SNAP-ON TOOLS Dealer Problems – Your Input Invited
March 30, 2013
SNAP-ON TOOLS dealers: 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?
-Collection problems?
- 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 our email newsletter by joining the Mobile Tool Dealers Association here. It’s free and confidential!
Join the Mobile Tool Dealers Association here.
ARE YOU A SNAP-ON TOOL DEALER? SHARE A COMMENT BELOW.
Tags: Snap-on, Snap-on Tools, Snap-on franchise, Snap-on dealers, Snap-on complaints, Tool truck franchise, tool truck dealer, tool truck complaints, mobile tool dealer association
Mobile Tool Franchise Guide
March 13, 2013
Mobile Tool Franchise Issues & Index Read more
SNAP-ON TOOLS Franchise Dealer Warns: Buyer Beware!
July 1, 2012
Considering the Snap-on Tools dealer franchise opportunity? A veteran Snap-on dealer shares his advice with Unhappy Franchisee.
On our post SNAP-ON TOOLS Franchise Complaints, commenter I’m no fool contributed the following advice:
“I wanted to add a little inside information about Snap On Tools. I am currently a dealer that will be leaving soon. This is more of a Buyer Beware tips.
“Snap On Tools is not a business opportunity. Recruiters will tell you that but it isn’t. Here is why…..
“Snap on only will give you 200 potential customers that you can sell tools too. That means you can’t sell to anyone outside those list of people. Even if someone walks in your truck cash in hand to buy something. Snap On can also take away any customers at the discretion that is over 200. If you don’t believe me read the Snap on FDD Document. So how is it a business opportunity if you can’t grow? There is an answer to that question.
“Snap On does allow you to get 2nd route if your looking to grow. It is at there discretion if they will allow it but it can be an option. Here is the problem with that…
- Snap On has to approve your employee that will drive your truck on 2nd route.
- You have to meet the criteria which isn’t as easy then when you first got started.
- You will either have to buy a route from a dealer leaving which doesn’t guarantee you a route because Snap On has the first right of refusal. Or you will have to wait till a route opens which then don’t guarantee you anything because a new prospect coming in will get first choice. Reason for that is because Snap On makes more money on a new start up then adding a 2nd truck for an existing dealer.
- If you figured out how to make money outside of the Snap On way then they definitely don’t want you to grow. Snap On only wants people that will struggle most of there career because it gives the company more power over you. If they allow you to grew so you can make the kind of money any REAL independent person expects to make then that would give you too much power.
“So buyer beware. When you join Snap On you are just a glorified employee. You can even read why SBA won’t guarantee Snap On Franchise loans. If you are thinking the Snap On Tool business invest your money in a business that can earn you more then $35k a year. That is all you will make driving a Snap On truck if you make it. Don’t forget Snap On has a over 40% failure rate.”
Read More: Mobile Tool Franchise Guide
SNAP-ON TOOLS Franchise Complaints
SNAP-ON FRANCHISE Pros & Cons of Being a Snap-on Dealer
Forbes’ Praise of the Snap-On Franchise Draws Fire, Disbelief
ARE YOU AN SNAP-ON TOOLS FRANCHISE OWNER OR SNAP ON DEALER? ARE YOU FAMILIAR WITH THE SNAP-ON FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
SNAP-ON FRANCHISE Pros & Cons of Being a Snap-on Dealer
May 20, 2012
(UnhappyFranchisee.com) Snap-on Tools franchise insider “Just a number” left this comment on the SNAP-ON TOOLS Franchise Complaints post. We thought it was worthy of an upgrade to a full Guest Post.
Are you familiar with the Snap-on dealer franchise opportunity? Please share a comment below.
This is my input about being a Snap-on dealer…..
Goods:
The products are good and hold up well for the most part.
The brand name is strong.
The support is probably better then what you may get driving the other trucks.
You will make an average living if you are newer into this job.
Bads:
You will work more then 60 hours a week.
You will have an endless amount of cardboard and packing paper.
You will be a bill collector.
You will be on and off credit hold.
You will have little time or the money to take any days off.
