I have been reading about owning a tool truck, 'snap on' wants 20,000 to 200,000 plus a truck lease to start. How much do snap on guys make a year? They have fixed customers that you must sell too lots of fees/bills a month people leaving town not paying you for tools Also long days $400 in gas a week ive read about guys only lasting 2-4 years and giving it back the turn-a-round nationwide is high for a tool guy.
I dont think im going to switch my job to try it. But i had a idea of starting a part-time gig called the 'Used Snap On Truck' truck.??? I was a Snap On tool dealer for almost 30 years. I may of been one of the few that broke the code to sucess in the tool business, but many others have done well also.
MAC Tools franchise complaints are streaming in to UnhappyFranchisee.Com from struggling & angry MAC franchise owners like Nick & Paula Tsantles (see video below) and Cory & Michelle Seguin (see MAC Tools Screwed Us).
Many of the things you mentioned are true and there is no hiding the fact that the days are endless and the weekends are sometimes non existant. With hard work,the right attitude and good customer service the rewards are very good. Do you have customers that leave without paying there bills, Yes you do but if you are in control of your business you monitor your credit outlay so as to not lose more than 2% a year. This is by no means an easy business but with dedication and persurverence you will not be disappointed.
From a customer's point of view, I have been on the same Airport since early 1979, altho at different locations. There has always been a 'snap on' vendor coming around, but they seem to ebb & flo with the business climate.
By that I mean, when the large Maintenance shop has a slow period, the truck stops showing up, unless you call him. When the Maintenance shop went under, he stopped responding to requests to come. I guess he thinks you've got something broke. They have no problem making the rounds when a couple of guys owe 'em money on a big tool box. There has been three guys who have gone bankrupt over the years selling Snap on tools, that I'm aware of.
At today's tool truck price levels, I can't imagine what motivates anyone to start collecting tools or toolboxes from any of the trucks, other than peer pressure. $150 for a set of 1/4' drive deep sockets, or $175 for the metric version, ratchets and extensions not included, ain't exactly the sort of thing that's gonna have customers chasing you down the road and waving money in this economy or in the foreseeable future IMO. I'd say any person considering any sort of franchise today needs to do so with a full understanding of the difference between 'what used to be' and 'what is'.
Personally, I'd much rather face paying off the million bucks it costs to get set up in a Chick-fil-a franchise than to have 1/10 that much debt tied to a tool truck where I also have to act as the finance company for all my customers. Things like this make Gary's hot dawg cart look pretty damn good to me. Ok, So lets say 100K up front, since there is some risk, lets say you need a 24% return on that money- Or 2000 a month. So 2000 a month plus truck lease plus gas etc plus reserve for no pays plus $30 an hour for your time for 50 hours a week or 6300 a month. Say the margin is 50%. Say the lease on the truck is 1K, and $200 in reserve for no pays. Thats 9500 a month X2 is 19000 gross sales a month to break even while paying yourself about $20 an hour for 50 hours a week.
Must really depend on territory and how the rep of the company is in the area. Ok, So lets say 100K up front, since there is some risk, lets say you need a 24% return on that money- Or 2000 a month. So 2000 a month plus truck lease plus gas etc plus reserve for no pays plus $30 an hour for your time for 50 hours a week or 6300 a month. Say the margin is 50%. Say the lease on the truck is 1K, and $200 in reserve for no pays. Thats 9500 a month X2 is 19000 gross sales a month to break even while paying yourself about $20 an hour for 50 hours a week. Must really depend on territory and how the rep of the company is in the area.IF this crok a crapo requires $100 K up front.
ONLY and IDIOT or someone with the desire to BURN that money would walk blindfolded into this deal. There are MUCH safer ways to make money. I wouldn't even consider it unless your territory was densely populated. I live in a rural area, and used to work closer to the Twin Cities.
Around here, turnover is high and I don't think the tool guys make much- one of them that eventually quit told me he was probably making $15/hr when times were good. Too much time and fuel between stops. However, the guys in the metro area have a lot more to work with. The Snap-On man that covered the territory where I used to work had been on the job for many years, but he worked long hours and extended a lot of credit, even in a target-rich environment. I think it's possible to succeed if you are smart and work hard, but this is not a business model that looks good to me. High risk, lots of overhead, and too many customers expecting you to be their personal bank. My son is a Toyota mechanic and I get a lot of insight to his profession.
Tools being one of them. I'd agree with it needs a densely populated area (with mechanic type shops) to make a good buck at it. Remember there is also going to be the MAC, Matco, Cornwell tool trucks to compete with. You need mechanics that want to make money to buy your tools. Time is money to a mechanic when he is getting paid 'book time'. New model years require new specialized tools too.
My kid probably spends $100/week on an average for any given year. However if you are only getting paid by the hour there is much less incentive to buy the latest/greatest tool gizmo.
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With time being money you don't have time to waste going to Sears or any number of other places to see if they either have what you need or have a replacement for the one you just broke. Besides, After a few years you already own every tool that Sears could possibly sell you. As a tool truck salesman you have to know what will save the savy mechanic time.
