Question:

Pirtek Franchise. I was giving serious consideration to purchasing a Pirtek franchise but am now

by Guest920  |  12 years, 9 month(s) ago

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I was giving serious consideration to purchasing a Pirtek franchise but am now having second thoughts after seeing a CNN report on the trouble a franchisee faces when the franchisor goes bankrupt. Of course every franchisor says it will never happen to them, but it does. It happened to Pirtek in France and if it happens here in the USA my entire support and inventory system would be gone. Basically everything I paid up front fees to have, would disappear. It is my understaning that several Pirtek locations have recently been taken over by the franchisor, and many more are on the verge of bankruptcy. How can I find out the truth about what is really happening at Pirtek USA?

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  1. Guest1420
    "Business owners who operate under a franchise agreement pay royalties for the use of the franchisor's brand in return for the benefits of the parent company's marketing, supply chain, operating procedures and other established systems. All that can fall apart if the franchisor files for bankruptcy. As the recession drags on and franchise royalties fall, franchisors can run into trouble covering their fixed operating costs -- particularly if they are unable to generate new franchisee locations." From an article at CNN/Money

  2. Guest8968
    If you want a copy of the press release announcing the Pirtek France Bankruptcy I have it. I also have the bankruptcy filings for Nashville, Plano, Houston, Tampa and others. Pirtek has taken over many locations and is struggling. Pirtek franchisees are facing the bankruptcy challenge every week. Accounts Recievables are sky high, sales are way off, cash flow is suffering. A recent large price increase has pushed more franchisees over the edge, many locations are slated to close later this year. Stay clear of Pirtek, it will do your wallet good. Thanks, Scott. 813-318-1258
  3. Guest2369
    As a past Pirtek Franchise owner.  All I can say is buyer beware.  You will never get your return on investment and fall deeper & deeper in debt.  Many franchises have gone backrupt, closed or bought back buy the franchisor at bargain basement prices.
  4. Guest8018
    Just heard a bunch of Poorteks ( what Pirtek should really be called) closed down this year. All these closed locations are supposedly in Large cities like Dallas and Indianapolis, Los Angeles etc...Be very careful of this franchise. It seems like the old owner is done with the Poortek business and has just let his remaining few franchisees rot on the vine. Clearwater is bankrupt, Plano is bankrupt, Nashville is bankrupt and I have heard of many more in California that are about to close or file for protection. Google "Pirtek Bankrupt" or go to www.franchiseperfection.com and search Pirtek. This company is imploding so the news changes daily. Stay away from Pirtek.
  5. Guest8723
    Nothing worse than Pirtek. So many stores have closed, so many franchisees have lost everything. Pirtek claims "no experience required" and that Pirtek "is a well supported business format franchise". We went Bankrupt. We were not supported at all. The training was very basic and ended up being useless. We were given awards by Pirtek, but the awards mean nothing. Awards are just another ploy to get you to think they are on your side, when in fact they are not. The whole crew at Pirtek are dubious, and motivated to do one thing! Take your money and claim you must not be following " the system". I wish I would have researched Pirtek better and listened better. There is no system, there is no profit except for the owner of PirtekUSA. Pirtek has to be about the worst place you could ever invest your time or money. Walking away after 4 years of hard work, following the rules and still coming up with Zero is bad. I would strongly suggest you talk to all past franchisees, and follow up with Scott Layer. Scott has the details. I wish I would have.
  6. Guest9410
    Pirtek, is a poorly operated franchisor, with very untrustworthly people in control.  I doubt that they no how to tell the truth, be very, very weary of this operation
