Complaint Review: Kwik Industries Kwik Kar Lune & Tune

Kwik Industries sells Kwik Kar franchises. They are relatively inexpensive to get into and offer a terrific return on your investment based on their well-presented prospectus. The prospectus is filled with exhaustive demographic data, financial projections and plenty of glossy photographs and legalese. In fact, when read carefully, Kwik Industries guarantees nothing. When asked about the required level of business experience needed they will do an eloquent dance around the actual needs.

As it turned out, the prospectus provided is based on the best case ROI on business located in high-end areas such as Plano, The Colony, and Flower Mound... Our business struggled from the beginning.

Attached to the purchase is a personal note ($115,000.00) to Ray Ellis, which carries a 10% interest rate, in addition to your SBA loan. No problem when you think of the projected high ROI on investment. After a few months, we discovered that making both payments was nearly impossible.

Long story short, we eventually negotiated (verbal) with Ray Ellis. He agreed to forgive the interest. He also received a $50,000 payment when we refinanced the loan. The remaining to be non-interest bearing. He made a stipulation that the interest would be applied for any late payments. Invariable a couple payments made it to their office a FEW days late.

We recently sold the business. At the closing, when reviewing the documents we saw that the payoff to Kwik Industries included $67,000 interest. We phoned Kwik and they claimed that we defaulted because of a couple late payments. Again, terrific legalese on Kwik's part. They did have it in writing.

The issue is an ethical one. A 100% forfeiture for a couple payments that didn't go out more than a few days is, to me, unethical. We phoned Ray who said the matter was out of his hands as the organization structure had changed and that the "board" would have to decide. I emailed Ray Ellis and asked that a reasonable penalty be assessed for the infraction. I never received a response. A few days later my wife called (again) and it was, "Oh, no one called you? Well, the board voted not to refund the monies". We barely got out of this deal with our shirts. I suppose it's a matter of better luck next time, time to brush up on that business acumen. When considering some of the facts herein you might think Kwik Industries was fair. I ask for further consideration through private confidential correspondence. God bless Kwik Industries.

The main purpose of this letter is to raise pubic awareness of the business practices of Kwik Industries and other "well" intentioned franchise operations. Asking for God's grace and forgiveness. To exercise the right to share my experiences and express my opinion without the fear of litigation. We also ask that anyone (especially business neophites) considering such purchases to consult an attorney and a CPA before signing any contracts.

Footnote:
As a matter of record, we did eventually make the business a success while maintaining a high level of customer satisfaction based on honesty, integrity and quality services. The main reason for leaving the business is my age and the fact that I litterally broke by back. Regardless of the outcome, our ROI was well below our expectations based on Kwik Industries hype.

Dapen
Keller, Texas
U.S.A.