Midas Buys Troubled NoCal Franchisee’s Stores

Midas Inc. has acquired the 22 Midas automotive service shops in Northern California owned by franchisee Maurice Glad, who had just reached a $1.8 million fraud settlement with the state of California, reports Tire Review. Two of those locations were then re-franchised to another Midas franchishee.

The $5.8 million sale was completed this weekend, and the shops are now under Midas’ management. Midas acquired these shops in connection with a settlement between Glad and the California attorney general and Bureau of Automotive Repair. Glad had been charged with violating state business and professional codes in a suit seeking $222 million in civil penalties and costs.

Midas was not named in the suit and worked closely with the California attorney general’s office on acquiring these shops. The state accused the 22 Midas stores owned by Glad with pushing customers into unnecessary repairs, and filed suit against the owner last year. Glad operated Midas stores in Walnut Creek, San Leandro, Concord, Hayward, Campbell, Dublin, Fremont, San Jose and in several other towns.

In addition to the cash settlement, Glad had to give up his stores and can never own or operate any type of auto repair shop in the state again. The stores were targeted with sting operations over a three-year period after dozens of consumer complaints were received by the state. In one sting operations, in May 2007 at Glad’s Dublin location, undercover agent was told that the car needed thicker, more expensive brake pads than the ones the store advertised, even though the OEM advised using the thinner pads as replacements.