  7. Guest1484
    Could be worse, in the UK 1/3rd of all Pirtek Centres are in the high dependency category
  8. Guest6642
    Recently, I did some investigation into PirtekUSA. I found a certified PirtekUSA financial statement for 2006, 2007, 2008, and 2009. All company owned stores lost money. Overall sales were down by more than 30%, the yearly average store sales numbers were below $400,000. That is only $33,000 per month, well below what is required to make a profit. Here are the real numbers.                09    08     07     06
           Sales/revenue  1,013   740   1,249  1,145 (Company owned stores only)
           Losses          (273) (137)   (256)   (84)
      Numbers times $1,000.
         According to Pirtek records they had between one and three company owned stores for the above time period. If they can't operate their own stores at a profit with all their expertise and knowledge what makes anyone think they can start a Pirtek franchise from scratch with only 3 weeks training and survive? The answer is it can't be done because Pirtek USA charges too much for product and prices the franchisees out of the hose business. By the way, these three company owned stores were cherry picked from the eight that failed. The mustard is really coming off the hot dog.
      Competition is steep in the hose business. Buying foreign made hoses and fittings, shipping them to PirtekUSA in Florida, re-packaging it, marking it up and then charging again for shipping to the franchisee kills the profit margin. In 2005 Thirteen Franchisees retained counsel alleging prices were not reasonable. In 2005 there were around 33 franchisees. That means 40% of all franchisees had enough conviction to file an arbitration. I suspect 80% of the franchisees agreed that prices were too high, but did not want to fight due to lack of funds. To make matters worse, Pirtek USA is currently in litigation with two former franchisees. To sum it up. All Company owned stores lose money. 40% franchisee revolt in 2005. Product Prices marked up by as much as six times. Two ex-franchisees in litigation now. Portland, Indianapolis, Clearwater CLOSED. How much more information do you need before you make a stupid decision? All this data is available, all you have to do is look.
  9. Guest4512
    Please do not give Mr. Scott Layer the credit he is looking for, what he fails to tell you, that HE alone was the down fall of his location. Follow the rules, treat people with respect and not call them "f**king idiots" on a day to day basis drank less, and throwing things at your employees and maybe his business would have worked. He was the ultimate down fall of his location and he's very bitter. Move on Scott...it's been over 5-1/2 years. Seriouly...just move on.
  10. Guest8445
    Dear Scott:
    Up to your same old tricks.
    Your stay in prison for domestic violence didn’t change your attitude.
    Maybe you are still mad about your wife being a stripper or are you upset about your wife being completely nude on adult web sites...what would your kids think of this if they were to see her that way? Maybe you ought to stick to posting comments about the best "gentlemen’s clubs" in Tampa or maybe you ought to get a life!
  11. Guest526
    I appreciate all the posts, about Pirtek. It is very important to voice concerns and I think it is paramount to try and be accurate. When I post about Pirtek I mean PirtekUSA. My focus is PirtekUSA. Morgan Arundel, owner of PirtekUSA is an unsavory businessman. More PirtekUSA locations have been abandoned, Terminated or gone Bankrupt than have ever been successful. I am an expert concerning PirtekUSA. I received the “Rising Star Award” as well as franchisee of the year nomination and was awarded “Most Enthusiastic Franchisee”. My First Year sales eclipsed all sales records for all franchisees. I know the so called Pirtek “system” perfectly. I was Terminated( three years later) because I pointed out the flaws in the “system” and proved that there was not an adequate margin on product. Additionally, key PirtekUSA emoplyees came to work for me because they realized how unsavory PirtekUSA is operated. I also initiated a large scale Arbitration against PirtekUSA concerning high prices for product, as Morgan Arundel and others made, and continue to make false statements against me. I regularly consult with prospective franchisees as well as hydraulic hose professionals across America. There is no margin as a franchisee in the American Pirtek “system”. PirtekUSA charges fees for shipping, for computer use, for set-up’s as well as territory fees, advertising fees, marketing fees and 4.5% of gross sales on both labor and product. All this on top of product prices that are marked up by as much as six times market prices to the franchisee.
