SNAP-ON TOOLS Franchise Complaints
January 2, 2012
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
Per lawsuits. 40+ is just what is listed in the FDD. Go backover 25 years and there are probably over a thousannd lawsuits against snap-on.
Selling your business?? 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 nieve 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.”
I would like to hear from the Veteran dealers, Snap-on, Matco, Mac anyone. These Franchisors are bullies. If we don’t stand up to them they will walk all over us. If you want to retire someday or maybe your route has shrunk over the years and you can’t get any help then you need to stand up and confront them. Snap-on doesn’t like me much because I have grown to a size that I can stand up to them. they don’t like it but I have had success getting Snap-on to change the rules for me where they don’t for other dealers.
Does everyone understand when you buy a route from Snap-on they apply your business credit to your personal credit. No bank does this. Snap-on does it so you can’t go buy anything. they want to tie you up and keep all of your money going to them and no one else. Your debt to income ratio destrys your ability to get even the smallest loans.
Snap-on will own you for years. Oh yeah, Snap-on has pre payment penalties on their loans. Who does that today. No one but Snap-on. Again Snap-on has you tied up until they want to cast you aside. When they cast a young or veteran dealer aside it will not be pretty for that dealer.
If you havent noticed I don’t intend to give my succesful business away. My goal is to force Snap-on to participate in building real value in our franchises that we as dealers can prosper and some day sell. Snap-on will have to listen to us if we all stand up to them.
Jim you bring up some great points. Snap on tells there new prospects ” buy a franchise, be your own boss, own your own list of calls, one day you can sell those list of calls for a retirement”. I guess selling a route isn’t that easy? So Jim is snap on only interested in dealers buying tools from them and don’t care about dealers ra? Do you know any dealers that did get blue sky? How much did they get? I can say one thing you are not your own boss running a truck. I say that because if you don’t see all your stops the phone rings from your BM. You don’t buy enough merchandise you get another call from your BM. Your sales numbers change another call from your BM. Your paid sales change another call from your BM. It goes on and on. My point is if you are your own boss then why is someone calling me asking me what’s going on? Just like fixing ratchet heads. I spend about 15 minutes a ratchet and fix about 12 ratchets a week. That’s about 3 hours a week. I get zero for my time fixing these stupid things and I have to invest in about $100 in ratchet kits. Just like tool box slides. I must do about 1 set of slides a week which takes me an hour to do. So now that’s 4 hours I’m working for free. So they say we need to do $10k a week to do well. That is 2k a day which comes out to $250 hour if you calculate 8 hour day being in shops and not commuting time. So if I waste 4 hours a week that is $1000 a week. In a year that is $52000. In 5 years that is $260000. In 30 years that is 7,800,000. Holy crap… That’s alot of money lost. If a dealer spends more time then me every week just fixing ratchets and replacing tool box slides is out of more money. Now that time doesn’t include replacing bits, screw driver blades and repo tool boxes. What I think is being a snap on franchisee is actually an undisclosed employee for the company that doesn’t collect a paycheck.
[...] SNAP-ON TOOLS Franchise Complaints January 2, 2012 [...]
I got some good things for you Jim. How about snap on sending us a product today then we try returning it the week after and it is non returnable? Or things like diagnostic tools non returnable at all? I got another one, how about a customer writes you a check to pay snap on credit you go ahead send the money because it has to be in asap and then you get a returned check for no funds? Then you have to chase customer to get paid again because you already paid his snap on bill with your money?? I will post more later. I like to hear comments from other dealers on what they think…..
I have another that may create some attention. You get loaded up on tools from managers saying you have to buy because its a great deal. You say well maybe I shouldnt because my tool bill is already high but I hate to turn up a good deal. Well shortly later your account is over its limit and now you cant buy any tools and now you cant even service your customers on tools they need replaced. You go ahead and send a new return to get your acct in order and decide to send back all those great deals that really just got dumped on you. Can you believe it takes me sometimes 6 or more weeks to even see the credit on my statement… How the hell is that gonna help me at all if my acct was in trouble 6 or more weeks before that??? And the funny thing is you tell managers ” maybe I shouldnt buy these deals because my acct is already high..”. They say ” Its ok just return tools if that happens and we will work with you” I dont think so because no manager has even offered to help me with returns and 6 or more weeks for a new tool return credit… Come on give me a break… I could have walked it there punched in the #’s myself and walked home a few times over and I live hours away by vehicle to my distribution facility.
I am still new with snap on. I am young and have many years of work ahead of me. I think snap on has the best tools in the world. I like what I do but there are some things that need to change. I think with some fine tuning this company could be the best franchise in the world. I like to help out and this association idea you have Jim looks like a great idea.
Dealers
go to http://www.snapontoolsdealerassociation.com
This is a forum of dealers sharing ideas of increasing profits as well as a forum that will make Snap-on stand up and notice we won’t take their abuse anymore. Buy a Snap-on franchise if you want a 12 hour a day job, 6 days a week that pays maybe $60,000.00 a year. Add on the risk of loaning your money to every Tom, Dick and Harry and then in the end when you attempt to sell, Snap-on devalues your business to the point of financial loss. Go to this web site to share and help make a difference.
Hey me franchise fooled.
I don’t know of anyone getting blue sky. In fact Snap-on controls your ability to get outside financing by placing a 1st lien on your business. 2nd. Take a look at
Snap-on’s schedule 1. This schedule lists everything one can sell with their franchise. There are only two items however you can get financed. 1. NEW tools and 2. R/A as long as it does not exceed $55,000.00. Snap-on will not finance anything more than that. Not your truck, not your computer, not your used or discontinued tools. Not anything. Of the $25,000.00 required as a down. Snap-on gets it all. Not one bit can go towards anything else. Do not plan to retire from Snap-on.
Hey all,
This sucks, as you have invested so much, I am not a franchisee, but can you use alternate financing that needs no credit for your customers. Or as it seems, snap on controls everything, and if you are stuck with only there financing, you guys are in a pickle and I hope you all good luck.
Brad
Today, Snap-on Tools franchisees sell far more than just wrenches. They offer over 22,000 products, including hand tools, power tools, diagnostic tools, tool storage and shop equipment, but the way they sell is much the same. Once a week they bring their “mobile stores”–trucks filled with their products–directly to their customers, which include car dealerships, mechanics, marinas and airports.
That is really what the trucks do every week. My problem is the 5% of the business we don’t understand and what burrys dealers. Jim and unhappy bring up some great points. I always felt going into a tool franchise was a bit fishy. Now it looks more like a scam. Lucky for me and the rest that understand. Shame on you snap on. Joe Johnson wanted to innovate tools too make jobs easier for techs, not screw people. The man is probably turning over in his grave.
I continue to get a laugh from the chants of “Matco is #1!”
One of the Matco Old Boys Club actually uses it for a screenname!
Take a look here: http://www.unhappyfranchisee.com/mobile-tool-franchise/.
All of the tool companies have tons of complaints, have been sued or are getting sued. The whole category sucks for distributors. If you are talking about most online complaints, Matco is definitely #1.
How moronic is it to claim to be the best of 4 bad choices, especially if you aren’t even the largest, oldest, or sell the most?
Snap-on is considerably larger, has more distributors, sells more tools, has a longer history and has a much stronger brand name, both in terms of recognition and respect. Snap-on is clearly bigger, stronger than Matco, but still it sucks and has been sued even more (though Matco will catch up soon. Thanks to Jerry Marks).
Think of it this way, bragging that “Matco is #1″ is like running down the halls of the hospital yelling “Cancer is #1! Cancer is #1″
“Wait a minute!” says Heart Disease. “We kill more people! We’re the leading cause of death. We’re #1!”
“No way!” says CANCER#1. “A magazine we pay says Cancer is #1. They give no rationale or reason, but it’s in a magazine so Cancer is #1!”
It doesn’t really matter whether heart disease, cancer, stroke or respiratory disease is #1, its wise to avoid ALL of them.
The same could be said for the leader Snap-on, Snap-on wannabe Matco, Mac or Cornwell.
So which is the best mobile tool franchise?
Independent Dealer is #1!!!!!