You will get pressure from managers to keep buying tools.
You will be charged a very high interest rate on your truck and inventory loan when you get started.
You will never really own your route like they say you do. Snap on has the first right of refusal on the sale of your franchise.
You will be forced to deal with non paying customers.
Your head count of customers will always be less then it should be.
You will be forced to sign up in programs as a new dealer you may not like.
You will never fully understand how to manage your statements.
You will have tools show up at your house you don’t remember ordering.
You will have to buy merchandise to raffle off just to get your customers to pay you on time.
You will always have an asset manager telling you that your retaining too much money.
You can never sell any tools to any person outside your list of calls. Even if that person happens to jump in your truck from the street.
You can never have more then 5 routes at once.
You can’t hire anyone to help you in your truck unless that person is approved through snap on management.
You never always get the best deal when a product goes on sale.
Your management sales team will always lie to you if they can get you to buy more tools.
You will have to spend many extra hours every week checking your tool bill making sure there something there that shouldn’t be.
You will wait months for a new tool return credit.
You will spend a lot of time fixing hand ratchets, replacing screw driver blades and replacing bits on sockets. You do that for no compensation from snap on.
You will hear every story in the book from customers when they have no money to pay for there tool bill.
You will be hounded from snap on credit when something needs to be repossessed.
You are not allowed to make a profit on anything you reposses if the customer still owed a balance.
You will eat shipping cost on repairs that are still under warranty.
You will have back order problems.
You will have your garage stuffed with many tool boxes you don’t need.
You will see many of the same items on sale all the time.
There is much more to write but you get the point. Just remember one thing. You as a Snap-on dealer are never an independent business person. You are Snap-on’s runner and they control you. They put you in business and can take you out at any time. So anyone reading this thinking of becoming a Snap-on dealer. I would look another direction.
ARE YOU A SNAP-ON DEALER OR EX-SNAP-ON DEALER? ARE YOU FAMILIAR WITH THE SNAP-ON TOOLS FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
Forbes’ Praise of the Snap-On Franchise Draws Fire, Disbelief
February 28, 2012
When Jim Lager saw that Forbes had named Snap-On Tools #1 on its Top 20 Franchises for the Buck list, he was shocked… then angry.
“Snap-On? The top franchise opportunity? You have GOT to be KIDDING me!” Lager exclaimed.
Jim Lager is one of the top 10 Snap-On Tools franchisees in the world.
Despite his financial success, Jim Lager is deeply critical of the Snap-on Tools franchise program and organization.
“Forbes made a serious mistake endorsing this deeply flawed franchise,” says Lager.
“Unfortunately, Snap-on will use this undeserved ranking to recruit unsuspecting franchisees who will not fully understand what they’re getting into. For some, it will be the worst mistake they ever make.”
So how did one of the world’s most respected business publications get it so wrong?
In compiling the rankings, the writer made some of the mistakes that lead franchisees into making the wrong decisions.
Forbes Mistake #1: Average initial investment
One of the deadliest mistakes prospective franchisees make is underestimating the investment required. Without enough working capital, says Lager, a Snap-on Tools franchisee will surely fail due to the high cost of inventory and Snap-on financing.
The Forbes article states that the average initial investment for the Snap-on Tools franchise is $135,390.
“No way,” says Jim Lager, who owns 5 Snap-on Tools franchises. “The truck alone is $91,000. By the time you purchase inventory and incur other expenses, your investment will easily be $250,000.”
Snap-on Tools’ own disclosure document confirms Lager’s contention. The Snap-on Tools Franchise Disclosure Document (FDD) states “The total investment necessary to begin operation of a Snap-on Standard Franchise will range from $150,614 to $289,080.”
The Forbes Snap-on Tools ranking is based, in part, on an incorrect and misleading investment amount.
Forbes Mistake #2: Claim of “0 closures” in past three years
Franchisors are masters of cloaking their franchise failures in terms like “transfers” or “franchisees having left the system.”
Often, one must read between the lines to see how many franchisees exit the system without their investments, good credit scores or peace of mind.
