Matco Franchise = 36% Failure Rate

[litljay]

http://money.cnn.com/galleries/2010/smallbusiness/1004/gallery.Franchise_failure_rates/10.html

Tool manufacturer and distributor Matco is the riskiest investment on the top-10 "most popular" list, with more than one third of its SBA-backed loans going bad.

Matco is one of the least expensive franchises to launch, with no licensing or royalty fees. The tool company's franchisee distributors sell its tools and auto supplies out of branded mobile trucks, targeting likely buyers in their franchise territory.

This only takes into account SBA backed loans, but still pretty high failure rate, IMO.

Hope it's not a repost. I searched and didn't see anything.

 

[48548]

I also noticed that as well.... I was going to post but you beat me to it.

 

[caper]

Probably hard to convince guys to pay high prices for rebranded Craftsman tools.

 

[wreckercologist]

Probably hard to convince guys to pay high prices for rebranded Craftsman tools.

Selling tools isn't any different than selling anything else. You have to sell yourself.

 

[Mickey O]

Well since they are on the list of the "10 most popular franchises" that would mean they are a popular franchise, therefore more people trying it which would transform into more failures. A simple numbers thing, if you have 100 people trying to bowl a 300 game at Barney's Bowlarama versus 10 people trying to do the same thing Southport Lanes you'll have more failures at Barney's. The failure rate was 36%, it does seem high but without more information we'd only be guessing as to why they fail, could be a dozens different reasons.

 

[Billin21]

Id be willing to bet that Snap-On Cornwell and Mac have similar failure rates

 

[wreckercologist]

Id be willing to bet that Snap-On Cornwell and Mac have similar failure rates

Probably very true. Not everyone has a good head for business even though they may be good at selling or know the product line well. One of my old Snap-on dealers was pretty clueless about the tools most of the time, but from what I can guess he was a good business man (was a dealer for over a decade, now with Cornwell).

 

[Mickey O]

Id be willing to bet that Snap-On Cornwell and Mac have similar failure rates

I wouldn't be so sure, I suspect to become a Snap-On dealer is very different than a Matco dealer. Cornwell and MAC I don't know, they don't run as tight a ship as Snap-On.

 

[Az Scooter]

This does not surprise me, and actually, I am surprised it is that low. The average failure rate for small businesses in the first five years is nearly 90%, or at least, used to be. People with SBA Loans do have a leg up on avoiding failure because they do have to do their due diligence when writing up their business plan. This is a step that is often not accomplished, and leads to their future failure.

 

[tonydanzah]

I wouldn't be so sure, I suspect to become a Snap-On dealer is very different than a Matco dealer. Cornwell and MAC I don't know, they don't run as tight a ship as Snap-On.

Billin21 is a matco dealer

 

[bowtie3]

......

Probably hard to convince guys to pay high prices for rebranded Craftsman tools.

 

[jvitez]

AFAIK there isn't even a Matco dealer in Manitoba. Maybe I should start one?

 

[chadster1]

Id be willing to bet that Snap-On Cornwell and Mac have similar failure rates

I would probably agree.

 

[Billin21]

I wouldn't be so sure, I suspect to become a Snap-On dealer is very different than a Matco dealer. Cornwell and MAC I don't know, they don't run as tight a ship as Snap-On.

Actually Matco has very tight standards. Cornwell will let just about anyone with a pulse get a franchise, not sure about Mac

 

[sonexer]

A while ago I attended a Matco webinar regarding becoming a Matco Dealer. During the presentation, I asked what Matco's separation rate was. I was told that it runs between 12% and 14% a year. Matco said a separation rate of below 16% was considered good for this industry. Matco defined separation as leaving Matco for any reason, i.e. changing to another franchise, retirement, going out of business, etc.

Matco currently as about 1,500 dealers, according to various franchise review websites, so given a 13% separation rate that is about 195 dealers a year that part ways with Matco for one reason or another.

