Bottom line
- Total investment $104K – $376K including a $10K franchise fee.
- Average unit revenue of $517K/year.
- Rated STRONG with a risk score of 47/100. SBA loan default rate of 0.0% across 48 loans (below the industry average).
- 29 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Matco Tools unit return on the cash you put in?
Unlevered ROIC · per unit
29%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Matco Tools units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$723K
on $3.6M purchase
Total debt
$2.9M
SBA $1.8M + senior + seller note
Overview
About
Matco Tools franchisees operate as independent mobile distributors, traveling to service shops, garages, and manufacturing facilities to sell professional-grade hand tools, power tools, and diagnostic equipment directly from a truck or service vehicle. Franchisees manage inventory, customer relationships, and route logistics while building recurring revenue through weekly or bi-weekly stops at established accounts.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 28 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Matco Tools presents a CAUTION-to-HIGH RISK profile due to system contraction, litigation exposure, non-disclosed financials, and unclear profitability in a declining market.
Score breakdown · what drove the 47 / 100 rating
- 01MINORSystem declining 3.9% YoY with 1,741 units — indicates market contraction and potential saturation in mobile tool distribution
- 02MEDNo disclosed net income despite $516,708 average revenue — suggests razor-thin margins or significant unreported costs
- 03HIGHMultiple litigation exposures including data breach class action, collection actions against distributors, and independent contractor misclassification claims — indicates operational and legal instability
- 04MINORUnknown royalty structure prevents accurate profitability analysis — lack of transparency is a major red flag
- 05MEDHigh investment range ($104K-$376K) combined with undisclosed net income creates poor ROI visibility and capital at risk
- 06MINORClass action data security incident suggests inadequate systems and potential franchisee liability for customer data loss
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Matco Tools · FDD (2026) PDF