franchisee videos have been unflatteriong, to say the least.

Debbie Solko is a current Matco Tools franchisee who is fighting for survival on a sparsely populated route in the Rocky Mountains.

Solko (the self-named “Lady Matco”) has posted her second video claiming that she is the victim of a fraudulent franchise investment scheme that sets up its distributors to fail.

Her video (entitled “Matco tools franchise FRAUD”) begins:

“Hi.  My name is Debbie Solko and I’m a Matco Tools distributor.

“I’ve been a Matco Tools distributor for the past two and a half years… soon to be ‘former’ tool distributor.

“I am the victim of franchise fraud and let me tell you why…”

Solko claims that Matco Tools was contractually obligated to provide her with 325 viable, potential customers as part of her franchise agreement.

According to Solko, Matco  Tools is also contractually obligated to resupply viable, potential to make up for attrition, shop closures, and layoffs.

In her video, she claims that Matco Tools has failed to fulfill either obligation… and now she is in danger of having her franchise terminated by Matco.

Watch her short video:

Debbie “Lady Matco” Solko’s first video is posted here:  MATCO TOOLS: Lady Matco Speaks Out (Video)

Matco Tools Franchise Posts & Discussions

MATCO TOOLS Franchise Complaints  June 8, 2011 (3000+ comments)

MATCO TOOLS Franchise Defenders Speak Out December 7, 2011 (Comments defending Matco invited)

MATCO TOOLS Distributor Franchise December 7, 2011 (Overview with links)

MATCO TOOLS Franchise Report Alleges Distributor Churning  November 29, 2011

MATCO TOOLS 2011 Franchise Disclosure Document (FDD) & Other Resources  November 22, 2011

MATCO TOOLS Class Action Lawsuit, “Secret” Sales Projections  November 22, 2011

FRANCHISE LAWSUIT Alleges Matco Tools Scam, TD Bank Fraud  November 15, 2011

Failure Rates of the 10 Most Popular Franchises  April 26, 2010

 

ARE YOU FAMILIAR WITH THE MATCO TOOLS FRANCHISE DISTRIBUTOR PROGRAM? WHAT DO YOU THINK? SHARE A COMMENT BELOW!

To contact the author and site admin, email UnhappyFranchisee[at]gmail.com

Mobile Tool Franchise Guide: Franchise Resales

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.

To contact the author or site admin, email UnhappyFranchisee[at]gmail.com.

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