The #1 Forbes ranking is based on the notion that Snap-on Tools has had no franchise “closures” in the past 3 years… and the assumption that not a single franchisee has failed.
Lager says that’s just not true.
“Unlike stores or restaurants, mobile tool routes don’t ‘close’ when they fail,” Lager points out. “When Snap-on franchisees lose their investments and leave the system, the franchisor repackages the route and resells it to someone else. It might not be a ‘closure,’ but it’s certainly a failure.”
So how many Snap-on franchisees leave or are “terminated” from the Snap-on franchise system? According to these these reports, (compiled from information gleaned from Snap-on FDDs by research firm Frandata), quite a few:
Snap-on Franchisees who “Terminated” in 2009 (pdf)*
Snap-on Franchisees who “Terminated” in 2010 (pdf)*
In fact, the 3-year total of franchises “reacquired by franchisor” is 835 for the standard franchise and 225 for the “Gateway franchise.
*Note the disclaimer on these lists of “terminated” franchisees: In some instances franchisees who have left the Snap-on System have signed agreements with provisions restricting their ability to speak openly about their experience with Snap-on. You may wish to speak with these former franchisees, but be aware that not all franchisees will be able to communicate with you.
Forbes Mistake #3: Not considering Snap-on’s dominance over its franchisees
One of Lager’s main complaints with the Snap-on franchise is the franchisor’s dictatorial control its Snap-on franchisees. While his industry experience and high sales volume has given him a bit more control, Snap-on controls almost every aspect of the average franchisee’s business, including which customers he can call on, which vendors he can buy from and if and when he can sell his business.
As we stated in an earlier post (SNAP-ON TOOLS Why SBA Won’t Guarantee Snap-On Franchise Loans), the Snap-on franchisor maintains such dominance that its franchisees are not eligible for the Small Business Administration’s (SBA) loan guarantee program. The SBA has determined that the Snap-on franchise agreements “impose unacceptable control provisions on a franchisee or potential franchisee.”
When it named Snap-on Tools #1, Forbes obviously didn’t take into account that Snap-on Tools has such control over every aspect of the franchisee’s business, the SBA doesn’t even consider Snap-on franchisees business owners.
Forbes Mistake #4: Ignoring franchisee lawsuits
Jerry Marks, of the NJ-based law firm Marks & Klein, is a franchise attorney who has represented many disgruntled Snap-on Tools franchisees.
According to Marks, one of the first places to look when assessing a franchise opportunity is the list of franchise lawsuits disclosed in the franchisor’s FDD.
After all, does a favorable ratio of training hours to startup costs really matter if the franchisees are lighting torches and storming the castle?
The 2011 FDD lists nearly 40 lawsuits against Snap-on Tools by its franchisees in the last ten years, including a class action lawsuit that was brought by the Marks & Klein firm and was settled in 2006. Marks & Klein and the franchisees prevailed, and that class action suit cost Snap-on Tools a total of $125 million dollars including $38 million in settlement fees, attorney fees and other costs.
According to the Snap-on FDD “This complaint set forth various alleged deceptive practices, sought to represent a class for current and former franchisees and independent dealers, sought injunctive relief, and contained counts for alleged violation of RICO, state statutes prohibiting deceptive trade practices, deceptive franchise practices and consumer fraud, common law fraud, breach of contract, breach of fiduciary duty and breach of implied covenant of good faith and fair dealing.”
Out of 4000 or so franchise opportunities available today, does this, seriously, sound like the #1 “Franchise for the Buck” ?
Forbes’ Biggest mistake: Not consulting franchisees (or UnhappyFranchisee.com)
Every guide to buying a franchise stresses the importance of speaking to current and former franchisees. This step is so critical in franchise due diligence, the Federal Trade Commission requires franchisors to list the franchisee names and contact information in their FDDs. Yet the franchise rankings and “top ten” from business publications rarely, if ever, bother to even consult the franchisees of the systems they are praising and endorsing.
Unfortunately, the Forbes “Top 20 Franchises for the Buck” list is certainly no exception.