These FDDs are pretty lengthy, but there’s some interesting stuff in them. I am reading Snap-on’s FDD, specifically the completed franchisee litigation of the past decade.
http://www.unhappyfranchisee.com/%ef%bb%bfsnap-on-tools-franchise-disclosure-document-fdd/
It looks like franchisees prevailed in every one of the 26 or so settled cases. Check out these amounts:
Mike Barnes v. Snap-on Incorporated (OR) Snap-on agreed on January 30, 2007, to pay Barnes $87,500.00
Tim Barnes v. Snap-on Incorporated (OR). Snap-on agreed on January 31, 2007, to pay Barnes $75,000.00
George Brenski v. Snap-on (IL). An award was granted on June 28, 2004, in favor of Brenski for $80,000.00 plus fees and expenses.
Luis Canaveral v. Snap-on Incorporated (FL). May, 2007 Snap-on paid Mr. Canaveral $82,500.00.
Darin Canetti v. Snap-on Tools Company LLC, Snap-on Credit LLC, Bart Wignall, Michael Montemurro, Nicholas Loffredo and David Pence (NJ). December 2007… Snap-on paid Canetti $240,000.00
Brian Casey v. Snap-on (NJ). Award granted on July 13, 2004, in favor of Casey for $314,608.00 plus arbitration fees.
Scott W. Copperthite v. Snap-on Tools Company LLC (CT). December 2007 Snap-on paid Copperthite $60,000.00
Ronald DeSantis, Matt Setser, Shawn Dickmeyer, William Bradley Freeman, Scott Factor, Scott Ingenito, Aaron Reeves, Anthony Hobby, Dwight Lankart, Richard Fortuna, and Paul Vladyka, on behalf of themselves and others similarly situated, Plaintiffs, vs. Snap-on Tools Company LLC, Snapon Credit LLC and Snap-on Incorporated, Defendants. Snap-on recorded a $38,000,000.00 pretax charge in the second quarter of 2006 representing its best estimate of the costs to settle this matter, including attorney fees, costs and expenses.
The total that Snap-on paid franchisees in just these 8 cases totals $38,829,608
Snap-on’s FDD reveals that in the next 8 cases of franchisee litigation, franchisees won every case also
http://www.unhappyfranchisee.com/%ef%bb%bfsnap-on-tools-franchise-disclosure-document-fdd/
The next 8 cases, Snap-on had to pay disgruntled franchisees $898,000
Michael Dittfield v. Snap-on Tools Company July 16, 2004 Snap-on paid plaintiff
$15,000.00.
Mark S. Foster v. Snap-on and Snap-on Credit LLC May 18, 2005… Snap-on paid Plaintiff $60,000.00.
Francisco Franco v. Snap-on Tools Company and Snap-on Credit LLC (NJ). Snap-on paid Franco $500,000.00
William Bradley Freeman v. Snap-on Tools Company LLC and Snap-on Credit LLC, Michael Montemurro, David Spence and Bart Wignall (FL). June, 2007 Snap-on paid Mr. Geisel $210,000.00
Gary Geppi v. Snap-on Tools Company LLC, Snap-on Credit LLC, Michael Montemurro, Rich Meyers, Michael Ward, Rich Fitzhugh, Gary Huether, Frank Steffens and Jeffrey Howell (NJ). June 22, 2005 Snap-on paid Geppi $25,000.00.
Jeffrey Goldwasser v. Snap-on (NJ). April 25, 2005, pursuant to which Snap-on paid $50,000.00 to Goldwasser and his wife, Abbeye Goldwasser
Paul Harz v. Snap-on Tools Company and Snap-on Credit LLC (NY). October 1, 2005, Snap-on paid Harz
$23,000.00
Justin Hemker v. Snap-on (MI). March 1, 2004, in which Snap-on paid $15,000.00 to Hemker.
That means that the total of the first 16 cases alone amount to $39,727,608 that Snap-on had to pay its franchisees. Gosh, that’s a lot.
Do you think that these disgruntled franchisees have any idea about this? Do you think their attorneys know about these settlements from a competitor with basically the same model and franchisees with very similar complaints?
Continuing to read the Snap-on FDD (gosh, this legal stuff gives me a headache!). If I’m reading this correctly (no promises!) reveals that in the next 8 cases of franchisee litigation, franchisees won every case also
http://www.unhappyfranchisee.com/%ef%bb%bfsnap-on-tools-franchise-disclosure-document-fdd/
In these 9 cases Snap-on had to pay its unhappy franchisees $734,500
Perry E. Littlejohn and wife, Betty H. Littlejohn v. Snap-on Tools Company. December 2006 Snap-on paid the Littlejohns $50,000.00.
Peter LoRe v. Snap-on (NY). June 29, 2005, pursuant to which Snap-on paid LoRe $45,000.00.
Kevin Meehan v. Snap-on Tools Company (NJ). Snap-on paid Meehan $315,000.00.
James Miller v. Snap-on (CA). October 2, 2002, pursuant to which Snap-on paid plaintiff $53,500.00.
Christopher Palmerini v. Snap-on Tools Company and Snap-on Credit LLC (NY). June 6, 2005, paid Plaintiff $50,000.00.
Michael T. Rowley v. Snap-on Incorporated (OR). July 2007 Snap-on will pay Mr. Rowley $150,000.00.
Lee A. Smith v. Snap-on Tools Company (IL). September 29, 2006, Snap-on to Smith of $30,000.00.
Bryan Van Curen v. Snap-on Tools Company LLC and Snap-on Credit LLC (NJ). July 15, 2005 Snap-on paid Van Curen $23,000.00
George Wutz v. Snap-on Tools Company LLC, Snap-on Credit LLC, Michael Montemurro, Robert Jaros, John Doe Field Managers 1-20, Steve Schmidt, Dave Cimermancic and John Doe Branch Managers 1-10 (IL). December 12, 2005 Snap-on paid Wutz $18,000
If my reading is correct, that means that Snap-on has paiid out more than $40 MILLION to unhappy franchisees like Tommy, Debby, Todd, Former and the rest of this gang! Yikes! That’s a lot of money!
What’s weird is Snap-on was always called #1 until they started getting pounded by all these lawsuits.
Sure seems like the courts are symapthetic to unhappy tool franchisees!
Sure seem like these lawyers have had a lot of practice successfully suing tool companies on behalf of unhappy franchisees.
Do you think that’s what’s about to happen to Matco? Gosh I sure hope not.
I’m sure MATCO#1 and the OBC gang can explain that the Snap-on situation was NOTHING like the Matco situation is now.
Thank god there are just a handful of unhappy Matco franchisees out there, or this could be a real situation. Especially as it seems that the franchisor DIDN’T WIN 1 CASE (at least by my layman’s reading).
So I have a long history much of it good with Snap-on tools. There is no doubt that opportunity exists with Snap-on. What makes Snap-on successful is that 95% of what Snap-on does is great. What I have learned over the years is that 5% of what Snap-on does ,takes advantouge of dealers and limits their abilities to grow and prosper while that same 5% enriches Snap-on.
Because of this I started a website. http://www.snapontoolsdealerassociation.com.
Because of this website a representative came and met with me at the kickoff and we agreed on some things and disagreed on others. He asked me why I didn’t use this forum on the Snap-on tools discussion board. My answer to this is it needs to be public for the whole world to see. I want this website to be a place that encourages two sides to the story and effects positve change to make, if possible, Snap-on tools a better opportunity for dealers.
My Biggest problem with Snap-on is that Snap-on has limited my ability to sell my business for any value. I have many solutions that need to be discussed. I hope other dealers feel the same way. If not, or you disagree please sign up and discuss your point why snap-on is great or not so great.
http://www.snapontoolsdealerassociation.com
During discussion with snap-on representative about the blockades Snap-on places in front of dealers from gaining profit in sales of their franchise, he claimed, for us to expect much at all in selling your business for any value would be going against national trends. Snap-on says statistics show that 80% of all businesses never get sold. They just go away. Yet they teach equity and blue sky in growing your business to buy more tools. Do they expect us to just walk away from our business some day. Snap-on could make this a better opportunity for the dealer. It is their choice to increase a dealers success rate, profitablitiy and the eventual liklyhood of a profitable sale. I would like to see statisitics out there about businesses. how many Tool dealers of any brand sell for a profit their business?????
To answer Brad about Alternative financing, yes you can get outside financing but it is nearly impossable to get. Snap-on tools places a 1st lien on your business if you go outside. Unless you have unbelievable resources to put a bank in a better financial position you will not get outside financing. Understand Snap-on’s business model for their customers is very similar for their dealers.