       The best you can hope for in this country when you buy a Poortek is a Low paying high risk job. This is not my idea of success. The record speaks for itself. 16 of 35 Franchisees went to Arbitration with PirtekUSA, yes we lost but you have to ask why almost half the “system” filed Arbitration.It is a fact that more locations have closed than have ever been successful. Recent Poortek Financial statements show that all Company owned Poortek’s lose money. PirtekUSA lost money in 2009 and is scheduled to lose more in 2010. The PirtekUSA Master Franchise Agreement is up in about 8 years. PirtekUSA has not sold a new franchise in years, there are numerous reasons why this is the way it is. The major reason Pirtek is Poortek is because of poor management. The record speaks for itself. Poortek has been franchising in this country since 1996. They have ~ 30 open locations~, that equates to adding roughly TWO franchisees  per year. Yet they have closed, Terminated or taken back as many as ~33 locations~. If you want a copy of the consolidated financial statements(audited) or copies of the Bankruptcy reports for various locations just contact me at 813-318-1258. The various personal attacks are all the defence Pirtek can muster.  No matter what remember that the truth never gets in Pirtek’s way. The numbers do not lie but people do. If you want the real numbers let me know.
       Business is about the numbers, so no matter what get the facts and figures and verify them. Don’t get Poortek’d. Thanks, and have a nice day. Kiwi ,are we having fun yet?
  12. Guest6406
    Pirtek is a very poor business choice.
    Pirtek had a good run in the late 1990's but the business model has proven faulty and many experts agree that staying away from this franchise is now prudent.
    Pirtek Franchisees continue to lose money and squander precious resources. From a historical view it is without question that Pirtek has reached its apex, and is now on the decline. Nothing illustrates this more than the incredible failure rate experienced in the United States. Recent declines in the credit markets as well as major declines in most areas of the economy all contribute to the lack of profits at Pirtek. Pirtek products are negatively effected by the devalued dollar, pirtek product is produced overseas: Logistics hurt the already thin margin on this commodity.
    Historically, Pirtek saw only slight growth during an unprecedented economic boom in the USA. The poor management team at Pirtek, as well as recent trends to reduce emergency repair costs amongst it's customers (emergency repair of hydraulic hoses is the primary plus Pirtek relies on) result in little or no margin. Cash flows in the major markets that Pirtek serves are notoriously slow. Training cost, employee turn over and market penetration are all negatively impacted by Pirtek's pricing policies that rise at four times inflation and start high to begin with.
    Franchise Contracts: there is much agreement that one-sided, take-it-or-leave it, franchise contracts, like pirtek utilizes, have become so fine tuned that any dispute resolution is unlikely to result in a positive outcome for any Pirtek franchisee. In fact, Pirtek essentially boasts that once the franchise agreement is signed the franchisee is left to fend for itself.
    The nebulous world of franchising is difficult enough. Now, add to it the false promises of large profits
    , a workable business model and a strong management team and one soon realizes that purchasing a Pirtek franchise is indeed, not prudent.
  13. Guest6739
    Good for you, Scott Layer! I think you do a public service in providing a warning that is certainly not given by the regulators of the franchise industry.