We highly doubt that any writer or editor who takes the time to read our Mobile Tool Franchise Guide & Index, and the thousands of franchisee comments, will rank Snap-on Tools or any other tool truck franchise, as #1 on any franchise list.
Except, perhaps, the “Top 20 Franchises to Avoid.”
SHOULD FORBES REVISE ITS “TOP FRANCHISES” LIST? WHAT DO YOU THINK?
SNAP-ON TOOLS Why SBA Won’t Guarantee Snap-On Franchise Loans
February 10, 2012
If you are interested in financing your Snap-on Tool franchise via an SBA-guaranteed loan, looks like you’re out of luck.
The Small Business Administration has determined that the Snap-on franchise does not meet its definition of a small business.
Why? Because the SBA has determined that “appears to exercise too much control over the Franchisee such that the Franchisor and Franchisee may be considered affiliates and therefore ineligible for SBA financial assistance.”
According to the SBA (and Snap-on critics), Snap-on dominates its franchisees’ operations so completely that they are not independent business owners.
Why Snap-on Does Not Appear in the SBA Franchise Registry
According to the SBA Franchise Registry website:
The Franchise Registry lists names of franchise systems whose franchisees enjoy the benefits of a streamlined review process for U.S. Small Business Administration (SBA) financings. Loan applications for franchises on the Franchise Registry can be reviewed and processed more efficiently and quickly by SBA and its lenders because the respective franchise agreements do not need to be reviewed in each individual franchisee situation.
This is because, through the Registry process, the SBA has already reviewed the franchise agreement and has determined that there are no unacceptable control provisions by the franchisor over its franchisees. Unacceptable control provisions could result in affiliation with a franchisor that is considered to be other than small; that would mean that a franchisee would not be considered to be a small business eligible for SBA financing…
Listing on the Registry means that the franchise agreement does not impose unacceptable control provisions on a franchisee or potential franchisee (which could result in affiliation with a franchisor)…
Snap-on Tools franchise is not eligible for listing in the Registry because the SBA has determined that Snap-on franchise agreement DOES “impose unacceptable control provisions on a franchisee or potential franchisee.”
Not long ago, a franchise owner learned this fact when his bank’s application was rejected via the letter below.
Snap-on Exerts “Too Much Control Over The Franchisee” (SBA)
In 2010, a prospective Snap-on franchisee sought to get SBA-guaranteed financing. However, his bank was told Snap-on franchises were not eligible for SBA guarantees because Snap-on exerts “too much control over the franchisee.”
The bank received this rejection letter regarding Snap-on:
FRANCHISE ELIGIBILITY OPINION
{FOUND NOT ELIGIBLE}DATE: [redacted]
TO: [bank name redacted]
RE: [franchisee name redacted]
Franchisor: Snap-On
You have requested an opinion as to the eligibility of a proposed Snap-On franchise for SBA Assistance.
The controlling provision of the Code of Federal Regulations (CFR) for assistance to franchisees/licensee is found at 13 CFR § 121.103(g), which states:
The restraints imposed on a franchisee or licensee by its franchise or license agreement relating to standardized quality, advertising, accounting format and other similar provisions generally will not be considered, in determining whether the franchisor or licensor is affiliated with the franchisee or licensee provided the franchisee or licensee has the right to profit from its efforts and bears the risk of loss commensurate with ownership. Affiliation may arise, however, through other means, such as common ownership, common management or excessive restrictions on the sale of the franchise interest.
The following provisions of the franchise agreement restrict the right to profit commensurate with ownership. Those include:
- The franchisee does not receive an exclusive territory. Instead, the franchisee receives the right to purchase products from Snap-on for resale, only at the locations identified on the List of Calls.
- The franchisee cannot sell products at any location not identified on the List of Calls, even if the location is adjacent to, or near, stops on the List of Calls, or to any customer who moves to a location not identified on the List of Calls. If the franchisee wants to sell products at any location not on the List of Calls, the franchisee must request that the additional location be added to the List of Calls. Snap-on, in its sole discretion, will determine whether to add these additional locations to the List of Calls.
- Snap-on reserves the right to “adjust” the List of Calls and the number and/or location of stops on the List of Calls if it determines in its sole discretion that these changes are necessary.