Snap-on business model is selling tools to blue collar, lower income and educational individuals who can not attain financing for their tools so they buy very expensive tools from Snap-on because of the interest free accounts that Snap-on dealers(not Snap-on) carries. Its a great plan for Snap-on. Snap-on reaps the sale at the risk of the dealer and the customer gets a good tool at very top dollar prices.
bringing a dealer on to Snap-on is very similar. Young individual with limited educational and financial resources will do just about anything and trust Snap-on in order to have a chance to own his own business.
Great business plan if you are a shareholder of Snap-on.
All Snap-on dealers. go to http://www.sears.com/snap-on-tools
Snap-on is now being sold to one of our biggest competitors. Do you think this is a good thing for the value of a franchisee dealer? Doesn’t seem like we have exclusive territories anymore.
[...] you are interested in financing your Snap-on Tool franchise via an SBA-guaranteed loan, looks like you’re out of [...]
Please read and comment on this new post:
SNAP-ON TOOLS Why SBA Won’t Guarantee Snap-On Franchise Loans
The SBA has determined that Snap-on exerts “too much control over franchisees” (specifically by maintaining a List of Calls) to be eligible for an SBA guarantee on its franchisee’s loans. Basically, the SBA is saying that Snap-on franchisees aren’t really independent business owners, just affiliates of Snap-on corporate.
However, Matco Tools and Cornwell Tools also control franchisees via a List of Calls, yet both are still on the SBA registry. Both also have very high SBA loan default rates, 37% for Matco, 42% for Cornwell.
Shouldn’t the SBA be excluding Matco and Cornwell also?
PS Thanks to the unnamed reader who contributed the SBA rejection letter.
I guess only having 200 customers is what makes it more risky too. Not enough customers can only lead too a dying route. Shame on you snap on.
Being an ex-field manager, I know that any good field manager would lie on a list of calls to get a dealer more then 225 because all managers know that 225 will not support a tool dealer. In fact seldom does a field manager do a list of calls. Almost all of my list of calls have been generated off of prelists not by a field manager going out and counting heads. Snap-on wants to put feet on the street. The smaller the route the more trucks they can put out there.
I wonder if we can get failure stats on Snap-on dealers. They control 99% of all financing through Snap-on credit. It is extremely over priced. Snap-on even controls the truck loans. When a dealer fails I imagine they can control how that loss is taken on the books. Would be very difficult to get a reeal number I think.
Even so the ammount of control snap on has on dealers is tremendous. You as a dealer have too collect there money, repo tools, buy into there programs, have merchandise show up at your door you never ordered. The list goes on and on. That is probablly why SBA says they aren’t intrested.
Jim good luck getting that number. I’m sure snap on keeps those numbers hidden in a vault in fort knox…
Snap on probably likes charging dealers up the ass for loans too. My first year I was charged over $7k in my starter inventory loan. It is a 10 year loan so after it’s paid I basically paid double for the merchandise. Which really is a loss all around. Plus the rates are over the hill.
Dear snap on tools,
Your dirty little secrets will be revealed soon and what you do too dealers. You do nothing but control people and they make you rich while you make them poor. The truth will be heard.
Shame on you for lying and being sneaky.
You sell something on extended credit as a snap on franchisee. Something like a tool box.The minute your customer stops paying snap on credit calls and harrases you too pick up merchandise. The phone won’t stop ringing either. It’s like a debt collector calling you except it’s for a debt that isn’t yours. So you finally give in and pickup merchandise.
You and your business manager discuss fair market value on item. You agree too the fair market value and buy back merchandise for the price agreed. Then any money still left on the existing loan I get charged back 25% of the remaining balance. I later sell the repossessed merchandise for a little more then what I bought it back for. Maybe I got lucky or the price I bought merchandise back for was a little less. Either way time is money and making a a few bucks later should be ok.
So later you sell the merchandise on another credit sale for a little more. A few weeks later your phone rings. It is someone from snap on credit. The person on the phone asks you if you resold the merchandise you took back from John doe. You reply ” yes it is”. The person from credit says ” you sold merchandise for a little more then what you bought it back for”. Your answer is ” yeah I must have gotten lucky and managed too make a few bucks considering my time for taking back merchandise, fuel, cleaning and storing merchandise did end up giving me a little at the end.”. The next part is bad news for me. Person at credit says ” i am not allowed too make profit on merchandise I reposses.
So what that means since there was a balance still owed on old contract which there was in this case. Any profit I made on next sale snap on credit is gonna take from me. I am furious about this and have made it clear about my anger in this foolish system. This is probably another example why SBA looks at being a snap on dealer an associate of snap on.
Big question too all readers?…. Does anyone think this is a screwed up thing snap on does too there dealers?
being a former franchisee of snap-on,I pity anyone who by today’s standards gets involved with a franchise tool route.It is geared strictly for corp.I am a casualty of the “more feet on the beat program” this program cost me in excess of 400k,just trying to build/bail out my business.It has no support since the realignment of managers and call center.. they put you in debt beyond your wildest dreams and expect you to support the business.i am posting this only because of the subject of repo’s.a word to the wise,I don’t know the laws around the country,but you have no legal right to go in and repo any thing for yourself or snap-on tools.they tell you you have a right and produce a”letter of harmless” but that is only for the shop owner not for you..they rely on your customer rapore to make a “voluntary repo”. there have been cases where a franchisee was arrested for taking a customers tool box,because the customer was not there to sign the fmv sheet ,but gave a verbal ok because he no longer worked at that location..so be very careful not to take anything unless the customer is there and willing to sign a fmv sheet
Former franchise
There is help out there and you deserve to be compensated. http://www.mobiletooldealersassociation.com is considering the possibility of class action lawsuit agaist Snap-on. It sounds to me like you could use help individually. Contact Jerry Marks an attorney from New Jersey. He has succesfully sued Snap-on multiple times. Right now there is no good tool dealer opportunity. The Tool companies have become too greedy.
Former franchisee. Check this forbes report out. It will burn your ass.
Not getting paid what you’re worth (or not getting paid at all) and want to start your own gig? For those who don’t have the patience, capital or guts to generate sales from scratch, franchising can make a lot of sense—though not all brands deliver the same return on investment.
With the help of Robert Bond, chief executive of the World Franchising Network (a franchise database) and publisher of Bond’s Franchise Guide, we waded through data on 110 of the most established names to find 20 that competent operators should consider.
The methodology is based on five variables: average initial investment (franchise fees plus equipment costs); total locations (the more the better); closure rate (the number of closings in the last three reported fiscal years divided by the total number of existing locations); growth in the number of U.S. outlets in the last three years; and the number of training hours as a percentage of startup cost (the more support from the home office, the better). Overall footprint and survival rates carried the most weight. We did not include royalties paid to franchisors because they ranged in a tight band and thus barely affected the overall rankings.
Watch the bullshit that your about to see.
1. Snap-on
Kenosha, Wis.
These stores-on-wheels sell tools to professional mechanics. Each Snap-on truck comes equipped with a computer, wireless Internet access and a DVD player for product demonstrations.
Average initial investment: $135,390
U.S. locations as of 1/1/11: 3,392
Closures (last three fiscal years): 0
Hours of Training: 191
Wow, what a bunch of shit. Average initial investment of $135,390 does not include truck. that will be another $91,000.00 at 12% financed by snap-on.
Closures 0. really zero? Are you f…ing kidding. I have in my posession a list off all the dealers that left in the last 3 yrs. Its hundreds. No doubt because Snap-on does 100% financing in-house they cook the books. This is a blatent lie and proves that Snap-on is the master of deception. forbes should be ashamed for printing this article. Mac tool dealers, franchise and you will give Mac to follow in Snap-on’s foot print. No wonder snap-on won’t let us sell our routes. they want to turn routes on the cheap and control their own margins and statistics.
My big question is if snap on is the #1 franchise then why does FDA not recocnize us as being a successfull business? The FDA feel the franchisor controls too much of the franchisees business. I don’t know how they can say no dealers left in the past 3 years when I know of at least 8 in the past year alone. The whole thing is a scam.