    Yes! All of the franchisors use the Internet and Press Releases and the Media to advertise their so-called successful product to the public. But, of course, under current regulation, they are not held to any standard of truth as long as they get a signature on the binding, unilateral, unbargained contract that, together with the mandated disclosure document, protects them from fraud in arbitration and the courts.

    You are a good man, Scott. Keep up the good work!
  14. Guest424
    From case number 6:06-cv-00566-GAP-KRS, Judge Gregory A. Presnell said. Pirtek’s system is not “unique” and is not entitled to protection; the operations and technology used in the Pirtek system are not complex; the hose and fittings used in the Pirtek system are akin to a “fungible commodity”; there is nothing special about a Pirtek hose that sets it apart from other comparable hoses available in the marketplace; and customers belong to the franchisees, and not Pirtek itself; instead, Pirtek’s only customers are the franchisees themselves. Call Scott if you want the facts.
  15. Guest6315
    More Information on Pirtek. These centers have closed, they are no longer in business or are have been abandoned or taken back or Terminated for lack of funds. Allentown, PA. Mobile, Al. New Orleans, LA.
    Tampa, Fl. Miami, Fl. Tucson, AZ. Santa Ana, CA. Ontario, CA. Portland OR. (twice Bankrupt in Portland)
    Nashville, Tn. (Twice Bankrupt in Nashville) Anahiem, CA. Houston, TX, Indianapolis, IN. Irving TX, Plano, TX. Clearwater, Fl. (twice bankrupt in Clearwater) Fairfield, CT. Stratton, CT. Boston, MA. Charlotte, NC. Cincinnati, OH. Commerce, CA. There are more locations that have been "transfered" and there are still more locations that are about to close. Oakland, CA is struggling. Sacramento CA is looking to sell or get a partner. Jacksonville, Fl. has not made a profit since it opened 3 years ago. Now ask how many locations are there total in the USA? Answer about 32!!!! So including the locations that failed twice there are 24 documented failed attempts. That is 75% failure rate. Not counting the struggling locations. Being in business does not mean the business is making money. So it easy to conclude that the failure rate is high and the ROI is low as a Pirtek Franchisee. Any questions? email:  Pirtekpunisher@gmail.com  This is not vengeance. Revenge is not a valid motive, it's an emotional response. No, not vengeance. Punishment
  16. Guest351
    Pirtek Clearwater is closed. The "National Training Manager" for PirtekUSA Paul Bowes failed! Paul Bowes purchased a franchise after working at the franchise headquarters for 4 years! He supposedly knew how to do it all, yet he failed. Sales never averaged over 30K per month. Paul Bowes sued numerous customers in court for failure to pay. He lied more than once about other franchisees and poached territory from the Tampa location. Paul Bowes and people like him think they know how to run a business but they do not understand the sales process or how to evaluate a business by the numbers. Paul Bowes was not duped, he was just stupid.   Paul Bowes and Bob Ruhl put thier homes on the line in order to qualify for the SBA Loan. Now they have all the debt and nothing to show for it. Many Pirtek franchisees have been duped because information was withheld from them, but Paul Bowes is as crooked as the management at PirtekUSA. If you want more information email me at HeatherPirtek@gmail.com The following is the press release Pirtek wrote. Poor Paul, Poor Bob..Poortek!!

    New Ownership in Place at
    PIRTEK Clearwater
    PIRTEK USA is proud to announce that
    PIRTEK Clearwater is now under the
    ownership of Bob Ruhl and Paul
    Bowes. Paul and Bob are well known
    throughout the PIRTEK system, as they
    have seven years of combined PIRTEK
    experience. Bob joined PIRTEK shortly
    after moving to Florida, and right
    from the start found that PIRTEK was
    a great fit for himself. "I knew after
    becoming an MSST, and later
    Operations Manager, that the PIRTEK
    system was special and that it represented
    a unique service and a unique
    opportunity for me personally."
    Paul Bowes joined PIRTEK in 2002
    after moving to the U.S. from Europe,
    and in 2003 became the National
    Training Manager for PIRTEK USA.
    According to Paul, "It was clear to me
    from the very start that PIRTEK
    would be successful, and that if I
    applied myself I could also be successful."
    The combination of PIRTEK's 24/7
    on-site service and superior products,
    along with the experience of Paul and
    Bob, should prove to be a successful
    merger. The new owners have high
    expectations for their center, and will
    look to make PIRTEK Clearwater a
    flagship center as they continue to
    develop the Clearwater market.
    PIRTEK Clearwater operates with
    four Mobile Service Units, and is
    located at 10780 47th Street North in
    Clearwater, Florida. Contact them at
    727-573-8522.
  17. Guest8321
    Less than 25% of franchisors publish any form of earnings claims in their disclosure documents which of course, leaves better than three-quarters of franchisors unwilling or unable to tell you anything about performance within thier own system. And that to my opinion is an outrage. But even when a franchisor does publish an earnings claim, it’s still not an indication of how any particular franchisee or new franchise location is going to perform. At best, an earnings claim is a general statement about the franchise network. It must be viewed with caution. Good network numbers from franchisees and good spreadsheet analysis are one’s best bet. Always look at the numbers. The numbers do not lie. If you need Pirtek numbers let me know.  HeatherPirtek@gmail.com
  18. Guest8941
    Is it fraud to sell a franchise when over 10%, 20%, or 40% of the first owners of the franchise fail to thrive within the first year or two? At what point is it not successful for the franchisor?– who doesn’t share the failure with the failed franchisees but does share in the success of those who survive, and who even gets the benefit of the assets of those who fail when these assets are sold-transferred in a fire sale to a second-generation franchisee who may make it to break-even because of reduced overhead and debt, and who will continue to pay royalties to the franchisor on the gross sales of the business.

