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MATCO TOOLS Class Action Lawsuit, “Secret” Sales Projections

A class action lawsuit against Matco Tools and TD Bank alleges that the tool company franchisor and the bank engaged in a loan fraud scheme to encourage unsophisticated borrowers to enter into risky business loans to buy Matco Tools franchises.

Here is a copy of the complaint brought by Marks & Klein, LLP, of Red Bank, New Jersey:


The lawsuit alleges that Matco and TD Bank conspired to make loans using secret three-year income projections, in violation of FTC franchise disclosure regulations. Specifically, it claims Matco would deliver the secret three-year income projections to TD Bank with a letter, instructing bank officials not to disclose the projections to loan applicants.

The bank would then use the income projections to qualify the loans for SBA financing. But Matco kept the projections secret because it knew of the high rate of failure among its franchisees and feared the lackluster projections would be used by failed franchisees filing suit. has received a copy of the alleged secret three-year income projections Matco is said to have provided to TD Bank but did not furnish to prospective Matco Distributors.  Click here for the alleged three year projections.


The lawsuit further states that Matco, TD Bank and other unscrupulous SBA lenders preyed upon unsophisticated borrowers because of their perception that the lender would not make the loan unless it believed the Matco franchise was an acceptable business opportunity.

According to the lawsuit, TD Bank profited through its collection of loan origination fees as well as interest on the loan principal, which it collected from borrowers while these improper loans were current. When the loans would ultimately fail, TD bank and other lenders would pass along the loss to the American taxpayer, as SBA loans are 90 percent guaranteed by taxpayers, according to the FDIC.

Matco, as the franchisor, would likewise profit from the sale of a new franchise and having its franchised distributors sell tool products for two to three years in a designated route, before ultimately failing and being replaced by a new franchisee.

“Matco and TD had the ability to perpetuate this scheme because of a self-serving lending culture that was more than happy to originate and collect fees and pass along the risk of loss to its customers and taxpayers, even if the law was being violated,” said Louis Tambaro, Esq., another member of Marks & Klein. “By bringing this lawsuit as a national class action, we look forward to exposing the dark underbelly of a destructive lending culture.”

Representatives of Matco Tools, TD Bank or others are invited to submit clarification, opposing opinions or rebuttals for publication.  Contact the site ADMIN at UnhappyFranchisee[at]

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Contact the author or site admin at UnhappyFranchisee[at]

Also read: MATCO TOOLS Franchise Complaints.

FRANCHISE LAWSUIT Alleges Matco Tools Scam, TD Bank Fraud

16 thoughts on “MATCO TOOLS Class Action Lawsuit, “Secret” Sales Projections

  • mike norton

    this is so true its picture perfect what happened to me,makes me feel so much better seing the fact,its hard to believe i was a top acura tech making 80 k a year for 25 years and had capital until matco and lost it all in two years,thanks hard to start over at 48, no american dream with this company,buy american

  • Tommy Cheung

    This so true. it has happened to all of us in one way or another, the American dream has been shot down by matco.thanks. We all wanted to own our own business, well it is not just your business, you are a subcontractor to ,matco. Dont do it run like hell.

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  • Junior

    Tommy Cheung failed in the tool business due to his own actions. He has never proven one single claim.

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  • I am a Matco tools distributor and have to say that this company has braught me and my family to the next level. After being a G.m tech for 15 years I made a change to be my own boss. Now I am selling tools and living the dream. Salesmanship is best not pushed but enjoyed. I am quite tired of reading negative talk about Matco. It is an awesome company and to realize this perhaps show up to an tool expo and see what successful Distributors act and think like. Thanks and have an awesome day….

  • Brent, I am happy for you that things are going so well. What you don’t realize is that the room full of guys at the tool expo getting there awards are greatly out numbered by the fallen. My starting class with a competitor a little over 5 years ago had 18 guys. There are 3 left. I hope for you and your family that you end up as one of the 3. The other 15 of us will do our part to warn others.

  • Franchise scam

    My class had 18 people in January of 2007. October of 2012 the last guy left in my class went out of business… So a little over 5 years everyone from my class is out of business.. Not good

  • Organized

    Those are amazing statistics for Entrepreneur magazines phony #1 tool company…My class had 14 guys, all are gone and the guy that walked the stage and won rookie of the year honors for our 1st year in biz was terminated the following year…

    Matco Tools Fraud

  • Dont buy a mobile tool franchise

    I seen guys win top 100 awards then file bankruptcy a year or 2 later… Hmmmm

  • octamnorom

    My graduation class had 10. There is 1 left after 9 years/..

  • Michael Hunt

    Support systems non existant had 20 managers and countless other franchise owners come and go over a 24 year period as a franchise owner with Matco, their so called “Route Surveying” is completely false these guys go into these shops ask a few questions right down a number and walk ( NOT AT ALL WITH YOUR BEST BUSINESS INTERST IN MIND), and hopefully to be done by noon to have a few cold ones I’ve seen it with my own eyes on several ocassions over my 24 years. Heck if your servicing a shop and you have one directly next door and it’s not on your route list your can’t service it, that will make a customer real happy and limits you to expand you business, If you loose a shop or several or they are a dead beat shop they don’t give ya replacement shop or they tell ya your route needs to be resurveyed well I been waiting since 07. When I signed up we had territories with room for expansion for your franchise and that’s history today. When you can purchase the exact same products for a 1/3 of the price somewhere else what service are you really providing a customer. When I signed up we where supposed to be exclusive and American made well that all went flying out the window over time.I finally gave up faith and hope in Matco and moved on 5/14.

  • This is just what I’ve been looking for as far as information goes.

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