Snap on dealers reading. Check out http://www.mobiletooldealersassociation.com. We like you to sign up and voice your opinions about how you feel about snap on. Good and bad story’s. Even post things you like to see changed. We may be able too be more profitable by working as a team.
http://www.mobiletooldealersassociation.com…. Please join all dealers reading…
http://www.mobiletooldealersassociation.com
I was scammed
I know you meant SBA not FDA. Here is a copy to the forbes link. wow what a scam. this is not even close. http://www.forbes.com/sites/jjcolao/2012/02/08/top-20-franchises-for-the-buck/
Read and comment. Forbes needs to be called out on this. This writer either got paid by Snap-on to lie or did no research at all. what a joke and Snap-on is creating huge press releases.
Oops I meant SBA… Typing too fast.. Thanks Jim
Do all snap-on dealers know Snap-on makes a profit off of all our credit card fees by Chase paymentech. I didn’t know that until recently, but they do. We pay a higher rate so snap-on can make money when we run a credit card for payment on one of snap-on’s credit accounts. hmmmmmmm??????
Is that ethical???????
I say it is unethical Jim. Snap on likes to reach how they do things ethically. Hmm… Another lie.. Doesn’t surprise me..
How about hot tools. Snap-on also makes a profit when we are forced to buy that from outside vendors. On top of being gouged on hot tools, it sets pricing so we are forced to discount even when a dealer doesn’t participate in the RAD or FDO programs. when dealers know and understand how snap-on gouges us all dealers of all levels of success will jump on board and join forces against these companies
Join http://www.mobiletooldealersassociation.com and share your thoughts.
I know this is a Snap-On forum but I would like to compare Matco’s new tool program. Matco has a voluntary program that you sign up for regarding new product releases. You, as a Distributor, select what program you want to be part of. We, as Distributor’s, want to know what the newest product out there is so SUCCESSFUL Distributor’s will participate. Matco takes advantage of Distributors by coming out with RIDICULOUS products (like T-handle spark plug removers) which are not tools that an every day mechanic needs to perform his job and has them marked up 3 times what they should be. So, they stay on your truck for 6 months not selling because guys like them but they say “are they made out of GOLD” “I can’t afford to buy it at that price” then all of a sudden they show up in a Matco sales flier and are 30% off and DROPPED in LIST PRICE. What Distributor paid for the initial product is MORE than the NEW price Matco is selling that item for. Then a couple of months later that item is DISCONTINUED and not available anymore. So, if you got one, you are stuck till you sell it BELOW your cost or you go out of business and have that product for your TOOL BOX!
Todd
Very similar with snap-on. Snap-on dealers buy product at expos twice a year. We also have monthly sales meetings, inside sales calls directed at the dealers on a weekly basis and a system called FDO’s which is Future dated orders. We pre buy for the whole year. All these programs basically sell us the same tools over and over again in different packaging and different prices. The FDO’s are highlighted in Snap-on’s marketing piece called hot tools. This is a marketing piece that is required for the dealer to buy monthly and Snap-on actually derives a income from this piece when they jam it down our throat. This piece has reduced pricing in it for the customers which controls what we can sell tools for. The problem here is that if you don’t pre-buy the tools, we have to pay a much higher price, yet we still have to sell at the reduced price.
As a side note.more than half of all Snap-on dealers are on tool hold at any given time.
WOW! Jim is that why their is usually a ton of product on a SNAP-ON tool truck? Because you don’t have a choice in some of what you buy? I know Snap-On is the #1 tool franchise and has been for 40+ years but are you telling me they use their DISTRIBUTOR success to PAD their Corporate pocket book and then when the Distributor can’t pay for all the inventory they did not choose to buy Snap-On puts them on HOLD and they can’t even buy a broke socket that week to take care of their CUSTOMERS?
bingo
code word for dealer on hold with Snap-on is, “it’s on back order” Truck loaded with worthless promos. Can’t get a 10 mil socket.
Bingo?
Do I get a PRIZE? LOL!
You know my #1 Competitor and Distributor for Snap-On in my area was Bob (Robert) Demers who was telling his customers their sockets were on Back Order alot in 2007 and 2008. I personally asked why he filed Bankruptcy in I think 2008 and he told me it was over medical bills. Then the next thing I know our DM and RM had him in San Antonio, Tx working as a District Manager. He is now calling on shops I was forced to vacate by Matco when they terminated my Franchise even though he had assumed a separate route.
snapon bm has a bag of tricks that will force you out of business I was force out after 24 years
How? We need to warn others. Please elaborate!
I read on Forbes web site people commenting on snap on being #1. I recommend people to read it themselves.
shame on all you who bad mouth the poeple who fianance you. It is your franchise you dont have to do what they tell you. For example the person who said he got stuck with a non returnable diagnostic piece. You didnt have to order it. Its your responsiblity to check whats coming and do your orders. There all layed out on the table. You can cancel them also. All i have to say is these are piss poor lazy dealers that have no ambition to make it happen. the deals of today are fantastic and theres money to be made. To the person complaining about snapon credit. You never complained about the money you made on the deal. But you complain now about being harressed about picking up the product. With out you being there everyweek seeing the customer, the credit would have never been extended. So to all the unhappy dealers i say F**K YOU leave and make way for people with ambition who wanna make money.
Happy snappy,
First of all this is an open forum. That means everyone on here is entitled to there own opinion. Your opinion of course is welcome. The FU was totally unnecessary. Only punks talk like that and I dont take you as one.
Shame on us for sharing our opinions is simply ignorant on your part. Snap on credit forces new dealers that don’t have all the money to buy into the franchise into using them. There are three reason for that. One being snap on credit makes a lot of money in interest charges, two being snap on wants too control everything in a new dealers business and three MOST banks won’t even consider loaning you money for your new business including SBA because snap on wants to be the first Lein in your business and no outside bank will touch that. So my opinion and many other on here feel it is wrong for snap on too hold us on the ball and chain by the ankles so they can make there millions and millions.
The diagnostic comment. For whatever reason why any dealer buys an item is there decision. I do however feel some of these fpt meetings put a lot of pressure on dealers to buy stuff they really didn’t want. Or a BM may say ” just take the item and if you can’t move it we won’t charge you and move it to another dealer”. I heard promises like that and it becomes a nightmare for some dealers to get the product moved around. Plus don’t you think the item should be returnable? If you were to check in they have no problem taking diagnostic unit then.
Lazy dealers comment. I am for one not a lazy dealer. Jim is one of the top 10 dealers in the company. You don’t become top 10 by being lazy. I talk to JIm here and there and he is always working at full throttle. I push a lot of volume myself and currently hold 2 routes.
Now on to the snap on credit remark. You really think it’s fair us dealers have to be responsible for these people accounts? It really isn’t ours at the end of the day and really is Mr Customers responsibility to pay his or hers bills. Where else is someone responsible for a credit sale they made with a consumer that walked into there store buying something? Yet you find nothing wrong with the picture? Just because snap on credit had these rules written in the franchise agreement doesn’t mean it is ethical or even legal. In fact we may have found out it is illegal for snap on credit to ask us to collect EC payments with credit cards. So you should really read in between the lines before running your mouth.
We are here to let snap on here what makes us upset. The workers in Kenosha may have lost touch of what is happening out in the field and need to know. I. Honestly think snap on will here what we are saying and wanna make changes to make this a great business. Jim said it best it’s the 5% of the business that can kill a dealer. He is 100% right.
happysnappy,
See guys, this is the type of HUMAN BEINGS Snap-On desires to sell their tools. People who can get on sites like this and BLOW sunshine up your REAR. Tell you that they make a GRRREEEEAAAAATTTT living doing what they do, only RECEIVE what they order, can sell their Franchise when they want to sell it when they have made all that money and love all those GREAT DEALS Snap-On gives them with their over priced CHINESE, TIAWAN, Canada, Mexico and SOME made in the U.S. tools. The fact is MOST of what SNAP-ON sells any WAREHOUSE DISTRIBUTOR has and ALOT cheaper!!!!
if you guys dont want the opportunity that they offer why do you stay? and to the credit remark you should hold some responsiblity cause you are making money too. dont you think everyone would paper the town?
Happy,
I stay because if snap on changes that 5% this could be a great company. I don’t understand your remark with credit. I should hold responsibility because I made money? So if a customers gives you a visa card to buy a tool box from you does that mean visa should hold you responsible for the merchandise till it’s paid? You did make money. You can’t paper the town either because not everyone in town will have good credit and qualify. So my point is snap on credit approves people credit through a standard credit system criteria. Why should we be held accountable for an account we really didn’t approve? I think us dealers just get caught up being a middle man for no reason other then snap on credit using us as undisclosed employees. That is another reason why SBA looks at a snap on tool franchise as really an employee rather then an independent business opportunity.