The CNN article was based on SBA loan numbers. Out of 321 loans, 36% failed. So, that is about 115 dealers that did not make it (does not specify if that is over one year or several years).

I guess what I am trying to say is that the magic is in the numbers and your prospective.

 

[bowtie3]

Actually Matco has very tight standards. Cornwell will let just about anyone with a pulse get a franchise, not sure about Mac

Then why does Cornwell only have less than half the dealers matco does? Seems to me a lot of Cornwell dealers are dealers that switched from other company's. We have two in our area, one former Matco, one former Snap-on, both say its much easier to deal with Cornwell than their former company's.

 

[Joe B.]

Then why does Cornwell only have less than half the dealers matco does? Seems to me a lot of Cornwell dealers are dealers that switched from other company's. We have two in our area, one former Matco, one former Snap-on, both say its much easier to deal with Cornwell than their former company's.

Same reason ugly chicks are low maintenance. Cornwell is the moped of the tool truck business.

 

[Billin21]

Then why does Cornwell only have less than half the dealers matco does? Seems to me a lot of Cornwell dealers are dealers that switched from other company's. We have two in our area, one former Matco, one former Snap-on, both say its much easier to deal with Cornwell than their former company's.

Well, I did it the other way, I switched from Cwell to Matco. As far as I can tell Matco is easier to deal with than cwell was. They actually approve people for credit so that you dont have to TP everything. Matco will let you "play" with their money more. They give you much better terms on paying your toolbill than Cwell ever did. Personally, I think they have less than half the dealers because they are not as good a company as Matco or Snap on for that matter. They in no way keep up with Matco or Snap-on in new products. How long did it take Cornwell to come out with a Fine tooth ratchet? Matco and Snap on have had them for years. I can also say from experience, that I dont rebuild nearly as many ratchets as I used to and there are a helluva lot more Matco ratchets out there than Cornwell.

Maybe im wrong? All I know is I had a helluva lot tougher time getting to Matco than I did Cornwell.

 

[bowtie3]

Same reason ugly chicks are low maintenance. Cornwell is the moped of the tool truck business.

So you would call the rolling Craftsman store known as Matco better than a 90 year old American family/employee owned tool manufacturer. I prefer SO of the truck brands but I guarantee you I will never spend one dollar on re branded Craftsman tools at 4 to 5 times the price. Matco makes flashy marketing campaigns and no tools. Cornwell make tools and leaves a lot to be desired in the flashy anything area, but I'll take the tool Mfg. over the tool distribution warehouse any day.

 

[Billin21]

So you would call the rolling Craftsman store known as Matco better than a 90 year old American family/employee owned tool manufacturer. I prefer SO of the truck brands but I guarantee you I will never spend one dollar on re branded Craftsman tools at 4 to 5 times the price. Matco makes flashy marketing campaigns and no tools. Cornwell make tools and leaves a lot to be desired in the flashy anything area, but I'll take the tool Mfg. over the tool distribution warehouse any day.

I've been with Cornwell and I deff. would say that

 

[bowtie3]

Well, I did it the other way, I switched from Cwell to Matco. As far as I can tell Matco is easier to deal with than cwell was. They actually approve people for credit so that you dont have to TP everything. Matco will let you "play" with their money more. They give you much better terms on paying your toolbill than Cwell ever did. Personally, I think they have less than half the dealers because they are not as good a company as Matco or Snap on for that matter. They in no way keep up with Matco or Snap-on in new products. How long did it take Cornwell to come out with a Fine tooth ratchet? Matco and Snap on have had them for years. I can also say from experience, that I dont rebuild nearly as many ratchets as I used to and there are a helluva lot more Matco ratchets out there than Cornwell.

Maybe im wrong? All I know is I had a helluva lot tougher time getting to Matco than I did Cornwell.

Thats cool, I'm glad your happy and wish you much success. I guess its just different circumstances for different people and different people like different stuff. I would say your absolutely right about new products Cornwell always lags behind.

