Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Considering a Mac Tools Franchise? Don’t Overlook These 16 Important Franchise Fees

by Franchise Chatter on March 31, 2017

in Franchise Fees, Mobile Tool Franchise



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Don't Invest in a Franchise Until You Check Out This List

If you are considering a Mac Tools franchise, don’t get blindsided by these 16 important franchise fees (from the initial franchise fee, to the royalty fee, to 14 other fees found in Items 5 and 6 of Mac Tools’ 2017 FDD).

1.  Initial Franchise Fee:  $3,000

  • In order to acquire a Mac Tools franchise, you must pay to Mac Tools an initial franchise fee of $3,000, which, unless financed by Mac Tools in circumstances as described in Item 10 of the disclosure document, is due in full upon the signing of the Franchise Agreement by Mac Tools. The initial franchise fee is not refundable.

2.  Starter Inventory:  up to $65,000

  • A payment is required to be made to Mac Tools by a franchisee for the initial inventory of tools purchased for resale (the “Starter Inventory”). Inventory purchased for resale is sold to the franchisee at Mac Tools’ published prices established from time to time by Mac Tools.
  • Occasionally, existing Mac Tools tool inventory located in the vicinity of the route to be served by a new franchisee will become available for purchase and a new franchisee in the area may desire to purchase the existing tool inventory to serve as the Starter Inventory.
  • In this event, Mac Tools reserves the right to determine whether the existing inventory can reasonably be substituted in place of the usual Starter Inventory package, and if Mac Tools agrees to permit this, the new franchisee will be required to sign documentation to reflect the franchisee’s request and Mac Tools’ approval of the request.
  • The current Starter Inventory package is offered at a price in an amount of up to $65,000. The Starter Inventory package consists of various components, a toolbox, and a tool cart.
  • Included with the Starter Inventory is a computer system meeting Mac Tools’ requirements and specifications, loaded with the Mobile Business Assistant (“MBA”) software and capable of communicating with the internal computers at Mac Tools.
  • The franchisee also has the option, in addition to the Starter Inventory, to purchase from Mac Tools internal tool displays for use inside its truck in an amount up to $1,500.
  • Mac Tools may, in its sole discretion, allow a franchisee, including franchisees that qualify for the Mac Tools Veterans Program, to operate more than one assigned Route. For each such additional Route operated by a franchisee, the franchisee will be required by Mac Tools to purchase the Starter Inventory Package, which includes a computer system meeting Mac Tools’ requirements and specifications.
  • Occasionally, Mac Tools may allow a franchisee commencing an additional Route to use part of the franchisee’s existing inventory to satisfy the requirement that the franchisee purchase Starter Inventory. In these instances, the franchisee will be required to purchase a computer system, with an estimated cost of $3,200 from Mac Tools for the additional Route.

3.  Mac Tools Truck:  $10,000 to $120,000

  • The franchisee is required to purchase or lease a new or used truck for the operation of the Mac Tools Business. The franchisee can purchase the truck from any vendor provided that the truck is one of the models approved by Mac Tools and meets Mac Tools’ current specifications.
  • Occasionally, Mac Tools may have used trucks for sale to franchisees. The prices of such trucks vary depending on the condition of the particular trucks.
  • Mac Tools estimates the range of prices of trucks to be from $10,000 to $120,000.
  • The cost of leasing a vehicle is dependent on several factors, including the price of the truck, the year of the truck, and the interest rate charged by the lessor. Mac Tools estimates that your lease of a truck will require a down payment of $0 to $5,000, and monthly payments from $1,200 to $2,000.

4.  Business, Promotional, and Merchandising Supplies:  varies

  • In addition, the franchisee may, but is not obligated to, purchase business, promotional, and merchandising supplies, which are offered at competitive prices through Mac Tools or from independent suppliers approved by Mac Tools.

5.  Annual Fee:  $900

  • Due Date:  On or before January 15th of each full calendar year.
  • Payable in the form of a debit to your trade account.

