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.
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