 

[bowtie3]

I've been with Cornwell and I deff. would say that

As long as you can keep finding suckers to buy Craftsman tools for the price of Snap-on or more I'd say your set.

 

[Billin21]

As long as you can keep finding suckers to buy Craftsman tools for the price of Snap-on or more I'd say your set.

Will Do

 

[Hiball]

Wow, This thread as went full circle fast. While i do feel some of the Danaher produced tools family tree sometimes crosses paths and shares alot of similarities especially with Craftsman tools. If you have ever swung a Matco ratchet there is no comparing the feel along with Specialty auto industry related tools and On the Go service is what you pay for. Its not for everyone and if you dont depend on your tools to earn a living, you probably dont need to patronize Matco. Another thing... Has it ever been proven that Craftsman branded tools are Identical to Matco? Or is this just a common misconception because of there shared manufacturer? If this is the case why are we buying these brands instead of the Allen or GW? Dunno..

 

[Joe B.]

So you would call the rolling Craftsman store known as Matco better than a 90 year old American family/employee owned tool manufacturer. I prefer SO of the truck brands but I guarantee you I will never spend one dollar on re branded Craftsman tools at 4 to 5 times the price. Matco makes flashy marketing campaigns and no tools. Cornwell make tools and leaves a lot to be desired in the flashy anything area, but I'll take the tool Mfg. over the tool distribution warehouse any day.

It was just a joke at Cornwell's expense. I have limited experince with thier tools but I do know that Cornwell trucks are few are far between. The must be just good enough that they stay in business despite not being good enough to grow to to the size of a Matco or Mac dealer network.

There have been plenty of examples of Craftsman and Snap on selling the same rebranded tools. (example: Kastar stuff.) I also think it would be a stretch to say that Cornwell makes more of their own tools than Matco (Danaher).

edit: Sorry for engaging in this nonsense. I still thought it was funny to compare Cornwell to a moped.

 

[bowtie3]

It was just a joke at Cornwell's expense. I have limited experience with their tools but I do know that Cornwall trucks are few are far between. The must be just good enough that they stay in business despite not being good enough to grow to to the size of a Matco or Mac dealer network.

There have been plenty of examples of Craftsman and Snap on selling the same rebranded tools. (example: Kastar stuff.) I also think it would be a stretch to say that Cornwell makes more of their own tools than Matco (Danaher).

edit: Sorry for engaging in this nonsense. I still thought it was funny to compare Cornwell to a moped.

no need to apologize. I differ on one point of this post and agree on the rest. All trucks sell a lot of the same stuff. The difference is the hardline core products (sockets, wrenches, ratchets, etc.). Cornwell makes all of theirs, Matco makes none. Danaher makes it for Matco, Sears, Lowes, Napa, Armstrong and many more I'm sure. I also think that some of their new stuff is re branded gearwrench stuff which is also owned by danaher.

 

[chadster1]

I didnt realize that Matco used SBA backed loans to finance their franchise. Snap-on does their own franchise financing thru Snap-on Credit. You have to be able to jump thru some hoops to get an SBA loan so I would not say that getting a Matco franchise is easy or that they have low standards.

 

[Joe B.]

no need to apologize. I differ on one point of this post and agree on the rest. All trucks sell a lot of the same stuff. The difference is the hardline core products (sockets, wrenches, ratchets, etc.). Cornwell makes all of theirs, Matco makes none. Danaher makes it for Matco, Sears, Lowes, Napa, Armstrong and many more I'm sure. I also think that some of their new stuff is re branded gearwrench stuff which is also owned by danaher.

Well just to be clear, Matco is a part of the Danaher Corp. just the like Snap on truck business is part of Snap On Corp. Danaher makes a lot of products they sell under a lot of different brands just like you mention. Snap on corp does the same thing by selling products under the Snap on brand as well as other brands like Williams and Bahco.

