MAACO Pledges Franchise Buy Back Promise for International Franchisees
Franchise International posted on its website that North American collision repair and auto painting center franchise, Maaco, has announced a buy back program to minimize risks to franchisees. The program is available to new franchisees and it pledges that Maaco will buy back a franchisee's business, at the franchisee's choice, if they do not achieve a reasonable sales level 15 months after the grand opening.
Mark Martino, Maaco's Chairman and CEO, commented: "This is an unparalleled career opportunity with no 'catch'. The details are completely spelled out in our Franchise Disclosure Document so the prospective franchisee will know exactly what the terms and conditions are before committing to buying a franchise. This initiative is our way of showing potential franchise owners our strong confidence in our brand and our operating system. Ours is a business with a recession-proof history and we are committed to building our business and helping our franchisees in every way we can."
The devil is always in the details, I wonder what price MAACO will pay? Is it a money back guarantee? I doubt it. A money back franchise guarantee, sounds too good to me.
The buy back agreement ought to be specific in the FDD.
Just looking at the article about the so called buy back proposal suggests an illusory proposal.
There are probably escape clauses in the buy back deal - definition of "reasonable sales level" too low (below shop break even averages) - franchisee must never have been in default - nature of default makes no difference. Any franchisee who mentions that he might need to invoke the buy back will start getting inspection visits in which numerous defaults are found.
This reminds me of a scam I ran into years ago with a "graduated royalty rate to help you get going". The top rate was reached almost immediately because the graduating standards were set to get to the top rate within a couple of months.
Finally, because of the kinds of tricks people have recently come to see me about regarding MAACO (mainly pump and dump on stores taken back and put up for resale - plus phony sales fiigures on top of the pump and dump), I inherently distrust any notion that MAACO would really take any risk of actually having to make good on this promotion.
There are many MAACO recent franchisees who would sue/arbitrate if they had any money left to pay a lawyer.
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Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School