- To “assist in managing cash flow,” Snap-on requires a franchisee to deposit with Snap-on a certain amount of money called the “Revolving Account Deposit.” A minimum of $25,000 is required, up to a maximum of $40,000. This provides for franchisee financing of all revolving account sales.
Therefore it is my conclusion that, the franchisee does not have the right to profit commensurate with ownership and is therefore not eligible for SBA financial assistance As a result of the CFR conflict, the Franchisor appears to exercise too much control over the Franchisee such that the Franchisor and Franchisee may be considered affiliates and therefore ineligible for SBA financial assistance.
Carmelo E. Burgos, Attorney
Why Are Matco And Cornwell Tools on the SBA Franchise Registry?
Unhappy Franchisee has featured several posts (Failure Rates of the 10 Most Popular Franchises, MATCO TOOLS Distributor Franchise) documenting the high SBA loan default rates of the three other mobile tool franchises (Matco Tools 37% default rate, Mac Tools 31.82% default rate, Cornwell Tools 42% default rate), yet 2 tools franchises (Matco & Cornwell) remain on the SBA Franchise Registry.
Matco Tools and Cornwell Tools franchise agreements both appear to share the same basic provisions and restrictions, as they too mandate and restrict franchisees to sell only to a predetermined “List of Calls,” yet they appear to be eligible for SBA-guaranteed loans.
Should American taxpayers foot the bill for the defaults in loans to franchises that do not appear to meet SBA eligibility requirements?
Can anyone account for this apparent contradiction? What do you think? Please add a comment below.
Feel free to contact UnhappyFranchisee.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.
SNAP-ON TOOLS Franchise Complaints
January 2, 2012
SNAP-ON TOOLS Franchise Complaints. The Snap-on Tools mobile tools franchise has been plagued with franchisee lawsuits.
The 2011 Snap-on Tools FDD (SNAP-ON TOOLS Franchise Disclosure Document (FDD)) lists nearly 40 lawsuits by franchisees in the last ten years, including a class action lawsuit (settled in 2006) that cost Snap-on Tools $38 million in settlement fees, attorney fees and other costs.
According to the Snap-on FDD “This complaint set forth various alleged deceptive practices, sought to represent a class for current and former franchisees and independent dealers, sought injunctive relief, and contained counts for alleged violation of RICO, state statutes prohibiting deceptive trade practices, deceptive franchise practices and consumer fraud, common law fraud, breach of contract, breach of fiduciary duty and breach of implied covenant of good faith and fair dealing.”
According to some, the franchise litigation forced Snap-on to address and fix the problems with its franchises, and become a better company.
However, others contend that major problems with the viability of the franchise opportunity and the franchisor’s attitude toward its franchise owners still persist.
jim lager writes:
They(Snap-on) does take advantage however of new naive dealers if allowed…. Snap-on loves fresh meat.
I have 5 [Snap-on] 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 don’t know many 13 year veterans in Snap-on running great numbers.
Judge writes:
they have the power to put you in business and can take you out. I been a tool man for some time now. When I talk to old timers that been in 25 years or more they all tell me the same thing. The company lost touch with what we are doing out here. It’s all about numbers and that’s it… I think these tool companies got too comfortable letting other people like ourselves do all the hard work and they just collect money.
Are you a Snap-on Tools franchise owner or former franchise owner? Do you have franchise complaints, or advice for prospective Snap-on dealers you can share?
Or do you think the Snap-on Tools franchise is a great opportunity with a dedicated franchisor?
Please share a comment below, positive or negative.
ARE YOU FAMILIAR WITH THE SNAP-ON TOOLS FRANCHISE? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
To contact the author or site admin, email UnhappyFranchisee[at]gmail.com.
More on the Snap-on Tools franchise:
SNAP-ON TOOLS Franchise Disclosure Document (FDD) January 1, 2012
Mobile Tool Franchise Guide: List of Calls (LOC) December 30, 2011
SNAP-ON TOOLS Franchise Disclosure Document (FDD)
January 1, 2012
SNAP-ON TOOLS Franchise Disclosure Document (FDD) provides prospective franchise owners with information (required by the FTC) to help them make an informed investment decision regarding the Snap-On Tools franchise opportunity.