 

[Diesel-Mech]

Well just to be clear, Matco is a part of the Danaher Corp. just the like Snap on truck business is part of Snap On Corp. Danaher makes a lot of products they sell under a lot of different brands just like you mention. Snap on corp does the same thing by selling products under the Snap on brand as well as other brands like Williams and Bahco.

He knows that...he trolls any thread Matco is brought up in, to what gains I'm unsure.

 

[Hiball]

Well just to be clear, Matco is a part of the Danaher Corp. just the like Snap on truck business is part of Snap On Corp. Danaher makes a lot of products they sell under a lot of different brands just like you mention. Snap on corp does the same thing by selling products under the Snap on brand as well as other brands like Williams and Bahco.

Bite your Tongue!!! How dare you attempt to smear mud on Snap On's good name. LOL

 

[bowtie3]

He knows that...he trolls any thread Matco is brought up in, to what gains I'm unsure.

No gains because I don't buy Matco, the dealer in our area is a nice guy but I won't do it. I just think that people need to know what they are spending their money on. If you notice the Matco dealers on here really don't jump in to defend their product and tell us what is different or that what I am saying is not true. Your right maybe I do jump in too often on these threads so I will tone it down some.

 

[Az Scooter]

Arguing with idiots. Sort of like arguing religion, no matter how much you disprove what someone believes, they are not going to change their mind.

 

[Hiball]

Arguing with idiots. Sort of like arguing religion, no matter how much you disprove what someone believes, they are not going to change their mind.

Ok, Who is the Idiots? and what has been proved? Your statement is quite vague almost to the point where i think you posted in the wrong thread. Maybe its just me, Dunno

 

[chadster1]

I prefer 6 point sockets over 12 point.

 

[tonydanzah]

I prefer 6 point sockets over 12 point.

 

[Hiball]

I prefer 6 point sockets over 12 point.

What about if the 12Point socket is being used by a USA stamped Dual 80 RAtchet

 

[chadster1]

What about if the 12Point socket is being used by a USA stamped Dual 80 RAtchet

only if it is a rusty impact socket.

 

[Art From De Leon]

And for no more MATCO tools that I have, whether they are identical to Sears, or not, I prefer NOT to go into a Sears store, just as I will NOT spend a dime at HF. Having said that, when my wife's car needs a battery, I will probably buy a DieHard, just because of their reputation. As far as Matco tools, I prefer Snap on, but I would rather help the tool truck dealer, than Sears.

How the 6pt. vs 12 pt socket debate got into this thread, I have NO idea, but 12 point in 1/4" drive, and 6 pt. in 3/8" drive and larger, UNLESS the fastener is a 12 point, or spline. My wrenches are either 12 point combination, or spline drive. I have ONE wrench with open ends on each end.

 

[chadster1]

And for no more MATCO tools that I have, whether they are identical to Sears, or not, I prefer NOT to go into a Sears store, just as I will NOT spend a dime at HF. Having said that, when my wife's car needs a battery, I will probably buy a DieHard, just because of their reputation. As far as Matco tools, I prefer Snap on, but I would rather help the tool truck dealer, than Sears.

How the 6pt. vs 12 pt socket debate got into this thread, I have NO idea, but 12 point in 1/4" drive, and 6 pt. in 3/8" drive and larger, UNLESS the fastener is a 12 point, or spline. My wrenches are either 12 point combination, or spline drive. I have ONE wrench with open ends on each end.

Die Hard batteries are not what they used to be.

I prefer Optima batteries myself.

 

[Art From De Leon]

Die Hard batteries are not what they used to be.

I prefer Optima batteries myself.

According to the Optima battery thread, they aren't what they used to be either.

Well, when the time comes I will probably go back to Ford. I once bought a Caterpillar battery for a F-150, and it didn't really fit, so I won't go that route again for when the PowerStroke needs batteries.

I kind of feel the same way about buying parts, as I do buying tools, when it comes time, you get what you pay for, and as the JD advertising used to say: "Only Genuine JD parts fit and wear, like the original".