In the Kentucky case, what was the specific amount of the credit that the Louisville Byrider franchisee agreed to provide on each customer account?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
alleged violations.
Commonwealth of Kentucky ex rel Gregory D. Stumbo, Attorney General vs. James Maguire, J. Marc Maguire, Auto Acceptance Corporation, CNAC of Kentucky, Inc., J. Maguire Enterprises, Inc., Auto Acceptance, LLC, CNAC of Kentucky, LLC, J. Maguire Enterprises, LLC, and J.D. Byrider Systems, Inc. (Cause No. 04Cl10575) filed on December 16, 2004, in Commonwealth of Kentucky, Jefferson Circuit Court, Division Nine. Complaint against J.D. Byrider Systems, Inc. and the Louisville franchisee alleging violation of Kentucky's Consumer Protection Act by a pattern of unfair and deceptive sales and financing practices engaged in by the Louisville franchisee, aided and abetted by unlawful sales and financing techniques developed by J.D. Byrider Systems, Inc. For purposes of settlement only, an Agreement and Consent Judgment Entry and Order were filed February 2006 in the Commonwealth of Kentucky, Jefferson Circuit Court, Division 7. The court enjoined J.D. Byrider Systems, Inc. and its Kentucky franchisees from violating the Kentucky Consumer Protection Act, the federal Truth in Lending Act, and the federal Magnuson Moss Warranty Act and ordered remedial steps for the alleged violations; J.D. Byrider Systems, Inc. paid $300,000.00 to the Attorney General as reimbursement, attorneys' fees and other costs of the investigation and litigation. The Louisville franchisee paid $2.7 million in customer restitution. In addition, the Louisville franchisee agreed to provide a credit of $500 on each customer account for vehicles purchased during 2000 through 2004. The Louisville franchisee is no
Source: Item 3 — Litigation (FDD pages 15–19)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a lawsuit was filed on December 16, 2004, against Byrider Systems, Inc. and its Louisville franchisee, alleging violations of Kentucky's Consumer Protection Act. As part of a settlement reached in February 2006, the Louisville Byrider franchisee agreed to provide a credit of $500 on each customer account for vehicles purchased between 2000 and 2004. The Louisville franchisee is no longer a franchisee.
This settlement indicates potential risks associated with Byrider's sales and financing practices, as the franchisee was found to have engaged in unfair and deceptive practices. The fact that the franchisee had to pay $2.7 million in customer restitution and provide $500 credits per account suggests significant financial implications for franchisees who do not adhere to consumer protection laws.
Prospective franchisees should carefully review Byrider's training and compliance programs to ensure they fully understand and can implement fair and transparent sales and financing practices. It would be prudent to inquire about the specific measures Byrider has in place to prevent similar issues from arising in the future and to protect franchisees from potential litigation and financial losses related to consumer protection violations.