    Is franchise fraud committed when the franchisor sells new franchises and indicates in the hard sell that there will be profits in the investment (outside of the actual contract) knowing that a high percentage of the startup franchisees won’t succeed based on historical performance statistics in their possession?

    Unfortunately, as a franchisee, you are not a partner, you are not an employee, you are merely a contracted resource for the franchisor who by way of the adhesory contract really owns you and your gross sales both in success and in failure. Franchisors NEVER promise success or profits within the standard and boilerplare contracts that are signed by the new buyers and are protected by the contract terms in the courts from failed first-owner franchisees who finance and build the physical units that wear the brand name when these first-owners fail to thrive.

    It is impossible to track the actual failure rate of first owners of franchises because many first -owner failures don’t show up on public records because when they give their businesses away to get out from under the debt of the long-term lease that is personally guaranteed, they continue to pay on their start-up debt that is personally guaranteed to avoid default and bankruptcy and to avoid surrender of the collateral posted for the loan. They don’t show up on default lists that the banks and lenders use.

    Yes! the law should be changed to mandate that the franchisors themselves, and not past and present franchisee references, disclose or make available the UNIT financial performance statistics in their possession to new buyers of their franchises. Franchisors should be required under law to give some PROOF of the success of their franchise UNITS to new buyers. But such disclosure would reveal churning and pumping and dumping of units as well as low unit profitability or no unit profitability in systems.

    Yes, the law should be changed to make franchisors share some of the risk with the franchisees and to provide a fair exit strategy for those franchisees who do not thrive when they have exhausted the estimated start-up costs of the franchisor.

    The franchisors and the other special interests, the lenders and the banks, the developers and the landlords and the elected government officials would fight such laws because this could inhibit the sale of franchises somewhat and could adversely affect the economy. Governments depend on franchising to bring economies out of recession. When jobs are in short supply, the franchise opportunity appears to be a good solution to both a job and profits, as well, and those with the resources to buy a franchise are willing to invest in themselves. The trouble is that they are not informed of the actual risk involved in any real sense and the SELLER of the franchise takes unfair advantage of the need of the buyer for a job and income.

    Remember that the concept of “franchising” wherein the franchisor is able to avoid the expense and risk of building and operating the physical business units that produce and grow SYSTEM gross sales upon which he profits is also a means of the franchisor beating the brutal statistics of failure of ALL “start-up” small businesses, independent or franchised, in all world economies. ( Do a Google Search of Start-up Failure Rates -The Real Numbers, written by Scott Shane, Western Reserve University, Cleveland, Ohio)

    The capture of the cheap labor and the cheap “venture” capital of prospective franchisees has no doubt increased franchising activity in all world economies and this capture to this extent would not be possible if the true “failure rate” of first owners of franchises were disclosed to new buyers of franchises. It is not surprising, therefore, that the failure rate of franchise investments for first owners has not been a matter for research and that this risk factor is not disclosed to new buyers of franchises.

    Would or could franchising survive if the unit performance statistics of systems were mandated to be disclosed to new buyers under the law?

    I find that franchising is conducted pretty much the same way all over the world.

