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Detail Garage VP Calls Lawsuit ‘Distressing,’ Touts the Positives


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Garrett Kubiak, a Detail Garage franchisee in Detroit featured in Franchise Times last September, criticized the lawsuit filed against the firm as “an awful representation of an individual owner’s inability to understand the franchise role in Chemical Guys."

Detail Garage VP John Mansfield gave a general defense against allegations in a sweeping lawsuit filed in California District Court in late January, but did not address specific claims made in Cardinal Investments One v. Detail Garage. 

“We wouldn’t want to say anything that either betrays the trust, the communication between franchisees or the legal process. We’re prepared and ready to go through the legal process and that’s about it,” Mansfield said in an interview last Friday, after a blog post in Franchise Times reported the lawsuit. “I’d be glad to tell you about the great, positive things we have going on, though.” Prior to the blog post, multiple requests for comment to Detail Garage executives, including founders Paul Schneider and David Knotek, went unanswered.

“I’m worried that anybody would have this perception of us. We try to work really hard to build relationships with our franchisees,” Mansfield said. “To me the most distressing point is, there’s a different perception of what we’re trying to do, I guess.”

Garrett Kubiak, owner of Detail Garage Detroit East, called the lawsuit “an awful representation of an individual owner’s inability to understand the franchise role in Chemical Guys,” in a comment on the blog post. “Please don’t allow people who don’t represent the very best in a brand to cloud judgment.”

Kubiak was a commercial and private banker for years in Los Angeles, before moving to Detroit and opening his Detail Garage franchise last April. “It's a tremendous undertaking,” he told Franchise Times in an article last September, adding he appreciated the corporate staff. “They’ll give you guidelines, and call and check up on you. You have got to be a decision-maker. You’ve got to be a go-getter.”

Owners of three Detail Garage stores in Arizona under the name Cardinal Investments One filed the lawsuit January 21 seeking class-action status against Detail Garage. It claims the founders are running a “shell-franchise operation” whose actual purpose is to boost revenue for the founders’ affiliate companies, primarily Smart LLC and ChemicalGuys.com and including 14 entities total, at the expense of franchisees.

The Detail Garage 2019 FDD lists monthly sales ranging from $146,220 to $22,810.

It does not list expenses for any stores nor cost of goods sold. It shows zero terminations or transfers of stores through 2018.

The FDD is clear on the supply chain mandate. Smart LLC is “currently the only approved supplier of these products to Detail Garage franchisees.” Ditto the ecommerce prohibition. “You may not use the internet or alternative channels of commerce to offer or sell the products and services,” it says.

Elliot Ginsburg of Garner & Ginsburg, who is not involved in this case, said, “It’s unfortunately not as uncommon as you might think. Pretty much every FDD review I’ve ever done” for prospective franchisees, “specifically mentions how frequently Item 8 in the FDD is overlooked. Item 8 is where they have to disclose purchase arrangements like that,” he said, adding people should pay attention. “You may have to buy a can of tomatoes for a dollar, when you could get it somewhere else for 50 cents.”

 

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Tom KaiserTom Kaiser is senior editor of Franchise Times. He can be reached at 612.767.3209, or send story ideas to tkaiser@franchisetimes.com.
 
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 

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