6.  Ongoing Purchases of Products to Replenish Tool Inventory:  variable, depending upon sales by franchisee

  • Due Date:  Payable weekly.
  • Total price of product, less 2% if paid in full within 10 days, or full price if paid within 30 days.

7.  Late Charge:  1.5% per month (18% per year) or the highest rate permitted by law (whichever is lower), based on the cash price of products purchased on a trade account and not paid when due

  • Due Date:  Payable upon demand.
  • Mac Tools may start applying the charge under the Purchase Agreement when purchase on a trade account is at least 10 days past due, and may continue to apply it to the unpaid balance until such purchase is paid in full.

8.  Costs and Legal Fees:  will vary under the circumstances

  • Due Date:  Payable upon demand.
  • Mac Tools is entitled to recover damages, costs, and expenses, including attorneys’ fees and disbursements, that Mac Tools incurs (1) as a result of (a) default under the Franchise Agreement, or any related agreement, (b) enforcement of rights under the Franchise Agreement concerning confidential information, (c) enforcement of rights under the Security Agreement, (d) Mac Tools’ efforts to collect amounts owed under the Purchase Agreement, (e) your assertion in arbitration or litigation that the representations and warranties made by you in the Franchise Agreement are not true or accurate, and (2) because it was required to compel arbitration.

9.  Indemnity:  will vary under the circumstances

  • Due Date:  Payable upon demand.
  • The franchisee indemnifies Mac Tools from certain claims and liabilities connected with the Mac Tools Business and listed in Section 3.18(a) of the Franchise Agreement.

10.  Mac Tools Credit Program – Remittance of Payments:  will vary under the circumstances

  • Due Date:  Payable weekly.
  • Under the Mac Tools Credit Program, a franchisee is obligated to make weekly collections of amounts owed to Green Sky on the franchisee’s customers’ accounts. Mac Tools will collect such amounts from the franchisee’s bank account on a weekly basis.

11.  Mac Tools Credit Program – Management Fees:  9% of the amount of each purchase by the franchisee’s customer on a Mac Tools Credit account (4% of the amount of each purchase by the franchisee’s customer on a Mac Tools Credit account is paid to Mac Tools.)

  • Due Date:  Payable at the time of sale to a franchisee’s customer.
  • Under the Mac Tools Credit Program, a franchisee is obligated to pay 9% of the amount of each purchase by the franchisee’s customer on a Mac Tools Credit account to be divided between GreenSky and Mac Tools.
  • At the time that Mac Tools credits a franchisee’s trade account for its customer’s Mac Tools Credit account purchase, Mac Tools keeps 4% of the purchase price, which is the amount of each purchase by a franchisee’s customer using a Mac Tools Credit account that is owed to Mac Tools by a franchisee, and Mac Tools transfers 5% of the Mac Tools Credit account purchase price to GreenSky, which is the amount of each purchase by a franchisee’s customer using a Mac Tools Credit account that is owed to GreenSky by a franchisee.

12.  Reimbursement to Mac Tools for Chargebacks for Certain Mac Tools Credit Accounts:  will vary under the circumstances

  • Due Date:  Payable upon demand.

13.  Large Ticket Account (LTA) Administrative or Service Fee(s):  estimated amount of LTA fees is 3% of purchase price of Large Ticket item. Estimated amount of annual LTA administrative or service fees paid by a participating franchisee is approximately $74.

  • Due Date:  Payable weekly by direct debit payments from franchisee’s designated bank account.

14.  MBA Software Licensee Fees:  estimated amount of recurring monthly license fee is $25.

  • Due Date:  Payable in lump sum in the form of monthly debits to your trade account.
  • Mac Tools does not currently charge a recurring monthly license fee, but reserves the right to do so.

15.  Extended Terms Program (ETP) Administrative or Service Fee(s):  estimated amount of administrative or service fee(s) for each ETP account is $25.

  • Due Date:  Payable in lump sum in the form of a debit to your trade account.
  • Mac Tools does not currently charge an ETP administrative or service fee, but reserves the right to do so.

16.  Renewal Fee:  one-half of the then-current initial franchise fee

  • Due Date:  Payable in lump sum at the time of renewal.



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