I also invite you to checkout http://www.mobiletooldealersassociation.com. We like all feedback positive and negative.
thats the credit that they offer. once again if you dont like it dont use it.
Happysnappy
I think its great you are making money. You do sound young and nieve. I’ve been doing this for a long time and if you are drinking the Snap-on koolaide like it sounds you are, and following all Snap-ons programs I guarantee you are not making the money you think you are.
I was just at a conference where a business broker said any business that earns $50,000 a year or less is a hobby not a business. Guess what the average Snap-on dealer makes. About $50,000.00 a year after Snap-on is done chipping away at our profits with riduculas interest rates, over charged credit card charges and so on.
i guess im not your average snapon dealer. i make a good living and all of my fellow dealers that are around me seem to make a good living. i have people that do better than me and people who do less and they all seem to be doing pretty well and we arent in a low income area either. so i guess i dont know where your coming from and i pay more than half that average in taxes
happysnappy
Thats great. There are many sucessful Snap-on dealers. I have been around since 1992. I make good money. I used to be a Field manager. I say today that Snap-on in many ways is great. If they changed 5% of the way they do business they would be unbelievable. I tried to sell one of my franchises to one of my sucessful dealers recently and Snap-on blocked it in many ways. There is no resale value in a Snap-on tool route. Do you owe Snap-on any money? they report to your personal credit that business credit because they do not want you to get personal loans. that policy just started in 2009. Its wrong. I want Snap-on to change by 5% to become unbelievable. Did you know they make a profit off of chase payment tech everytime you run a credit card. We pay inflated rates to put money in snap-ons pockets. Thats wrong. Snap-on could be better.
A random person not even with snap on made a good point on another post. Considering sba doesn’t even do business with snap on franchise should raise some red flags. Yet the writer on Forbes doesn’t even see that as being a concern. You gotta love how the kool aid gets passed around.
Franchise attorney Michael Webster wrote:
Is Snap-On Tools the next Coverall?
http://www.franchise-info.ca/franchisee_association_news/2012/03/is-snap-on-tools-the-next-coverall.html
Coverall is a janitorial franchise. A MA judge ruled Coverall maintains such control over the franchisees’ businesses that their franchisees are actually, technically, employees and should be protected by labor laws as such, including being paid min. wage, overtime, unemployment, etc.
What do you think? Could courts rule that Snap-on maintains such excessive control that their franchisees are employees, not business owners?
Funny thing is snap on thinks a dealer being on credit hold happens and is basically except able. If a dealer can’t get product for there customer how is that acceptable? I only mention this because a conversation I had with a manager today and that was the answer I gotten. I never go on hold because it stops me from servicing my customers. Yet snap on doesn’t see this as being a concern because it is up to the dealer to control there own account.
Dear snap on,
I hope you are reading these forums and you are ready to change that 5% of your business so franchisees can be in a better place,
Thanks
I been a Dealer with snap on since 1982 ,.30 years.I stared taking and acepting credit cards in the late 1980′s , used several different credit card company’s and if snap on is making money from chase payment tech. good for them because by the three our four other credit card prosessors i used chase paymetech has been the leas expensive one I have used. so if snap on wants to make extra income saving me money cood for them
I just think they should allow other options that can still be used through the DSS portal. I also don’t think we should have to accept credit card payments through Snap On Credit accounts. It lowers our profits with the credit card fees.
Forbes Snap-on controversy on BlueMauMau.org.
http://www.bluemaumau.org/there_place_truth_franchising
Jim Lager is quoted in the comments. He’s becoming something of a celebrity.
thank you for the back up lonnie. also you can speak to you nfac to voice your concerns on the 5 percent of things that make you unhappy
Nfac? Are you kidding? I talked to those morons at sfc and they are probably good hard workers but suck at being mediators or problem solvers. I have a lot of experience with letting my voice be heard to get things done. A group of franchisees that are appointed that suck snap ons ass isn’t the solution. I suggest you go on mobiletooldealersassociation.com. This association has helped me more in one forum topic then any conversation in person, email or phone call with my Nfac member. That’s a fact. Snap on treats franchisees like employees instead of independent business owners. If you don’t believe me read what SBA had to say about snap on. Then Forbes went ahead a reviewed snap on as being #1 for the buck. Then later realized they made a mistake. That will bite them in the ass later. It just so happens that when a dealer terminates there agreement snap on just requires the route. Basically means instead of reporting a store closed like any typical business would they do what is called CHURN. Real slick snappy but your dirty little secret has been revealed. So happy snappy don’t be so ignorant. Maybe when you waana sell your franchise one day you will see the light.
how much do you want for your franchise?
I like to get what would be fair after years of hard work. Most dealers check in and give the route back to snap on. That is what you call churn.
The sad part is snap on makes it impossible for you to sell your route. They rather you check in so they can split your route into 2 or 3 routes if they feel it’s too big. I think only 200 customers is insane. Then snap on can make money on setting up a new dealer with fresh merchandise, over priced interest rates on loans and control the next victims business. It’s a crime what they do yet do a great job covering there tracks. The Forbes review really exposed some of there dirty little tricks.
Look at Jim lager and his situation. He is a top 10 dealer in the company. Yet he tried selling one of his routes and snap on didn’t do anything to help him either. It’s like his route isntworth anything. So if his route isn’t worth anything being a top 10 dealer then there is little hope for us on the value of our routes.
Happy snappy
You are very lucky to likewhat you do and make money at it. You sound young and excited about your business. I also own another franchise outside of Snap-on and gave a speech last weekend about trusting your franchisor. Its very important to trust to succeed. Yet sometimes Franchisors betray that trust.
In the case of the NFAC they spend their time dealing with the issues of the bottom 25% of dealers. Believe me that takes a lot because a lot of dealers get hurt in this business. No dealer will survive in a route of 200 potential customers. There is no doubt you had someone(in the field manager) lie and cheat to get you a route of more than 200 or you would not be singing praises.
In my case I want to sell my route for something. I tried to sell to one of my dealers averaging more than $10,000 per week and a credit score of 740. Snap-on did everything to kill deal. In fact they wouldn’t even finance the computer technology package I bought 3 months earlier. Snap-on wants all routes devalued to zero because they can churn them. Something is wrong when a Snap-on dealer is checking out every single day to include weekends over a 3 year period.
This is much more complicated than whether you are making money or not.
Heres a survey for Forbes and a writer named Eric Stites whos client is Snap-on tools. Ask the following questions of all franchisees.
1. How much money do you have in retirement after owning your business for 2 yrs.
2. How much money do you have in retirement after owning your business for 5 yrs.
3, How much money do you have in retirement after owning your business for 10 yrs.
4. How much money do you have in retirement after owning your business for 20 yrs.
If the way to get rich in this country is by owning your own business and accumilating wealth because you take risks than anyone who owns a succesfull business should be worth at least 1 million dollars after lets say at least 10 years.
I don’t think very many Snap-on, Matco, Mac dealers can say they have much of anything after 10 years. The dirty little secret is we as tool dealers are employees in a system that places all the risk on dealers. In fact most dealers are happy employees because these companies are masters of deception. You young dealers will work your asses off and have nothing or very little to show down the road.
2 years ago I started in another franchise system that wants me to become rich. They want me to take vacations. does Snap-on want you to take vacations? I don’t think so guys. Snap-on wants you working 52 weeks per year. Oh yeah you can take a vacation. But in order to keep moneyu coming in you need to Give away a $1000.00 pool cue that you buy from Snap-on. if someone mails you a payment while you are gone their name goes in a hat to draw. Lets see your profit was the pool cue you bought from Snap-on that you just gave away. But now at least you can pay Snap-on’s tool bill.
Dealers out there. I am no idiot and Snap-on knows it. I own 5 Snap-on tool franchises with 6 employees, and my other business after 2 yrs has 13 employees. Both businesses will do over 2 million in 2012. I will net 5 times more money with my other business. In fact 2011 in my first full year of this other business being open my sales were half of my Snap-on business and it netted more than double what I did in Snap-on.
Snap-on is a job and nothing more. Love it or hate it it is a job.
a route that does 10k a week should be worth how much after 10 years? or how how much is desired for the business?
If you speak to a business broker a business that nets $50,000 a year or less is a hobby not a business. With that said business in that catagory is worthless.
