CORNWELL TOOLS Franchise Scam or No Scam?

“Eight former Cornwell tool dealers, including David Bachrach, sued Cornwell Quality Tools Company for compensatory and punitive damages, alleging common law deceptive trade practices, violation of Ohio’s Business Opportunity Law, fraud, fraud in the inducement, consumer fraud, negligent misrepresentation, and breach of fiduciary duty.


“The former franchisees brought class action claims in Summit County Common Pleas Court as representatives of a proposed class of nearly 500…

“The plaintiffs (eight former Cornwell tool dealers) have alleged that:

(1) Cornwell’s trade practice is to draw the plaintiffs and others into Cornwell’s sham enterprise;

(2) in the sale of a business opportunity to plaintiffs and others, Cornwell has not acted in conformity with the Business Opportunity Laws of Ohio;

(3) Cornwell committed fraud and fraud in the inducement in obtaining the franchise agreements from plaintiffs and others through material misrepresentations designed to greatly distort the risk involved in the franchise;

(4) Cornwell committed consumer fraud in connection with the sale of services; (5) Cornwell negligently misrepresented facts regarding the likelihood of success of the franchise to the damage of plaintiffs and others;

(6) Cornwell breached its fiduciary duty to its franchisees; and

(7) Cornwell acted with reckless disregard of its franchisees’ rights and well being. All of these claims stem from the formation of the contract and the contractual relationship whereby plaintiffs became franchisees of Cornwell. “

Source:  Bachrach v. Cornwell Quality Tool Co., (Ohio 2011)

The court determined that the matter was to be settled via private arbitration – so the proceedings and outcome may never be made public.

ARE YOU FAMILIAR WITH THE CORNWELL TOOLS DEALER FRANCHISE OPPORTUNITY?  IS IT A GREAT FRANCHISE OPPORTUNITY, A FRANCHISE SCAM OR NEITHER? PLEASE SHARE YOUR OPINION BELOW.

Contact the author or site admin at UnhappyFranchisee[at]gmail.com.



unhappyzee

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  • Mr. Pritchett,

    You are 100% correct. But what happens when you build your business and then your franchisor tells you you violated your contract with them? All they want is what makes your franchise business successful! The hard work you put in to GROW it and EXPAND it! Did you know in every franchisee contract with ALL the tool selling franchises there is an "Arbitration Clause". Why is that! Because attorney's and judges have been conditioned by our leaders through FUNDING (see IFA and FRANPAC) to protect franchising at all costs. The costs being successful franchisees like myself who had CRIMINAL ACTS imposed on there franchise by their franchisor. Threats from a Regional Manager to surrender shops or lose your franchise. False reports from District Managers to make it look like I had more customers to service than I had. Being terminated for a PURCHASE AVERAGE that your franchisor created because your District Manager promised to reevaluate your route and never did so in 1 1/2 years. Then when you get your separation letter stating if you don't cure in 90 days you will be terminated and call headquarters to ask "How can you terminate me for my purchase average when my District Manager promised me to re-evaluate my route for the last year and a half and never did? That's is when they create a false survey which states you have enough customers but you suck as a salesman. Then when you receive that false survey and threaten to lawyer up they hand you a NEW route with a lot more customers three days later which enables you to sell tools in an amount above the required purchase average for the next 1/2 year. Then when you fall below that purchase average again, 215 days later, they terminate you based upon the separation letter you received 8 months ago but according to your own states laws your franchisor CAN NOT terminate without giving 10 days to cure. You tell me how the Attorney Generals office, Federal Trade Commission, Federal Bureau of Investigation, State Senators, State Representatives, State law enforcement, County law enforcement, Local law enforcement, Prosecuting Attorney and 4 attorneys you paid to represent you against your franchisor can not get you justice? I believe you are successful in your franchise at this current time but go back and read your contract. If it has an ARBITRATION CLAUSE in it you are SCREWED buddy! If and when your franchisor wants to pursue your franchisor you better have thrown the first punch. My problem is that I waited till I was victimized by Matco to complain about the violations committed against my franchise. Now I am just a disgruntled employee who did not like getting fired. Even though I was supposed to be a business owner that has SO MANY constituents (Governor Mike Bebe, Senator Boozman, Senator Mark Pryor, Rep. Steve Womack, Rep. Les Carnes) and consumer departments: Federal Trade Commission, Federal Bureau of Investigation, Attorney Generals office, State law office, County law office, Local law office and County Prosecutor none of them will give a RATS &$% if your franchisor committed felonies against your franchise. Attorneys your hire SCREW you over to settle other constituents or leave their partners after you give them money and charge you to talk to Matco when they promised their services to sit down at the mediation table. Of course, your franchisor will ask your attorney for the same information your last attorney gave them so your new attorney can run your bill up after your franchisor mediates 30+ franchisees he never told you he was representing you as a group. Then put pressure on you to mediate for FAR LESS than what your damages are because the deal is for all his clients or none. Your attorney will tell you that these other victims have suffered enough and that while this deal isn't that good for you it will help the other clients you help bring him some closure. Then when you say no he terminates his representation of you and others to resolve 30+ franchisees so he can put $250,000 in his pocket. Keep telling yourself right now that you are doing well but if you don't already have an attorney and are paying him for future services you are making a grave mistake.