    From my point of view, once you sign a franchise contract, you probably have no recourse for any of the misrepresentations made outside of the contract. Franchise law tends to protect franchisors under the sanctity of “contract law” —-that is, if it isn’t in the contract and you acknowledged that you were not expecting anything that wasn’t promised in the contract, this is the end of things.

    Franchises are marketed, with the approval of governments and the special interests who gain from franchising, as having very little actual risk and this is where so many franchisees find out the hard way that franchising is very risky —-especially when they have signed personal guarantees that can destroy them in failure.

    Remember that you are not alone. This is going on all over the world.
    Disadvantages of buying a franchise

    The biggest disadvantage of buying a franchise is that the franchisor is excused under ineffective government regulation from disclosing the material risk factors of the investment as known to the franchisor before the franchise is sold to the public. (Read: Franchising Fraud: the continuing need for reform —published by the American Business Law Journal in 2003 for a review of the Inducement Problem.)

    There are lots of “pig” and “dog” franchises listed on the SBA Franchise Registry that are eligible for 90% guaranteed government loans and the guaranteed portion of these loans become “product” for the banks and lenders to sell to investors in the secondary market.

    Unfortunately, prospective startup franchisees are merely resources for the franchisors and the other special interests who can benefit from franchising, even as start-up franchisees fail out at a known rate of 50% in the first five years. (Read Small Business Trends Startup Failure Rates in a Google Search)

    Better to buy a “used” franchise where you can see the books and the business tax return to determine if there are any actual profits if you MUST buy a franchise.

    Better to be an “independent” and negotiate a “good guy lease” where there is some recourse if your business doesn’t thrive within the first years.

    Terrible to be tricked and to put so much at risk in a franchise when the risk is being hidden from you because of ineffective regulation to encourage the franchisors to stimulate local economies.
  19. Guest6771
    The following article was written by Pirtek, Summer 2007. Notice how they point out that Ken searched for months to find the right franchise. They also comment on how 25 years in manufacturing might give Ken some special insight. Well, sadly like so many other Pirtek Franchisees, Ken shut the doors on his Pirtek Franchise in less than 3 years. More Pirtek locations have closed, gone bankrupt or been Terminated than have ever been successful. They should change the name to Poortek.


    Ken Inscho spent several months evaluating
    possible franchise opportunities that
    focused on providing unparalleled customer
    service. Inscho,the current owner
    of an automotive supply assembly business,
    was looking for a growing business
    where he could utilize his automotive and
    manufacturing background. Additionally,
    he had a desire for networking and developing
    business partnerships.
    Inchco found his answer with PIRTEK,
    the only "on-site" high pressure hose
    replacement service franchise in the U.S.
    "Our team approach to on-site hose
    replacement and preventative maintenance
    should benefit local companies by
    saving them downtime, stress and more
    importantly, money." "I've been involved
    in manufacturing for 25 years, I know
    how important it is to get equipment back
    up and running as soon as possible. Time
    is money to our customers, and our goal
    is to provide the highest quality hoses and
    fitting in conjunction with excellent customer
    service around the clock," Incho
    said.
    PIRTEK Beech Grove is located at 6011
    E. Hanna Ave., Indianapolis, IN 46203.
    Contact them at (317) 781-4581.
  20. Guest4210
    Overall Store Profitability is a Major Concern.
    The majority of pirtek Stores do not start breaking even for 48 months with many requiring 72 months or more. That does not mean that the owner(s) have made their money back in 48 months, it means it takes the average store 4 years before the owners stop putting more money into the store. Unfortunately neither Pirtek nor the Area Franchisee tells this to the prospective buyer. Generally, this means that opening a new store is a bad financial decision. The average store is resold when the original owner runs out of the cash needed to continue operations, then the second or third owner has a chance to start making an income. It is almost always better to buy an existing store!! Some stores start to produce a $35,000/yr income for the owner at about $800,000 in annual gross sales, but the medium store gross sales at present appears to be about $480,000 (available numbers say about 80% of all US stores do not break even).
    Taking an example from the Pirtek manual, it states that a store that does $1,100,000 STR with a 60% margin should gross about $110,000 in profit. To simplify the math, they take two times $550,000 and multiply by a 60% margin. Fixed and Variable expenses are estimated to be $660,000. However, if you multiply by 52.5% (the average gross margin according to Financial Planner), gross profit is reduced by $41,500 (to $68,500). This is a ridiculously small return on investment for a store that is in the top 2 to 4 percent of the network. There you have it. Poortek
  21. Guest5459

