U-SAVE Car & Truck Rental Franchise Disclosure Document for 2017 doesn’t paint a pretty picture of the struggling Ridgeland, Mississippi-based franchisor. Franchise and employee lawsuits, a 25% franchisee turnover rate and a working capital deficit of $12,374,676 are a few of the red flags that stand out.
(UnhappyFranchisee.Com) U-Save Auto Rental has released its updated franchise disclosure document (fdd) for 2017.
You can read all 182 elecrifying pages here:
We’ve included some highlights (lowlights?) below.
Item 2 of the U-Save Auto Rental FDD discloses the following executives as the U-Save management team:
- Thomas P. McDonnell III Chief Executive Officer, President, Director and Treasurer
- O. Kendall Moore Vice President, General Counsel and Secretary
- Ashley M. Chambliss, CPA Chief Financial Officer
- Jason T. Brown Director. Franchise Sales
- Doug L. Foster Franchise Service Manager
- Gerry Foster Franchise Service Manager
- Carrie Kelly Director of Marketing
- Bradley Kjar Director of Operations
- Paul Wood Franchise Service Manager/Regional Sales Director
U-SAVE Car & Truck Rental Franchise Litigation
- Trek Auto Sales, Inc, v. U-Save Auto Rental of America, Inc.* (U.S. Dist. Ct. for the District of New Jersey, Case No. 3:15-cv-08323-FLW-TJB).
- U-Save Auto Rental of America. Inc, v. RAC Enterprises L.L.C.. and David Rapier (U.S. Dist. Ct. for the S.D. of Miss., Civil Action No. 3:12CV464 WHM-LRA).
- U-Save Auto Rental of America. Inc, vs Sanford Miller (U.S. Dist. Ct. for the S.D. of Miss., Case No. 3:13-CV-127 HTW-LRA).
- Sanford Miller and Narcoossee Place LLC v. Macquarie Group Limited. Macquarie Capital (USA), Inc., MIHI. LLC. Boketo. LLC. Adreca Holdings Corp,. and Bruce Donaldson (In the Supreme Court of the State of New York, County of New York, Case No. 651 612/13, Filed 3 May 2013).
- Bob Barton v. U-Save Auto Rental of America, Inc.** AAA #69-166-57-14.
* Trek Auto Sales, Inc. franchisee lawsuit against U-Save is currently in arbitration
** Former U-Save executive Bob Barton sued U-Save after his employment was terminated for “cause.” On May 6, 2015 “the arbitrator issued an award, in Barton’s favor, in the amount of $596,645.44.”
U-SAVE Car & Truck Rental Franchisee Turnover: 25%
U-Save terminated 31 franchises during that time.
U-Save had a 25% turnover of franchisees during that period.
The U-Save domestic franchise count declined from 104 operating units at the start of 2014 to just 92 units at the end of 2016, a 16% decline.
Franchise Services of North America (FSNA) Has a Working Capital Deficit of $12M
The audited financial statements for franchisor Franchise Services of North America (FSNA) include this statement under “Plan of Operations”:
The Company’s future operations are dependent upon the Company’s ability to maintain profitable operations and FSNA’s ability to obtain additional capital to meet its cash flow needs. In addition, FSNA has a working capital deficit of $12,374,676 as of September 30, 2016 primarily associated with liabilities incurred in connection with its acquisition and reconsolidation of Simply Wheelz. Management believes the Company has sufficient capital to meets its obligations in the ordinary course of business through fiscal 2017, but may require additional capital in subsequent periods. There can be no assurance that FSNA or the Company will raise additional capital on favorable terms or at all.
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