A route that does $10,000.00 a week is questionable as to how much it nets. Of course it value is also questionable.
Here are the facts:
1. There is only one real financing option. Snap-on Credit.
2. Snap-on will only finance $77,500 in new inventory at cost and $52,500 in R/A at cost.
3. Snap-on will finance nothing else when you sell. Nothing. Not your computer, not your truck, not blue sky not anything.
4. Snap-on has a schedule one with a whole list of things to sell when you try to do a transfer of your business. New dealer has to pay cash for everything. the schedule one Snap-on provides is worthless.
5. Yet Snap-on is giving away routes with nothing more than 1st and last months payments on a new tool truck. Because its a job, not an opportunity to prosper.
6. You will never sell your franchise for a profit. You will never retire under a palm tree with Snap-on as your business.
7. We need to push Snap-on to not just be a job but a great opportunity that we can become wealthy.
My suggestion is to run hard for 5 years as a dealer, runs number in excess of $12,000.00 a week if you want to make any money at all. Try to stretch your margins 5 – 10% higher than what Snap-on wants us to make and get out with your cash and use your experiences to start another more profitable business. Snap-on is a great learning ground for running a business but you will not prosper big time.
To answer your question directly. $10,000.00 a week route has no value. I will eventually give this route to my dealer.
i was looking for your opinion on what you think it should be worth. on an average. what should the sale of the business yield (thats on a 10k per week avg.)
I think it will depend on how much someone is willing to give you cash out of there pocket. Problem is Jims earlier point. Average snap on dealer makes $50k a year. Who is gonna invest well over $100k with a lot of up front cash for a job that only pays $50k a year? Most people are gonna look another direction or just take on a regular job as an employee. So I see a route that des $10 a week being worth zero. I also see snap on when your ready to depart for whatever reason with there hands out waiting for you to hand the keys over just like most other dealers end up doing. It sounds harsh but that is what snap on does.
i should be really pissed now. especially at my accountant my 10k a week business only provides me with that much. oh wait it seems to be alot more than that. I cant speak for anyone but myself on this so i guess if i will keep asking. maybe someone can give me an answer as to what they think a it should be worth. I dont know who looks at buying a business without seeing what the earning potential is, what the costs are, and if they themselves can make a profitable business from what snapon has to offer. In my case if i were selling my business to someone would i want to have my tax returns present to show them how much was made. when i started this business as a trial franchise. i invested about 3500 out of my pocket. now 7 years later and about 4 years after buying my business the business loan is almost paidoff i have more in the bank then most people could earn in 2years doing this according to everybody here. enough to buy a decent house in business equity.tons of stocks in snapon my own ira and sep. also make enough money for nice house, car and my family. so maybe im just lost in this whole thing. but i still wanna know what everyone thinks a 10k business should be worth when selling
Happy snappy
You don’t listen do you? To me it’s worth more than zero. But zero is what u will get when you sell. Try it and you will see. I mean try it, don’t ask snap-on because they will tell what you want until you try to sell.
Good luck
wow thats great. one simple question couldnt be answered. unless i was asking you for a song and dance. thats what im getting from you. I guess thats why stuff wont change. here we are asking questions to eachother to get answers to help one another. Instead i get “you will get nothing just try” thats wonderful. You never said your price for your business what you think its worth, what you want. Is it a ridicilous amount? i would like to know. i have asked the same question at least 4 times with no real answer. You come here to speak your piece and you dont answer what someone asks you. I guess we know where the biggest zero in this business is.
Happy snappy
Let’s see, how do I answer. I asked Snapon to finance truck for $20,000. Snapon said no. I said ok. I then asked them to finance $15000. Business value. They said no. I said okay. Then I asked to finance bran new computer I just bought for $5000.00. They said no. Then the regional manager pat Laughry, called me and asked me to give my route away for free and he would give me a free tool box on the side. I don’t do side deals. By the way they will only finance 52,500 in RA. How much RA do you have. I’ve been around a long time and made a lot of money. It’s great you are doing well. Just don’t be nieve. Snapon could be better. I will repeat myself. I want more than zero. I hope you do too. Today you will get zero because Snapon wants to give your route away in a gateway program like you started in.
why couldnt you finance the dealer buying your stuff. He could finance the tools and ra book from snapon and you could finance the truck,computer and business and any left over ra. is that an option?
Happy snappy
Don’t hate Snapon. Love them but stand up to them and make them add value to YOUR business. Your not a business owner if you can’t sell
but why couldnt you finance the dealer. with what you have to sell. if he has your truck why cant he give you 400 a week for a 100 weeks to make you the 40k of which you asked snapon to finance
I get that but why can’t snap-on. I could go to a bank and have another bank finance it but Snap-on puts a 1st lien on the business. You sound like a great hard working guy that got a great opportunity from snap-on. That happened to me once too. That doesn’t mean we should except Snap-on and let them take advantage of dealers. any good business has a value that it is worth something and that business should be able to be financed and sold by a bank. Nothing more. If Snap-on is the bank they need to help us sell the business for whatever it is reasonably worth by financing it. I should not have to finance the business. By the way, my dealer can get a gateway like you did for $3,500.00. If I transfer my business he has to give Snap-on $25,000.00 cash, not me, but Snap-on. In addition he needs another $7,000.00 for other expenses given to snap-on. I have yet to have gotten any money for my truck, computer, blue sky. I love your attitide happy Snappy but please beware. Snap-on controls your every move. I want you to sell your business for big money someday. snap-on doesn’t. Lets change that to better both Snap-on and dealers.
Happy snappy,
If you couldn’t work another day in your life starting Monday what do you think snap on would do with your route, RA book, merchandise and tools? And what would they pay for?
if that happened i guess id be turning in my tools and ra book. i guess if i were dead or so sick or hurt i couldnt talk. but if i could still use a phone and a computer maybe still get on the truck i would find someone to help me. and if not after this long a time i could just start calling customers and make them a deal to get rid of my stuff
also thats what happens in all business. unfortunenty we are 1 person businesses. we all know people who are employees that get sick or cant work any longer and they end up getting replaced. we would all like to think we are special but we arent. we are there customers. Its kinda like when we take tools back from someone when its used you dont give them the full value. when you take back tools its just business. its unfortunate that the whole world is just in business to make money not help good people.
I have been reading all these replies back and forth with happy snappy..after seeing how snap-on treats their franchisees and listening to this happy snappy,I am convinced he is a corporate plant to rebut their unethical business practices.I know a dealer who bought 2 separate perspectives to buy his franchise when he wanted to get out.they had financing and cash money in hand ready to go.snap-on interviewed them and said both where unsuitable.the dealer liquidated sold his truck privately and walked away from a 12k a week route.at that time he was only pulling a pay check of 65k after operating costs(his dead net, true profit). a deciding factor that made me close my so called business, was from a wealthy successful person,he said to me ,if you could make as much as you are making now working for someone,why would you want to be in business for yourself…unless you cant abide by management or show up for work every day…
I personally went head strong into this franchise when it was a top 10 franchise to own and not in the home based category.I invested and had lost income of 450k over my 7 year association with snap-on. Jim I must say you are a gentleman in how you answer a lot of these posts and a true business man. I hope you get what it is that you started this website for ,before you get shut down by corporate either in business and or the web.good luck.
some more info:did you know Wisconsin attorney general prosecuted snap-on for similar unethical practices in there military sales..look it up they paid millions a couple of years ago.
I have been reading all these replies back and forth with happy snappy..after seeing how snap-on treats their franchisees and listening to this happy snappy,I am convinced he is a corporate plant to rebut their unethical business practices.I know a dealer who bought 2 separate perspectives to buy his franchise when he wanted to get out.they had financing and cash money in hand ready to go.snap-on interviewed them and said both where unsuitable.the dealer liquidated sold his truck privately and walked away from a 12k a week route.at that time he was only pulling a pay check of 65k after operating costs(his dead net, true profit). a deciding factor that made me close my so called business, was from a wealthy successful person,he said to me ,if you could make as much as you are making now working for someone,why would you want to be in business for yourself…unless you cant abide by management or show up for work every day…
I personally went head strong into this franchise when it was a top 10 franchise to own and not in the home based category.I invested and had lost income of 450k over my 7 year association with snap-on. Jim I must say you are a gentleman in how you answer a lot of these posts and a true business man. I hope you get what it is that you started this website for ,before you get shut down by corporate either in business and or the web.good luck.
some more info:did you know Wisconsin attorney general prosecuted snap-on for similar unethical practices in there military sales..look it up they paid $900k a couple of years ago.