The full 2011 Snap On Tools Franchise disclosure document (FDD) registered with the state of Minnesota is available, free of charge, below.
According to the Snap-on website:
You may know that Snap-on as the #1 professional tool brand in the world. What you may not know is that Snap-on is also a great business opportunity.
A Snap-on franchise is a mobile tool store you own, selling the #1 tool brand in the world directly to professionals on your protected list of calls. It’s a proven business model we’ve honed for more than 90 years and we are always looking for people as good as our tools.
Here are just a few of the benefits of owning a Snap-on Franchise:
- More than 4,200 franchises worldwide
- Most in-demand product in the category
- Financing available through Snap-on Credit
- Protected list of calls
- No real estate investment
- Exceptional training and support
- Proven franchise model
According to the Snap-on Tools FDD:
Snap-on Tools Company LLC (“Snap-on”) offers a license to operate a franchised retail mobile
store selling high quality repair and diagnostic tools and equipment. Snap-on manufactures
and/or distributes these tools and equipment to professional mechanics and other tool users in
the automotive aftermarket and related businesses throughout the United States.
The total investment necessary to begin operation of a Snap-on Standard Franchise will range
from $150,614 to $289,080 (See Item 7). This includes $82,350 to $148,770 that must be paid to
Snap-on or an affiliate (See Item 5).
The total investment necessary to begin operation of a Snap-on Gateway Franchise will range
from $17,925 to $83,941 (See Item 7). This includes $5,480 to $58,000 that must be paid to
Snap-on or its affiliates (See Item 5).
To read or save the Snap-on FDD, Click here:
Snap-on Tools Franchise Disclosure Document (FDD)
ARE YOU FAMILIAR WITH THE SNAP-ON TOOLS FRANCHISE? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
To contact the author or site admin, email UnhappyFranchisee[at]gmail.com.
Mobile Tool Franchise Guide: List of Calls (LOC)
December 30, 2011
Mobile Tool franchises typically provide franchisees with a “List of Calls.”
[Note: This page is a work in progress. Please feel free to suggest additions/corrections below.]
Matco Tools franchise FAQ states: “Matco Tools gives new franchise owners a “List of Calls,” which contains at least 325 potential customer names and contact information. Each territory is identified by the District Business Manager through surveys and customer interviews. This helps eliminate time-consuming cold calls, while increasing productivity and sales… Each Matco Tools Franchise has their own territory and “List of Calls,” so you never have to worry about overlapping or competing with other franchise owners.”
Snap-on franchise website states: “The very first day you start your new business, you will have an established list of calls with plenty of professional tool users within it. The list of calls each franchisee is assigned is an established, protected list that the franchisee visits each week. A solid foundation of existing and potential customers means you don’t have to wait for customers to come to you; they are expecting you to call on them.”
Mac Tools states: “One of the best things about Mac Tools is that franchisees are given a ‘List of Calls’ containing at least 325 potential customer names and contact information. Each territory is identified by the Business Development Manager through surveys and customer interviews. This helps eliminate time-consuming cold calls, while increasing productivity and sales.”
Cornwell Tools website doesn’t mention a LOC, but states: “…you will receive an area of responsibility with achievable sales potential that correlates to success… Geographic routes are assigned and surveyed by your District Manager for solid potential for new and repeat sales… Daily computerized printouts of customers at specific locations, their buying history, their potential needs, and their outstanding balances due are generated by special software available for Cornwell Dealers from an outside vendor.”
Here are some of the complaints alleged by Matco distributors and ex-distributors related to franchisees’ List of Calls (LOC). The allegations are not necessarily true, but worthy of investigation for prospective franchisees:
- Some List of Calls do not provide enough sales potential for dbrs to be successful or even sustain the minimum purchase requirement
- Some LOCs contain outdated, inflated customer counts, closed shops & shops counted multiple times
- Some LOCs contain high percentages of lower-potential customers (lube shops, road techs, tire techs, older techs, students who can buy through corporate program, etc.)