  • Toby,

    I am sorry for you and your family. I have been there and experienced what you are going though. It put my wife and I in a pretty deep depression, ruined our perfect credit, and took all of our money. Please know you are not alone and there are thousands of guys out there just like us. I highly recommend you speak with a bankruptcy lawyer and you do it soon. They normally will give you a free consultation to go over your options and will give you good advice. The BK will cost between $1k-$1500. You could talk to a lawyer about suing and they will most likely make tons of promises to you. They usually require $5k retainer + billable hours with no guarantee or timeline. In the end I think most guys end up with a settlement that pays the lawyer and forgives the debt. Nothing ends up in your pocket and your credit is still ruined and you still may owe legal fees. Before you pay anyone or file make sure you cover your back sales tax if you have any and then start your life over. You will find that you will most likely be able to keep your house and personal possessions with BK. It may be perceived as a bad word but for most x-tool guys and business owners it is the best way to protect yourself and start over. It is a fresh start. I can't tell you how good it feels to have my life back again! You can rebuild! Good luck and keep warning the suckers like us!

  • I am at my 1 year as. Cornwell tool franchise i like it there are up and downs . I watch my purchases and my bank account very close i dont spend money crazy i ask questions and get answers i go to work every day talk to customers sell tools and mostly collect money. This is a business so fail some rise but the one thing is if you are below the purchase mark they require you are failing you are not selling and your not collecting .

  • I was the only successful Cornwell dealer in the RI market, lasting over 14 and getting (according to my DM) no calls from disgruntled tool buyers about me. i.e they were satisfied. My purchase average was subpar but it was not discussed at any length because there was no one else to service them if they moved and the customers knew that. Many wouldn't buy CW because of that important factor.

    Then I went to a Medco show. they found out and terminated me. I only went because:
    their prices were better, they flew me there for free with complimentary room and food and drink, and gave me a year to pay my tool bill. I told CW I would be happy to show the valid reasons why I went for their benefit, but they refused. They want the franchisees to know that outside buying is frowned on. For sure it is but the outside buying kept me viable as a franchise. The fact that I was relatively solid ( although like so many I paid myself last) really didn't matter to the bosses at Cornwell.

  • I’m not an attorney, but if you’ll email me your information about your situation that you have with Cornwell tools and your contact information I have family members that work with the Attorney general Office and I think we can hold Cornwell tools responsible for their actions. I almost became a Cornwall to dealer, but I didn’t sign the bottom line. See what kind of company they were so send me your email complaints and your situation and we’ll go from there.

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