How Many Oil Changes Will $16 Million (and Counting) Buy?

The largest Jiffy Lube franchisee in the country has apparently decided it is best to stick with the Jiffy Lube name, and not go independent. This, after the expenditure (so far) of about $16 million in legal fees since it filed Chapter 11 in January. That is a lot of oil changes. It is worth noting that the bankrupt franchisee had listed its disagreements with Jiffy Lube as being among the reasons it had chosen to file Chapter 11. The chain had apparently been trying to negotiate with the franchisor (owned by Shell) for quite some time prior to filing, but could make no progress. Several weeks ago, the debtor in possession indicated it would likely leave Jiffy Lube to pursue independence as a Castrol Premium Lube center customer,(not a franchise) and would grow its stores nationwide. It had previously complained that Jiffy Lube was refusing to let it expand, and this was one of the reasons it wanted to leave the franchisor. What changed? Well, it now appears that Heartland has agreed to sell bulk Pennzoil in all of it's stores, instead of other brands. All of a sudden, the management of Heartland and Jiffy Lube are buddies again. And the owner of Heartland, a venture capital group, has agreed to put over $20 million back into the company to help it survive. (It had been reported that this group may have paid out three times the amount of its original investment in the years preceeding the chapter 11, so it may just be giving it back). And, this result only took one year, and $16 million (and counting) in legal and accounting fees. Amazing.