Top 5 Reasons to NOT Buy a MAACO Franchise

MAACO is the iconic franchise most people think of first for bodywork repair. But is there a dark side to the franchise that includes Shoddy work, not honoring warranties, and lawsuits including allegations of fraud, misrepresentation and a lot more? We'll take a look at the MAACO franchise today on Franchise City.

A MAACO franchise will cost between $276,000 to $1,015,500 breakdown of costs on your screen. You will pay MAACO a 9% royalty on your gross sales and $1000 a week every week for advertising. Many franchise owners claim its hard to turn a profit with all the fees including this owner that claims he was pressured into buying the franchise and needs to make $14k a week just to breakeven. More on that in a minute

MAACO isnt well known for quality of work with an "F" rating with the BBB, 66 Unresolved complaints on complaints board, Majority 1 star on consumer affairs, and 54% 1 star on Trustpilot. Many of the complaints are for MAACO doing bad work and not honoring warranties like this customer who had to return three times and was then given rude attitude by MAACO employees. Or this news story about a customer who paid over $3000 only for his classic Cadillac to start bubbling shortly after. MAACO told him their warranty doesn't cover bubbles its only valid if the paint peels off. By then the warranty will probably be expired. Thousands of comments below this video suggested it was the customers fault for choosing MAACO in the first place.

So MAACO service quality seems to be perceived as low. But what about the MAACO franchise opportunity?
We took a look at multiple sources including MAACO'S own franchise disclosure and were surprised by what we found. There are pages and pages of lawsuits to be found on Justia involving both MAACO suing their franchisees and franchisees suing MAACO. Remember if you buy a franchise and go bankrupt, in many cases through the liquidated damages clause you could still owe $100,000 or more, and many franchises not just MAACO can sue you for that money. Recent lawsuits like this one indicate MAACO will pursue you in court even if you abandon your MAACO center because you are losing money.

This franchisee sued MAACO alleging common law fraud, and deceptive business practices and was awarded $150k. This franchisee sued for not receiving the support MAACO had promised, including site selection support. This is important so hang in there. MAACO countersued, and remember the MAACO parent company has billions of dollars and expensive lawyers so its tough to ever win but this case was settled for $675,000 in the franchisees favor.

Regarding site selection, this is when the franchisor helps the franchisee find a suitable location. Right now MAACO has about 400 stores in their system. But when I checked their FDD they have 172 stores not open. Almost half the system is people who paid the franchise fee and are waiting to open a location. Keep in mind that you sign the agreement it states if you dont open your location within 9 months MAACO can terminate the agreement or extend it for another 9 months at their discretion. But if you cant find a location you get your 10's of thousands in initial fees back right? No MAACO keeps it all.

You wont hear existing franchisees complaining very often as MAACO requests you sign a non disclosure agreement that can result in you getting sued, and as we noted these corporations have deep pockets. . This franchise owner suggests everyone he went to training had gone out of business. This person says the same thing and that 11 of his training partners ended up bankrupt, broke or weren't even able to open. This franchisee declared bankruptcy despite grossing over 1m a year and claims to have seen other franchisees lose their homes, retirements and everything they owned to MAACO. This commenter references the churn and burn mentality of MAACO just reselling failed stores to new unsuspecting franchisees to cover up the fact MAACO stores are seemingly not doing well. There are many, many more comments from ex and current franchise owners that often represent peoples life savings and retirements.

I dug a little deeper and this next number is crazy. Most buyers don't have access to this information but we keep it all on file here at Franchise City. I checked the MAACO disclosure documents from 13 years ago and in 2010 MAACO had 442 stores operating. Today after 13 years of selling hundreds of franchises to the public MAACO has only 398 stores open. Just in the last 3 years even after churning stores and selling stores MAACO showed a net closure of 61 stores.

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https://www.youtube.com/watch?v=inOng9on__w News story noted in video
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