In 2002, Gary Greenlee and his wife, Rosemary, pulled $150,000 from retirement savings, took out a $1.3 million loan and bought an existing Kwik Kar Lube shop in Waxahachie.
Six years later, the former Texas Instruments engineer and his wife have had to sell their home, file for bankruptcy and – like 16 others in Texas and Oklahoma – have sued Kwik Industries Inc., accusing the Farmers Branch-based company that sold them the business of fraud.
“All my retirement money is gone – what I had saved I put into the business,” says Mr. Greenlee, 54. The cause, he says, was an investment based on misleading information.
Kwik president Ray Ellis denies defrauding the Greenlees or any of the other Kwik owners. Any trouble they had with their businesses was due to operator error, he said.
“It’s hard work,” Mr. Ellis said. “The ones that really take care of customers do really well.”
One issue in the case is whether Kwik can be considered a franchise, a legal entity that comes with detailed rules defining the relationship between franchisors and franchisees. For example, franchises are expected to provide support for their franchisees.
But Kwik says it’s not. The company simply sold the shops – just as in any other business sale, according to Kwik’s lawyer, James Hilliard
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