- The number of potential customers in a LOC (325) is only guaranteed at signing. That number will dwindle via attrition (shops closing, downsizing, etc.) and Matco is under no obligation to replace them.
- Some LOCs are geographically dispersed with unmanageable driving time and fuel costs.
- Distributors are forbidden to call on or sell to customers not on their LOC, even if customer requests them or is not being serviced
- Preferential treatment given to some distributors who are given leeway in calling on shops not on their LOC, others aren’t.
- Some claim Matco often prefers to put new or available customers on a LOC they can sell to a new franchisee rather than an existing distributor even if it is on their route or they are struggling
- Successful distributors had shops removed from their LOC to give to others, then were terminated when their sales declined below the minimum.
UnhappyFranchisee.com commenters provide this information and advice regarding Mobile Tool Franchise List of Calls (LOC) (If you have comments or corrections, leave them below):
Former Distr wrote:
Matco places emphasis on the List of Calls of at least 325 potential customers. One thing that may not be discussed or considered is ‘Quality’ of that list.
I have many customers that are in their 50′s and 60′s and their tool buying days are coming to a close. On the other end how many on the list are tire techs or lube techs that may never progress in the business?
Be aware of your potential customer base and their tool purchasing power, their income level, their desire to be a automotive or truck technician, many just need a job and have no desire to pursue a career in the industry. Others are truly pursuing a career.
Economic conditions vary across the country. Not sure how you can investigate it but are your customers credit worthy?
Analyze the shop on your list of calls in which these people work.
Is it just a small mom and pop shop, minimum wage/no benefits shop with a high turnover, or is it a High end progressive business, focused on quality, education and providing for future growth for their employees. These facts will help determine the quality and stability of your potential customer.
Be honest with yourself, out of the 325 potential customers, how many can afford to pay you to the terms necessary for you to survive the business. You need quality businesses with a low turnover rate.
Tommy Cheung wrote:
Signs to look out for:
- overinflated head count, go to the shops listed and count the techs for yourself, do not include road techs that are never there, for example.
- ask when you are given a shop in between distributors, and neither want goes to that shop, ask why?
- check to see if you are going all over town, because the d.m. will try to find failed shops , just for headcount.
- the d.m dosen’t visit every shop when doing a head count, some he will call and some he just copies from previous records.
Todd Allen Peterson:
Your Head Count will have close to the min. of 325 customers on your “List of Calls” Matco knows this is a low number because they want you to go out and establish more customers so they can start another guy on a route when they take them away from you. 325 customers in a none established route is a joke. I promise you will not be in the top of Matco Distributors unless you have around 500 min. to call on because the top guys every year have that many. If they say they only have 350 on their list of calls they are paper trailing some of their other accounts…
richard on November 27th, 2011 8:28 pm wrote:
i have seen… other distributors were allowed to have customers, big spenders, in my area but we were told that we had an assigned area but i was told that we didnt have specific ares just a list of calls but i couldnt go in another distributors area to solicit from someone that he did not go to… there is too much greed and corruption going on here to even imagine for most people to comprehend… i have reported other distrubutors selling out from under me but it was okay because they were one of the good ol boys. you complain .they tell you to grow up. you try to play the way they play and its against the rules. its all bs…
Debbie*Lady Matco on November 30th, 2011 5:25 pm wrote:
Matco promised 325 potential customers. NOT delivered – my List of Calls – is supposed to be certified mechanics that must purchase tools to do their jobs. MY list is HIGHLY inflated and I have IN WRITING the proof to back it
guest2 on December 1st, 2011 2:18 am wrote:
I… drove my list of calls and reviewed all documents before signing and knew what I was getting onto. You still have to treat this as YOUR business and those distributors that do that do fine.
Former Distr on December 7th, 2011 10:17 am wrote:
I have my list of calls in front of me, the one that Matco will probably give to any prospective franchisee that is interested in my old route. The one that I provided to my Lawyer.