I have been reading all these replies back and forth with happy snappy..after seeing how snap-on treats their franchisees and listening to this happy snappy,I am convinced he is a corporate plant to rebut their unethical business practices.I know a dealer who bought 2 separate perspectives to buy his franchise when he wanted to get out.they had financing and cash money in hand ready to go.snap-on interviewed them and said both where unsuitable.the dealer liquidated sold his truck privately and walked away from a 12k a week route.at that time he was only pulling a pay check of 65k after operating costs(his dead net, true profit). a deciding factor that made me close my so called business, was from a wealthy successful person,he said to me ,if you could make as much as you are making now working for someone,why would you want to be in business for yourself…unless you cant abide by management or show up for work every day…
I personally went head strong into this franchise when it was a top 10 franchise to own and not in the home based category.I invested and had lost income of 450k over my 7 year association with snap-on. Jim I must say you are a gentleman in how you answer a lot of these posts and a true business man. I hope you get what it is that you started this website for ,before you get shut down by corporate either in business and or the web.good luck.
some more info:did you know Wisconsin attorney general prosecuted snap-on for similar unethical practices in there military sales..look it up they paid $900k (revised)a couple of years ago.
i find it funny that you believe me to be a from corporate. im just a dealer who was told about this from a friend. my problem with all this is that everybody doesnt see that they are in business to make money. Yes i believe things should change also. It wasnt my first meeting when i realized ( they are just here to sell me stuff) it was my job to say no and its was my job to sell what i bought. unethical or not. its your job to ask questions and run your business. After this week of reading and posting here i went through my tax returns and saw that its not 50k a year job. its alot of work to make money. I know dealers that used to make alot at there old jobs. they came to snapon and found out this wasnt for them. they went back to work doing what they do. you have to remember that this line of work is not for all people. You have to know alot. Its not just selling tools and collecting money. you have to be your own business man you have to do whats best for you and no one else.
Former franchisee
Thank you for the compliment. I have already gone thru the legal battle with Snap-on. I have hired an attorney and have no fears of their legal issues with Snap-on. I plan on exposing Snap-on for who they are.They are watching every post I make on this site and http://www.mobiletooldealersassociation.com. I know this because they call my attorney frequently. It is not a business opportunity. If you get too big in snap-on they do everything they can to hold you down. If happy snappy is a franchisee he is fooling himself. I no longer want to sell my franchises because I can do more damage to Snap-on’s reputation by continueing as a multi franchise dealer. We are spreading throughout the web and getting agnowlged by Kenosha news, Forbes, International franchise association, bluemuamua and much more.
Snap-on could be better but because it is a good old boys network who think all dealers are stupid they won’t. I am here to educate dealers. Thanks for your help and info. we will look up the military issues on ethics.
Last week I gave a speech at Pirtek’s 14th annual franchise convention. It was about trusting your franchise to succeed. I still believe one must trust their franchisor if they have any chance to succeed. Its hard to do that with Snap-on when they truely don’t offer a franchise. Just a job.
ok happy snappy
whats your weekly paid sales and what does your schedule c of your tax return say you make? this is your net after all expenses. Your cash flow by the way is lower than this number because your schedule c won’t count principle pay down of your loans to Snap-on as an .
questions for happy snappy,are you incorporated drawing a pay check or a sub s,or single proprietor? because if your business is ran any other way other then you being a employee pulling a weekly pay check you don’t know how much you are making, because you are just floating money around from column to column not knowing anything other than, my bills got paid this week.if you are anything other then a corporation find a new accountant!!! how long are you a dealer,what are your paid sales,what is your true c.o.g.? if it is not a 50k a year job to you,then you must have paid sales well over 500k a year this is about 10k a week dealer.your true bottom line what goes in your pocket after health,truck insurance and fuel not to mention premium promo packs and any other operating cost…so educate all these unhappy franchisee’s so they could be more profitable.
Schedule c will show your income. Is it more or less then $50k?
I like it that Forbes is big enough to acknowledges that they were wrong. I would rate the Forbes writers even higher if they would now show hutzpah and remove Snap-On Tools since a mistake was made. Or keep it on and explain why it still belongs as #1. (It doesn’t.)
Forbes should publish a churn rate from the raw numbers for each brand. Define this as closures / total U.S. locations for the past 3 years. So using Forbes’ numbers:
Brand
Franchise closure (store may continue) Total units Churn Rate
Snap-on 1060* 3,392 31%
7-Eleven 90 6142 1%
Aaron’s 12 1,749 1%
Panera Bread 6 1379 0%
Look at Panera Bread! Panera Bread’s churn rate of 0 percent let’s me know quickly that something special is happening there. Owners are hanging on to it as if it were made of gold and the franchisor isn’t weeding franchisees out. Panera bubbles up as the #1 choice on this list — without weighing other factors such as unit earnings.
If Snap-on will lie about their closure rate what else will they lie about. 31% closure rate. Not a good deal at any price. Every manager who promotes that piece to gain franchises should not be able to sleep at night. The director of franchising for Snap-on tools needs to tell it like it is and apoligize for the bad publication.
I have to admit snap on is really good in covering there dirty tracks.
184K gross 106k after
After what? What’s paid sales
expenses 10200 a week
I’m lost with these figures. Jim you get it?
He needs to tell is his paid sales. If he made that much cash he does not have 200 customers. Or his accountant is an idiot
10200 dollars aweek
So your sales are around $530k? Your figuring around 35% margin? That is where you came up with $184k? So let’s look at $185k. That is your profit after cost of goods. The margin is a bit high. I think snap on works on a 30% number. So let’s do some estimations? Your profit has to pay for truck payment roughly $350 week including $50 for maintenance ($18,200 a year). Your monthly franchise fee $107 month ($1,284 a year). Your inventory loan roughly $240 a week ($12,480 a year). Your RA development loan roughly $160 a week ( $8,320 a year). Your monthly hot tools flier $82 a month ( $984 a year). Your truck and inventory insurance roughly $375 a month ( $4500 a year). Your BA merchandise you purchased for raffles or giveaways roughly $7500 a year that would include RA jackets if you use that program. Now BA does count as an expense if you don’t sell it for a profit. Your shipping cost snap on doesn’t cover roughly $750 a year. Your sales tax. If your tax rate is 6% then on $540k paid sales which could be off a little because it goes by delivered sales is roughly $32k. Then you have bad debt on RA skips or charge backs that can end up being if you go by 2% of your paid that can be around $10k. Then if you travel to snap on conventions such as kick off or sfc that can run around $3k if you don’t spend a lot on plane tickets, hotel and spending money. Then fuel which can be around $150 a week which is around $7,800 a year. Then uniforms which cost me around $300 a year.
thats roughly 75K in expenses and my taxes are different where i come from so 184K less the expenses i said ended up with 106K my difference was 78K.
That adds up to be around $107k in expenses. So if your profit is $184,000 and your expenses are $107,000 your net after expenses is $77k. Your take home after taxes 30% federal tax $53,900. Damm Jim you were right. Average dealer makes $50k a year. So let’s do one more figure $53,900 you took home. You worked 70 hours a week which most guy do that is 3,640 hours in a year. Take $53,900 divide that into 3,640 that equals $14.80 an hour. Ok your probably saying you earned $77k but you actually didn’t take all that home because you had to pay uncle Sam. But let’s divide by $77k that equals $21.15 an hour.
So don’t be fooled. You including every other dealer is an employee that is highly underpaid. If you worked 70 hours a week as a real employee even at $21.15 an hour you made on 40 hours $43,992 a year regular. On the 30 hours which is over time so that is 1 1\2 times your hourly salary is $49,491 a year. Add them both together that is $93,483 a year. Wow. Job probably gives you sick days, vacation, personal days, medical, dental, prescription plan, 401k, etc etc. The best part is you have zero risk. Yet snap on has figured out a great scheme on how to paint this picture of owning your own business and Getting rich but really made you an undisclosed employee. This goes to my earlier point. Why is someone gonna buy your route to only make $15 bucks an hour or may $21 at best. So back to Jims earlier point your route is worth crap. You have to admit. Snap on has has a great scheme going.
hey happy snappy,I hope your healthy because you didn’t include health insurance,if you are single and living home with mommy and daddy,you are probably paying at least 7200k a year and if you are a family man figure about 10k to 12k add that into your equation.
i guess you guys are right. ill just keep doing what im doing.
