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Cornwell Quality Tools

Date of Incorporation: 1919

Franchising Since: 1996

Address: California

Description:
Cornwell Quality Tools has manufactured and sold professional-quality mechanics hand tools and related equipment since 1919. Cornwell Quality Tools distributes its products primarily by selling to dealer, who will sell directly from a "rolling tool store" van, primarily to mechanics, service managers and owners of auto and truck dealerships, motorcycle dealerships, fleet operations, construction and equipment contractors, independent repair shops, service stations, and body shops in a non-exclusive territory for which the franchisee is primarily responsible.

Franchise Offer:
Cornwell Quality Tools requires a new dealer to purchase an initial inventory of at least $35,000 at regular dealer net prices when entering into a Dealer Franchise Agreement. Cornwell Quality Tools must approve the initial inventory. New dealers who have been in the tool business previously and already have a suitable inventory and an approved vehicle will only be required to purchase an initial inventory of $10,000 from Cornwell Quality Tools. The franchisee must also establish a Reserve with Cornwell Quality Tools in the amount of $12,000, to be applied against the further purchase of inventory during the first 26 weeks of the dealership.

Financial Assistance: The franchisor offers some financing. For more information, refer to the FDD/ UFOC for Cornwell Quality Tools.

Item
Financed (Source)
Amount Financed
Down Payment
Term (Yrs)
APR %
Weekly Payment
Security Required
Liability Upon Default
Initial
Inventory
Purchase
Up to $42,000
$5,000 Minimum
208 weeks
9.99
Up to
$245.14
By ACH
automatic
payment
deduction
Inventory,
Accounts
Receivables,
Personal
Guarantee
Loss of Franchise, Attorney's Fees and Costs, Cost of Collection, Cost of Repossession
Cornwell Tech-Credit Customer
Financing
Up to $11,500 per Customer
None
Up to 4 yrs
19.99 $10 per
week
minimum
Products being financed
Attorneys Fee's and Costs, Cost of Collection, Cost of Repossession; Dealer suspended from Tech-Credit program
Deferred Billing
Up to
$8,000
None
10
Weeks
None
1/10 of
Initial
Balance of Deferred Invoices
None
Loss of Franchise, Attorney's Fees and Costs, Cost of Collection
Cornwell Box
Extended (CBX)
Up to $5,000
None
20 Weeks
None 1/20 Initial Balance of CBX Invoices
None Loss of Franchise, Attorney's Fees and Costs, Cost of Collection


Training and Assistance:
The franchisor will provide at least 31 hours of mandatory initial classroom training. The new Dealer Training Program will include classroom instruction on basic business procedures, computer setup, MM1 setup, customer relations, product warranty/repair, Cornwell CDL and Dealer Business System.
During the operation of the franchise business, Cornwell will provide two weeks free on-site training to the franchisee through a district manager who will work directly with the franchisee, giving advice, support and recommendations

Territory: The franchisee will be assigned a specific geographic territory by Cornwell Quality Tools that is designed to allow for sales growth. The franchisee does not receive an exclusive territory. The franchisee may therefore face competition from other franchisees or from other channels of distribution or competitive brands that Cornwell Quality Tools control. However, Cornwell Quality Tools has a policy of entering into an agreement with only one dealer for any territory.

Term of Agreement and Renewal: 
There is no set term for the franchise agreement and therefore no renewal term or renewal fee. To terminate, the franchisee must give 30 days notice.

Obligations and Restrictions:
If the franchisee meets the merchandise purchase requirements, Cornwell Quality Tools does not restrict the type of goods or services that the franchisee may offer. The franchisee must participate personally in the direct operation of the franchise business.

Total Number of Units:
Total number of franchised units for 2007: 584

Investment Table:

Ongoing Fees: Cornwell Quality Tools does not require that the franchisee pay any other recurring or isolated fees or payments, including royalties, service fees, training fees, lease payments or advertising fees or charges.

Initial Investment:

Name of Fee
Low
High
Initial Franchise Fee
$10,000
$35,000
Training Expenses
$0
$1,000
Real Estate
$0
$0
Initial Inventory
$10,000
$50,000
Vehicle   
$25,000
$75,000
Insurance
$250
$250
Additional  Funds -Three Months
$10,000
$30,000
Equipment/ Fixtures /Other Fixed Assets   
$0
$5,000
Reserve
$12,000   
$20,000
Computer System
$600
$2,500
Computer  Software
$845
$1,500
Security & Utility Deposits/ Business Licenses/Other Prepaid Expenses   
$100   
$7,500
Total for Convertees:
$58,795
$192,750
Total for new dealers:
$83,795
$192,750

 

The above information has been taken from the UFOC/FDD of Cornwell Quality Tools.


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