How can I service 80% of my route when
-3 shops, totaling 47 prospective customers are listed THREE times
-6 shops closed totaling 18 prospective customers
-employee counts are off by more than 20 people
- 6 shops were given to another distributor to call on – 26 prospective customers
PROSPECTIVE FRANCHISEE’s – DO NOT Trust the ‘List of Calls’. I don’t remember how much time you are given the list in advance of signing papers, but VISIT EACH AND EVERY SHOP ON THAT LIST PRIOR TO SIGNING!
In addition to the problems above, I had 3 shops on one road that REFUSED to allow Matco Tools in because of the previous Distributor.
Make sure you know how many in each shop actually buy tools. There is a difference between a ‘mechanic’ and a ‘tire tech’. Check for the number of ‘students’ working, they will not buy from you, they will buy through the Matco Tech Ed Program, that goes for Instructors too, I have three of those in my area, they also buy direct from the Tech Ed Program.
Relentless on December 8th, 2011 10:45 am
Wow! These statements imply that we have territories with our “List of Calls”. So we don’t have to Overlap. Very Interesting. Kind of implies you can call on shops as long as their in your territory.
Why would Matco tell you this to get you to sign and go to training, then when your successful come to you and make you give up the shops you established with your DM. My RM told me they were unsecured and I didn’t have a territory I had a “List of Calls” and if I didn’t comply “Yes” I could be terminated.
By the way this Distributors route was laid right over the top of me since I had established the shops and not gone off my route. Kind of contradicts the above statement. Don’t you think?
Former Distr on December 14th, 2011 11:47 am
The whole basis of your potential business is that List of Calls, and they neglect to even know if it is valid. I have written proof that it is a ‘fabricated’ list, and that no one ever personally visited the ‘calls’ to verify they were in fact even a business at that location. This is fraud that goes all the way to the top.
Bob Tremblay on December 16th, 2011 7:40 pm
I became a Matco distributor in 2007. when seeding my route with my DM I found shops that were not on my list of calls a couple were not being serviced and he stated I could service them and he would add them to my list of calls. several other ones belonged to another Distributor.
when I finally got into my route I found out several of my shops here taken away from a couple other distributors. This did not make them happy and made it difficult for me to do business with them. I also found out that my route was made up from a distributor that matco had terminated. he had 3 routes then downsized and went back to 1 route keeping the best shops. The portion of the route I received was the portion that he found to be unprofitable and wouldn’t service any more. Thats why Matco terminated him.
Debbie Solko on 2011/12/30 at 3:02 pm wrote:
Economic conditions of a area MUST be considered! Regardless of the stories otherwise, one MUST consider the reality of the buying ability of their potential customers. Research the average income of your prospective techs. As simple as a phone call or looking in the Want Ads If the local shop is only offering $10 – $12 hour and it I’d FLAT rate- How much will REALLY be left for these guys to buy tools ?? I know guys that simply can’t afford a $25 weekly payment Hell that is $100 bucks a month! Then there are the techs on a LOC that are seasoned veterans, they have a lot and NEED LITTLE! Ask yourself can you really get 200 of the guys that make so little to spend $25 week, every week?
Former WI Distributor on 2012/01/01 at 4:07 pm wrote:
I was with Matco for over 8 years and forced out due to low purchase average. After losing 15 – 20 shops in my territory I could not keep up with the economic downturn. After asking multiple times for an expansion to my route since the one next to me was vacant…I was shot down. My customer count (True) was in the area of 200-225. The new distributor now has both routes. I had to call on vacant areas 20 miles way to keep my TP going. My first 5 years were the best but when I started losing shops and asked for help I was thrown to the curb. Now after losing over $150k, Im determined to follow through with this lawsuit.
Matco has many fraudulent ways of doing business with all the risk on the Distributor…
[Note: This page is a work in progress. Please feel free to suggest additions/corrections below.]
ARE YOU FAMILIAR WITH MOBILE TOOL FRANCHISES? WHAT SHOULD BE INCLUDED IN OUR FRANCHISE GUIDE? SHARE A COMMENT BELOW!
To contact the author or site admin, email UnhappyFranchisee[at]gmail.com
