AM Online

Wives of former Snap-on Tools dealers allege franchise fraud in US court

In what is believed to be first action of its kind, lawsuits were filed this week against Snap-on Tools, Inc. on behalf of wives of former New Jersey and New York Snap-on franchised tool dealers, alleging they were harmed by the company's "false, fraudulent and misleading representations" that not only led to the collapse of their husbands' franchises, but also resulted in the loss of the wives' own money and family savings.

"To the best of our knowledge, this is the first time that spouses who are not directly involved in a franchise have sued a franchisor," said Susan P. Kezios, President of the American Franchisee Association. Collectively, the four New Jersey plaintiffs lost initial investments exceeding $150,000 and owe Snap-on over $715,000.

The lawyers representing the plaintiffs say the economic challenges facing Snap-on franchisees are underscored by very high dealer losses and turnover in its network. “Through our discovery process, we learned that in the company's Eastern Region in 2002 alone, dealers sustained $2.9 million in losses. Further, a high turnover rate caused 387 dealers to leave the business during the 2000-2002 period, being replaced by only 377 new dealers."

A group of women have formed WASO (Wives Against Snap- on), which has established a website, www.snap-onfranchisefraud.com.

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest


Login  /  Register

Comments

No comments have been made yet.