    Recently PirtekUSA posted 2007 thru 2009 consolidated financial statements. These financial statements were evaluated and the bottom line is that Pirtek USA is in trouble. Pirtek USA showed a profit of 1.4 million in 2007, but that profit declined to a loss over the next three years. 2010 financials are forecast to show even greater losses. All Company owned stores lost money. With cherry picked locations and more resources than any franchisee could bring to the table, all company owned stores lost money. This proves that Pirtek USA is a franchise selling business and not a business that is good for the franchisee. The average sales per Franchise location is far below what is required to pay the bills. The only way Pirtek USA can survive much longer is to close down all the stores that lose money and continue to rape the franchisees. PirtekUSA’s inventory is down, debts are mounting and most franchisees are struggling. This financial storm was preceded by 2006 litigation, involving more than half of the franchisees, claiming prices for product were excessive. Remember, the numbers do not lie, people do. Sadly, for most franchisees it is called Poortek for a reason.

  22. Guest1663

    Overall Store Profitability is a Major Concern. The majority of pirtek Stores do not start breaking even for 48 months with many requiring 72 months or more. That does not mean that the owner(s) have made their money back in 48 months, it means it takes the average store 4 years before the owners stop putting more money into the store. Unfortunately neither Pirtek nor the Area Franchisee tells this to the prospective buyer. Generally, this means that opening a new store is a bad financial decision. The average store is resold when the original owner runs out of the cash needed to continue operations, then the second or third owner has a chance to start making an income. It is almost always better to buy an existing store!! Some stores start to produce a $35,000/yr income for the owner at about $800,000 in annual gross sales, but the medium store gross sales at present appears to be about $480,000 (available numbers say about 80% of all US stores do not break even). Taking an example from the Pirtek manual, it states that a store that does $1,100,000 STR with a 60% margin should gross about $110,000 in profit. To simplify the math, they take two times $550,000 and multiply by a 60% margin. Fixed and Variable expenses are estimated to be $660,000. However, if you multiply by 52.5% (the average gross margin according to Financial Planner), gross profit is reduced by $41,500 (to $68,500). This is a ridiculously small return on investment for a store that is in the top 2 to 4 percent of the network. There you have it. Poortek

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  24. Guest9401

    Pirtek is a sham no matter how you look at it. Only a few franchisees make any money and that is because those franchisees were good friends of the owner of Pirtek, therefore the contracts are more favorable, and these "cronies" dont have to over pay for product. All this happens via kick backs and credits that only a very select few franchisees are allowed to participate in. In exchange for all this, the franchisees that are on the arbitrary good guy list, promise to help Pirtek Sell Franchises. Its simple, if the business had legs they would have far more franchisees than they do. If the Pirtek busienss model worked in the USA then you would see experienced Hydraulic professionals get involved with Pirtek. It is truely a sham and is nothing unique, Parker has Mobile Hose work shops as does Eaton and Caterpillar. 


       The owner, Morgan Arundel, is a Grain Broker, he paid $350,000 for the master franchise, he never visits the franchisees, he knows nothing about hoses, nothing about Hydraulics and has just managed to dupe people out of their $500,000 for a single franchise. Also, do not confuse Pirtek USA with  Pirtek Australia. They are not at all the same. Pirtek Australia uses a diffenent hose and fittings manufacturer which is considered to be a superior product to the USA version. Pirtek Australia has a better and larger product line, including hydraulic oil and industrial products. Pirtek USA has an extemely limited inventory, all designed to dupe the prospective franchisee.  The prices are lower in Australia too. That is why 15 of 30 franchisees went to arbitration with Pirtek USA back in 2006. Pirtek USA admitted that they mark product prices up by as much as six times!