Health insurance. Yeah that was a big one I missed. Thanks former.
There is good news. Join mobiletooldealersassociation.com. By joining we can work togethervto be more profitable, voicing our concerns with old or new policy’s, forcing snap on to help us sell our routes for more money, advice from experienced dealers that will help you earn more money, etc etc. I think happy you should join. Myself and Jim would love to help you make more money and get your money’s worth on your investment.
this is a long time practice with snap-on… check out this link
http://www.justice.gov/opa/pr/1996/Dec96/584civ.htm
if they did this to the government,just think of what they can do to you!!!!!!!!!!!
get you divorced(snap-on wives website)
ruin your credit,bankrupt you, any one else have any ideas?
great family owned business, as they like to portray!!!!!!!
Former,
Great link you sent over. That will get posted on the tooldealersassociation.com.
That $891,000 snap on paid will only be a drop in the bucket when they see what will be coming for them. :)))
Happy Snappy need a new accountant
Happy snappy
In all seriousness. I hope you are not paying taxes on those numbers. all my trucks are running between $10,000 and $14,0000 per week. My business is paid for. I don’t pay income taxes on a number like you have. You need to get an accountant that specializes on tool trucks. Ask other dealers. I am not trying to to slam you but there is no way a guy who still owes money on the truck, tools and r/a doing $10,000 a week is making over $100,000.00. good job by the way. $10,000 a week is something to be proud of. You are making a living and a decent one. But it won’t accumulate wealth like it should. Learn from Snap-on and a few years after your business is paid for give it back to snap-on and do something that makes real money.
In addition you are above average. Average dealer does $8000.00 week.
I also forgot one thing that is taking out of your profit. Credit card fees. I pay roughly $300 a month through payment tech which snap on is getting a cut and that comes out to $3,600 a year. So you made a little less after those expenses.
Read this report on
http://www.bluemuamua.com
http://www.bluemaumau.org/forbes_may_adopt_franchise_churn_rankings
I talked to an old timer this past weekend that been doing this for 40 years. He said ” snap on has forgotten how hard us dealers work out here. At one time snap on really showed there appreciation to all the dealers. Now they just dine us once a month for a $10 dollar dinner where they expect us to spend thousands of dollars.”. He has seen a lot of ups and downs with snap on over the years but he feels new dealers coming in aren’t getting anything great other then average paying job. He also said snap on can’t wait till he leaves s they can chop his route into 2 or 3 routes.
Any dealers sick of getting ripped off buying hot tool fliers and then getting sucked into RAD? Snap On forces dealers to buy into these programs and if we dont participate in them we lose margins.
Everything I read makes sense on what snap on is doing to people. Yet nobody including the government sees this as a problem? I have almost lost everything including my home over this company that has sucked every drop of blood out of me. I call out a class action myself for us being secretive employees. That’s all we are in these trucks.
I too was scammed by Snap-on. I have experienced a lot of what’s already been discussed here on this forum. Everything from Snap-on Credit, Hot Tools, no value in my multi-franchise business (4 franchises and a second van). I went from being a top dealer in our “branch” to Snap-on reducing and taking my territories down to two. After my Regional Manager told my wife she was too old to run my second franchise and reduced my business down to 1 truck, I could no longer carry the indebtedness they put me in by convincing me to take on the other franchises. Keep in mind, my wife went through all the training in Texas, as was given the award for Top Second Van in our region running the truck “part-time”. To all of you newbies out there, beware of friendly assassins, namely your Regional Manager, Business Manager, and your Asset Manager. They are all in cahoots. Be smart, record your conversations with these people. We were doing fine until the 2006 “reorganizaton” to FPT. I was a Top 20 dealer nationwide until then. My wife and I have also retained Marks & Klein and encourage anyone out there to do the same if you are not satisfied. Your franchises are truly not worth anything to sell, no matter what they tell you. I heard all the same lies. I have been self employed for over thirty years and know what it takes to run a business and make money and build “real” equity. The only reason I got involved in this is because I didn’t want employees anymore and that’s what I ended up with anyway because they told me that’s when I’d start making real money (I averaged well over 10K/week before I expanded also). If you are making money now…get out while you can. Cashing in gets you nothing. You might end up with 50 cents on the dollar returning your tools because if it’s not discontinued, it’s truck worn. You will only end up with 75 cents on the dollar of RA only if it’s verifiable (customer present when checked with rep). I had $20K equity in my truck…got nothing. They interfered with any sale I had going on that. Truck was worth $86K, only owed $60K. I paid $140K new.
It’s all a scam. They do inventory once a year, pump you up about how much equity you have in your business, then when they want fresh blood out there, they tell you how much you’re losing with one of your franchises and convince you that you should check it in. That’s the game they play.
Wow, Snapon is master of deception. Snapon has a 33percent failure rate. Top 100 dealers have no money yet so many dealers love Snapon. In snapons mind it’s always the dealers fault. I am thinking about trying to get on dealer advisory board as well as publicly attacking everything Snapon does. I want to come up with 5 real things that would make Snapon great verses being a scam which is what they are today. Your story is too sad
That is very sad. It’s funny how people that don’t know each other yet all share similar stories. Snap on is very good at getting people pumped and hide what is behind the real door #1. I suggest you checkout mobiletooldealersassociation.com.
Quite around here….
No worries, we will light it up soon. Mobile Tool dealers association bought 2012 FDD for Snap-on and is analysing it now. Also analysing Mac and Matco
Go to http://www.mobiletooldealersassociation.com if you wanna check out tool companies fdd documents.
So… interesting comments here boys. I’ve been going through the process of opening a franchise with Snap-On and stumbled across this site. I haven’t pulled the trigger on the new business, but wow, great food for thought here. Thanks for posting. Definitely a ton of stuff for me to chew on.
Almost a franchise
Keep in mind most successful dealers in snap-on are in under old standards. Failure rate of new dealer is out of this world. Your chances of becoming wealthy are almost zero. Be prepared to work 70 hrs a week if u are lucky enough to get a good route. If u get a route with 225 head count or less. U will fail. All my routes have 400 or more. Only way u get that many is if surveyors in field cheat for ur benefit.
Good luck
Jim
Thanks Jim. Due to this site I decided to opt out of my franchise this morning and look elsewhere for biz opportunities. I appreciate your wisdom and transparent candor. Very helpful and refreshing.
Almost a franchise
It’s more money but checkout Pirtekusa.com. I bought franchise two years ago and profits are amazing.
Good luck
Almost A Franhise,
You made the best decision of your life. You will never really know for sure what you got yourself involved with but believe me, running a Snap On truck is not a good place. The problem with buying into Snap On is you basically bought yourself a low paying, long hours and never a break job. I still think Snap On really doesn’t have a clue how to make this business a better oppurtinity or they just don’t care. Either way when the older dealers (Large Number Of Them Still around) are ready to try selling there routes and see it being no walk in the park then that is maybe when Snap On will be forced to make changes. I say forced because that is the only way of getting things done when you are dealing with Snap On. Invest in a company that will allow you to hire people and have those people build the business for you while you work behind the scenes. As a Snap On Dealer it’s just you sweating your ass off with no little time for a break. Perfect example I worked since 7am this morning and now it’s 9pm I just got done. Now I am typing here on this web site talking about not doing the job I just got done doing today. Funny but sad. I wish you the best in your venture.
Unhappy Dealer and Jim Lager;
I’m so happy that the two of you took the time to help others understand the “opportunity” from your experience. About two years ago I seriously considered a tool franchise but did not pull the trigger on it due to a stroke of very good luck that brought me a much better short term opportunity. As that opportunity is nearing expiration I began to consider a DBR investment again and there is no doubt that I would have found lots to like about the work, but would have found myself regretting the same issues you two have both outlined very professionally. Perhaps I won’t find anything that is better or more suitable to my liking but at least I will be armed with more knowledge from your experiences. To think that I don’t have to learn it all the hard way is extremely valuable.
As a side note: I investigated a Matco franchise and spoke to some of the DBR over there of which two had been former Snap On DBR. They were much happier at Matco – but I still see many of the same catches that seem to be part of the relationship with all of the companies.
Good luck on your search and stay away from the Evil Tool World. Thanks for your nice comments.