You can't be a passive salesman. Show my son a $50 something that will save him 10 minutes on a job he does every few days and he will buy it. Or something that makes his job easier. For instance, hauling around a air hose 8 hours a day gets old in a hurry. Battery powered 3/8' impact, $300, sold. Some extra, outrageously cost batteries, yep, give me 3. If it breaks and needs repairing the good tool truck guy will give him a loaner while getting the broken one fixed.
Or how about a 3' long 3/8' extension for those damn transmission bellhousing bolts. Beats piecing smaller extensions together. Or how about an extension that positively locks the socket on.
Yep, take a couple of them too in various lengths. It seems to me its the specialty tools that make the tool guy the real money.
The everyday sockets and wrenches just get you in the door the 1st time and keep the good will up when you have to replace them. I'm sure there are even more specialty tools and more expensive tools in the truck repair industry or other specialty mechanical repair businesses. Big dealerships are to the tool trucks advantage. Sort of like the roach coach pulling up to a construction site.
20+ mechanics come out to see your latest and greatest suck money from them tool. Race car shops also come to mind. Again you need to be proactive as a salesman and chase the business. I've known guys that worked on race cars in their own one/two man shops that had the tool truck stop weekly. On the other hand, if you, the mechanic, aren't buying, he isn't going to stop every week either. Tough life, but most things someone is successful at takes a lot of hard work and long term dedication.
I cover entrepreneurs, people who create value (and make money) out of the ideas in their heads. I spent three years on staff at Forbes before leaving to start, a PR firm for startups, in May 2014. (Don't worry, I never write about my clients.) In the age of 'The Social Network' myth, I get a kick out of delving into the reality of launching a business. Before joining Forbes I spent a year toiling in startup obscurity at Squidjob.com. Since my bedroom was the office, I never had to sleep under my desk.
Comments, tips and forceful criticism are appreciated. Email me at [email protected] Tweet me at Google+ me (or something). The author is a Forbes contributor. The opinions expressed are those of the writer. We received some unusually negative feedback regarding our pick of Snap-On Tools as the #1 franchise system in our latest installment of.
Jim Lager, a successful Snap-on franchisee based in, had this to say: Are you kidding? I am a top 10 in the world multi-franchisor for Snap-on Tools.
I operate 5 franchises. This article is so skewed.
Explain to me how the minimum investment for Snap-on Tools is $135,390.00 This article is misleading at best Snap-on is not the company they claim to be. Sean Kelly wrote an condemning our top pick on his popular franchising blog. He posted this comment: tool routes don’t “close” when they fail. They are reaquired and resold (sometimes again and again). One must read between the lines of the FDD. They say no closures, but more than 1000 franchises were reaqcuired. I can assure you those acquisitions were not so the franchisee could retire to Fiji.
These complaints and others generally raise two points: 1.) Our statement of Snap-On’s initial investment at $135,390.00 is too low. 2.) Our assertion that the firm had zero closures over the past three years is misleading. In order to explain how we arrived at these numbers, we need to wade further into our stated methodology. For our estimate of a franchisee’s initial investment, we wanted to know how much it might cost a prospective franchisee to enter a franchise system and begin running the business.
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For Snap-On, franchisees face two possible routes. They can buy a Standard Franchise for a 10-year operating license which costs between $150,614 and $289,080; or they can invest in a Gateway Franchise, a two-year license running from $17,925 to $83,941. The figure of $135,390.00 is an average of these two choices. Although accurate, we understand that this may be misleading for those looking to invest in a conventional franchise agreement. The second complaint is also directly tied to our methodology. In order to glean the number of closures in a system, and thereby make some judgment as to its health, we tallied events recorded under the labels “Terminations”, “Non-Renewals”, and “Ceased Operations for Other Reasons”, as found in the “Outlets and Franchise Information” section of the Franchise Disclosure Document. We did not include those labeled “Reacquisitions”. As Rob Bond, chief executive of the and publisher of Bond’s Franchising Guide, explains, reacquisitions can have two different meanings: A reacquisition could be positive in that the franchisor feels so confident about the franchise/brand that they want to own more units themselves. It could be negative if the selling franchisee can’t readily find a buyer and the franchisor reacquires the unit (usually for less than the initial investment) to preclude them from having to have a negative impact in total operating units for a given period.
Because of the ambiguous nature of reacquisitions we did not include this figure in our tally of closures over a three-year period. In general, this worked well. For mobile tool dealers like Snap-on this turned out to be a significant advantage.
Without fixed locations to shut down, Snap-on generally takes back struggling franchises for a small cash payment or the forgiveness of debt. Very few are ever terminated. “Our principal interest is to keep our end customers supported. We don’t want to leave territories open. Some of these become company stores, others are resold,” explains Tom Kassouf, President of Snap-on Tools Group.
If the goal was to express the health of a system, then stating that the Snap-on franchisees experienced zero closures from 2008 to 2011 is misleading. Clearly, franchisees failed but were not accounted for under conventional methods. For the future, a better metric may indicate churn, whereby we take all transfer events, including reacquisitions, into account. In separate telephone calls, both Mr.
Lager and Mr. Kelly identified other concerns about Snap-on that were not considered under our methodology, including lawsuits and restricted access to outside financing. In our attempt to create an objective list based solely on the data available in Franchise Disclosure Documents it seems we fall short in some important respects. Going forward we will work hard to improve our methodology to better account for the complicated nuances that accompany different franchise systems.
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