Metal Supermarkets Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$350,500 - $612,500
Franchise Fee
$39,500
Total US Locations
93
Business Summary
Metal Supermarkets offers franchises for metal warehouse and distribution centers. These stores sell a wide variety of metals and related materials, and provide specialized metal services like metal processing and 'cut to size' pieces. The business primarily serves the maintenance and engineering departments of manufacturing facilities, as well as various other businesses such as machine shops, contractors, welders, fabricators, and institutions like hospitals and schools. Metal Supermarkets aims to provide fast delivery, computerized ordering, and sourcing for hard-to-find items with no minimum order limits.
Corporate History
The Metal Supermarkets brand and its system for developing and operating stores have a history spanning almost 40 years, with initial operations dating back to 1985 through Metal Supermarkets Corporation (Canada), which also began offering franchises in 1987. The franchise system and trademarks were acquired by MSKS IP, Inc. in 2010. The current entity, Metal Supermarkets Franchising America Inc. (MSFA), was formed on October 1, 2023, through an amalgamation of several predecessor companies that had been offering franchises in the U.S. and Canada since 2010. In June 2024, the Metal Supermarkets trademarks and franchise system were transferred to an affiliate, MSKS IP (2024) Inc., which then granted MSFA an exclusive license to operate in the U.S., Mexico, and Canada. As of December 2024, MSKS, the parent company, came under the indirect control of investment funds affiliated with Riverarch Equity Partners.
Financial Overview
Investment Range
$350,500 - $612,500
Franchise Fee (Low)
$39,500
Franchise Fee (High)
$44,500
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$140,000
Equipment Costs (High)
$190,000
Working Capital
$80,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Metal Supermarkets Franchising America Inc.'s financial statements for the year ended September 30, 2024, were audited and received an unqualified opinion from its independent auditor. The auditor's report did not identify any substantial doubt about the company's ability to continue as a going concern, indicating a generally healthy financial position. Management's evaluation of goodwill also confirmed no impairment loss was recorded.
Financing Details
Metal Supermarkets Franchising America Inc. does not offer any direct or indirect financing to franchisees, nor does it guarantee any notes, leases, or other obligations. However, the Metal Supermarkets brand is approved for eligibility for Small Business Administration (SBA) loans, which franchisees may pursue through third-party lenders. Approval for SBA loans does not guarantee that a franchisee will obtain financing or that the terms will be favorable.
Performance Metrics
Total US Locations
93
Franchised Units
92
Corporate Units
1
Avg Square Footage
5,000
Franchising Since
1987
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
Metal Supermarkets Franchising America Inc. is involved in one pending lawsuit, Minnebo et al. v. Prior MSFA et al., which was filed on August 4, 2022. The plaintiffs, a former Metal Supermarkets franchisee and its owner, allege fraud, negligent misrepresentation, and breach of contract, claiming that the franchisor failed to disclose that a supplier in their market was also a retail competitor, making it impossible for the franchisee to compete effectively. The lawsuit seeks damages exceeding $1,000,000. The case was initially filed in New Jersey, but was later transferred to the United States District Court for The Western District Of New York on April 30, 2024. Mediation was conducted on November 13, 2024, but no settlement was reached, and the case remains ongoing.
Bankruptcy History
Metal Supermarkets Franchising America Inc. has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Metal Supermarkets franchise, franchisees must first provide 180-day prior notice before their agreement expires. They must be in substantial compliance with all terms of their franchise agreement and any other agreements with Metal Supermarkets Franchising America Inc. or its affiliates throughout the initial term. Franchisees are required to pay a successor franchise fee of $10,000, maintain the right to possession of their premises for the new term, and attend any requested refresher training. Additionally, they must agree to remodel their store to meet the then-current specifications and standards for new Metal Supermarkets locations and sign a new franchise agreement with potentially different terms, including new fee requirements, Protected Area, and other rights and obligations, as well as a general release of claims.
Training & Support Program
Franchisor Assistance
Metal Supermarkets Franchising America Inc. provides comprehensive assistance to its franchisees. Before opening, the franchise helps with site approval, provides prototype plans, offers pre-opening assistance, furnishes a database of potential customers, and conducts initial training. Franchisees also receive access to the Store Opening Manual and Operations Manual, and may receive sales and marketing support and initial brochures. Ongoing support includes regular store visits to evaluate operations and provide advice, periodic guidance on the System, and additional training programs as needed. Franchisees also receive updates to the Operations Manual, may get sales and marketing assistance, and have access to hosting services for the Information System, email, and the online 'Metal Supermarkets University' for training.
Initial Training Hours
229
Training Location
Head office in Toronto, Ontario, Canada, US Metal Supermarkets store, and franchisee's store
Ongoing Support
After opening, Metal Supermarkets Franchising America Inc. provides ongoing support through periodic visits to the franchisee's store to evaluate operations and offer advice. Franchisees receive continuous guidance regarding the System, including improvements and changes, which is provided through the Operations Manual, bulletins, webinars, and consultations. The franchisor may also conduct periodic or additional training programs and offers access to an online university for franchisees and their employees. General sales and marketing assistance may be provided at the franchisor's discretion. Additionally, franchisees utilize hosting services for their Information System and email, and are required to pay a monthly fee for computer support if needed due to non-compliance.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Full-Time
Territory Type
Protected
Staff Count
3
Territory Size Requirements
Metal Supermarkets franchisees receive a Protected Area, which is a geographical area estimated to contain at least 750 manufacturing facilities, tool and die shops, and other potential customers.
Staffing Notes
Metal Supermarkets stores are required to be staffed at all times by an Operating Principal (who may also be the franchisee) and a minimum of two qualified employees. The Operating Principal must dedicate full-time effort to the store's operations and cannot engage in other businesses requiring substantial management. Employees typically earn between $14 and $28 per hour, though this can vary by market. All employees providing services to customers must wear approved uniforms and apparel, and clearly identify with the Metal Supermarkets brand as specified by the franchisor. Store management must always be handled by the Operating Principal or an approved manager who has completed initial training.