The Experimac Franchise Disclosure Document (FDD) indicates that United Franchise Group’s used computer repair franchise system may be heading for a crash. Will Experimac be the next UFG franchise to have been hyped, promoted, and then quietly disappear?
The 2019 Experimac Franchise Disclosure Document (FDD) has been submitted to state agencies, and the picture it paints isn’t pretty.
According to our original research and disclosures from United Franchise Group (UFG) disclosure documents:
- Experimac franchise stores have closed in as many as 22 states.
- Franchisor income declined 52% from 2017 to 2018.
- Median franchise store sales are less than $300,000
- Experimac Franchising LLC has been hit with its first franchise lawsuit
- The franchisor must change its trade name to Experimax as a result of a trademark dispute with Apple, Inc.
We outline key points below. You can read the entire 2019 Experimac Franchise Disclosure Document (PDF) here.
Experimac Franchising LLC Income Declined 52% From 2017 to 2018.
According to the Experimac Franchising LLC audited financial statement:
- Franchise fee revenue declined 53% from $4,012,093 in 2017 to $1,883,962 in 2018.
- The franchisor’s revenue from product sales declined 68%, from $7,007,413 in 2017 to $2,248,251.
- The franchisor’s overall revenue declined 52% from $12,449,439 in 2017 to just $6,022,962 in 2018.
Experimac Franchise Store Median Gross Sales: $281,747
That’s a 13% decline from the median 2017 sales for franchise stores listed in the 2018 FDD ($324,773) and 85% less than the gross sales of $1,834,861 prospective franchisees were told Jim Muir’s original store generated in his third year in business.
The median number is significant as the average appears to be skewed upward by a few high volume stores (the highest being $822,375).
While the average gross sales for the 34 franchise stores is $410,639, nearly 60% of the franchise stores generated less than $281,747 with the lowest generating $144,297 ($12K per month).
Excluded from the Item 19 Franchise Performance Representation are the 18 franchise stores that closed in 2018. States the FDD: “Of the 18 franchise outlets excluded, 3 closed in 2018 after being open for less than 12 months.”
Experimac Stores Closed in 22 States Since January 2018
Experimac Franchising LLC reports that 18 franchise stores closed in 2018, leaving just 100 open at year end (We counted 85 listed as open on the company website 3/13/19).
The 2019 Experimac FDD indicates that franchise stores ceased operations in California, Colorado, Connecticut, Florida, Kentucky, Louisiana, Missouri, North Carolina, Ohio, South Carolina, & Texas.
Additionally, we suspect that since January 1, 2018, Experimac franchise locations have also ceased operation in Arizona, Georgia, Illinois, Minnesota, Nevada, New Jersey, New York, North Dakota, Tennessee, Virginia and Washington.
In the last 16 months, it appears that Experimac franchise investments have been lost in at least 22 states.
See our Experimac Franchise Closed Store List for updated franchise failure data and comments.
Experimac Franchise Lawsuit Filed
The 2019 Experimac Franchise Disclosure Document (FDD) contains the first Experimac franchise lawsuit the company has disclosed.
Experimac franchisee Glenn Trommer has filed an arbitration claim alleges Experimac Franchising LLC made fraudulent misrepresentations, breached the franchise agreement, engaged in unfair or deceptive trade practices and more.
According to the Experimac FDD:
ITEM 3 LITIGATION
A. Pending Litigation: Avivah Digital Commerce, LLC, and Glenn Trommer v. Experimac Franchising, LLC, (AAA Case No. 01-18-0001-7801, Palm Beach County, Florida) Filed on May 3, 2018.
A franchisee of the Company, Glenn Trommer, filed an arbitration claim against the Company alleging the Company breached the franchise agreement, imposed unreasonable performance standards, made fraudulent misrepresentations, engaged in unfair or deceptive trade practices and fraudulent inducement, and seeking damages, rescission, declaratory relief and attorney’s fees and costs.
The matter is in the discovery phase.
B. Litigation Against Franchisees Commenced in the Past Fiscal Year: Suit for Declaratory Relief: Experimac Franchising, LLC v. Glenn Trommer, (Case No. 502018CA013392XXXXMB, Circuit Court, Palm Beach County, FL) Filed October 22, 2018.
Experimac Franchisees Who Left The System
The Experimac Franchise Disclosure Document includes contact information for current Experimac franchise owners, as well as these owners who had their franchises closed, terminated, reacquired or transferred:
|Taylor Rash||Gilbert AZ||Tim Holder||Joplin MO|
|Chris Thomas||Chico CA||Daniel Boisse||Fayetteville NC|
|Santa Ana CA||Gustav Bone||Greenville NC|
|Andrew King||Temecula CA||Lisa Piatt||Huntersville NC|
|Arvada CO, Fort Collins CO||Okechukwu Nwanna||West Hempstead NY|
|Patrick Wentland||Colorado Springs CO||Eliza Mallue
|George Leonis||Highlands Ranch CO||Chris Knight||North Charleston SC|
|Matthew Rusconi||Manchester CT, Rocky Hill CT||Hemanth Sehgal||Dallas TX|
|David McCollister||Gainesville FL||Travis Weaver
|Cumming GA||Laetitia Rohfritsch||Strasbourg, France|
|Mark Simmons||Smyrna GA||Julian Nieuwoudt
|Cape Town, South Africa|
|Donald Dixon Jr||Lexington KY||Reynart De Beer||Sandton, South Africa|
|Alexandria, Bossier City, Shreveport N,
Shreveport S, Longview TX, Tyler TX
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