      Customers get a better product and a better price in Australia, so if you want to buy a Pirtek franchise you would be better off moving down under!  Consider the facts. Pirtek USA has a negative growth rate, while  Pirtek AU has had growth. Consider that more USA locations have closed down or gone bankrupt or been Terminated in the last 15 years than have EVER failed in Australia!  In fact, some people suggest that more Pirtek USA centers have Closed than have ever been opened in Australia. Right now there are about 90 Australian locations. Pirtek USA tries to sell franchises, but can only manage an opening average of two or three per year,  while one and a half or two close per year on avarage.  Getting in touch with past franchisees is a joke. First, some past franchisees have signed non-disclosure agreements, so they can't be trusted. Second, it is almost impossible to get the history and / or reliable phone numbers or addresses of past franchisees. Try and get a hold of Clay Lewis, or Kurt Braaten, or  Gil Boyd or d**k Wilcox or Mike Whitehead. Try and get in touch with Bobby Moore. Contact Paul Bowes who owned Pirtek Clearwater after serving as Pirtek USA Training manager for more than 4 years! Paul Bowes had every opportunity, all the back ground, a larger than normal territory, tons of experience in the so called "Pirtek System" yet he failed. Ask Paul Purcelli or Bill Cherry why they failed. Try and get a hold of d**k Wilcox or Irwin Zeatz.    Or try to get the bankruptcy files for Scott McGee and David Johnson. Ask Pirtek USA for the information and they will laugh at you. I have researched this so called business opportunity as well as others, and Pirtek is as bad as they come. If you are really interested in Pirtek go get a job at one first. Work there for a year, get an idea of what the prices are, what the competition is like. If you like the business after that and you think you can do it then go for it. But one last word of caution, do not leverage your home or house or retirement account. If you do buy a Pirtek only use the business as collateral. Remember, in franchising you sign a non-compete and other provisions that will basically take the business from you if things go wrong. If you leverage your home or retirement they will take that too. Remember, Pirtek is called Poortek for a reason. You have been warned.

  25. Guest8699

    Bob Purvin’s book is a must read. FRANCHISE FRAUD, Like Poortek?


    Before you waste $500,000 on a Poortek franchise READ THIS BOOK!


    In a Blue MauMau posting, Bob tries to explain what he meant by fraud:


    Purvin explained it was a much bigger problem which he addressed in a book he wrote, The Franchise Fraud, which was republished recently. He told them that it wasn’t so much about the people that were out selling fraudulent deals, but that the franchising industry had painted a rosy picture about franchising. He said they tell you that when you buy a franchise you are reducing your odds for failure and dramatically increasing your odds of success, because everybody knows when you buy a franchise you buy a proven commodity. He said, “That’s false. Most franchises are much weaker than they appear to be. The blue chip list of franchise opportunities is a very short list.“


    He goes on to state that any legal protection is an illusion:( Check out all the Pirtek litigation and Bankruptcies!)


    He also said that people believe that they are protected by a fabric of laws that would prevent them from being defrauded. “That also is false.” The point of his book was to wake up the buying masses that when they buy a franchise they have to be very careful and treat that purchase every bit as cautiously as the guy in the corner who says, do you want to buy my Rolex watch. Unfortunately, hundreds of thousands have been bitten by the franchise bug and can’t believe that they weren’t buying into a sure thing, Purvin said.


    Sound advice from a real pro.


    1. Most franchise systems are unproven. ( Poortek does not work in the USA)

    2. The blue chip franchises are very few.

    3. There is no legal protection.

    4. Treat buying a franchise like you would buying a “genuine” Rolex on the street.

    5. Hundreds of thousands have been burned. ( Just like 40 or so Poortek franchisees)


    Read the book. Read the Book! Read the Book!

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