RED BULL: Gored by Vending Scam

Jan warns about the all-too-familiar fate of those who fell for the alleged Red Bull vending scam. Before you invest in a vending business opportunity believing that a big name company must be legit, read Jan’s story:

I, too, was misled by this “Business opportunity” offered by Creative Concepts and Red Bull.

In October of 2005 I ran across a web site describing various business opportunities. One that caught my eye was a RED BULL VENDING PACKAGE. I was familiar with the energy drink and thought that Red Bull was a reputable company as they had been in business several years and were considered to be the #1 selling energy drink on the market. I contacted Creative concepts of North America who was handling these distributorships for Red Bull. After receiving their information package and reviewing it carefully I was contacted by a Creative Concepts Representative. He stated that “business was booming” and over the course of many phone calls I was convinced that it sounded like a good opportunity.

The information package touted, among other things: 1. Complete 3 year warranty for machines against defects, materials, parts, service and labor and a 3 year theft and vandalism policy. 2. Protected distribution rights for my territory. 3. Customer Support Program. It also described the “lucrative world” of energy drink vending, describing it as a high growth proven industry and a recession proof business with very tangible tax benefits. Also, the materials described Red Bull as the “biggest threat to coke and Pepsi in the last 40 years” This statement is absolutely erroneous and I doubt that Pepsi or Coke feels very threatened by Red Bull as about 95% of the places I contacted had contracts with either one or the other of these companies!

According to Creative Concepts, machines were selling so fast that that most “distributorships were taken up.” My area was still available but probably “wouldn’t be for long.” Much of the projected earnings that they bragged of sounded a little outrageous to me but I was looking to make a little extra money and did not intend for this to be my sole means of income. I asked them why Red Bull did not place the machines themselves and they said that Red Bull did not want to hire extra people to place machines and service them. That sounded sensible and reasonable to me.

In January of 2006, I used what savings I had in addition to some credit cards to transfer funds in the amount of $12,570.00 to Creative Concepts. After I received the machines, I spent days leading to weeks, then months trying to place the machines…all to no avail. I was dumfounded to learn that just about every location I visited had contracts with either Pepsi or Coke. I went to hotels, motels, colleges, malls, factories, gyms, office buildings, rental centers, car dealers, bowling alleys, roller skating rinks and just about every kind of business you can imagine. Curiously, many of them told me that they had already been contacted by Red Bull in the past about placing a machine and had turned them down.

I finally found one apartment complex willing to let me put a machine out by their picnic area. Exasperated, I finally contacted a Red Bull representative to hear of any ideas he would have in helping to locate my machines. I was quite taken when he jokingly said to me: “Yeah, they (meaning Creative Concepts) sell you the machines but they don’t tell you that you won’t find anywhere to put them.” At that time I was very confused as to why Red Bull would allow a company to sell their machines when they KNEW that people had very little, if any, chance of securing locations for them! I think I realized at that time that this whole scenario was corrupt and that Red Bull had been involved in some kind of scheme with this Creative Concepts Company. I also found out shortly after I received my machines that the affiliation between Red Bull and Creative Concepts was dissolved.

I was contacted by both for buy back programs and eventually sold the machines back to Red Bull for $1700.00 for the 2 new machines and $1500.00 for the used machine for a total loss of $7,750.00. It was very unfortunate for me to lose this money but I have been able to maintain and pay off my credit cards by working a few extra hours at the job I was told I may be able to retire from! I know that others have invested much more and that it has affected their lives in profound ways and will continue to do so for many years to come, possibly their whole life.

Red Bull acted in a very fraudulent manner and should be held accountable for involving themselves in business practices that leave so many people bankrupt, destitute and broken hearted. They agreed to be in a partnership with a company that was selling machines (with the Red Bull name emblazoned all over it) full well knowing that you CANNOT FIND PROFITABLE LOCATIONS FOR THESE MACHINES!!!!!!! Red Bull is a multimillion dollar company and should make restitution.

WHAT DO YOU THINK? HAVE YOU HAD EXPERIENCE WITH RED BULL OR OTHER VENDING COMPANIES? SHARE A COMMENT.

RED BULL VENDING: Another Alleges Red Bull-oney

Unhappy Franchisee reader Lederhos left this comment recounting an all-too-familiar story regarding the CCA / Red Bull Vending business opportunity:

“My husband and I wanted to find a way to bring in a little more money each month and a way for me to quit my job that stressed me out to no end. We looked at Franchises and thought we found the perfect one…Red Bull vending machines. Red Bull had started becoming really popular and we thought they were a reputable company so we pursued our investigation into a Red Bull Vending Franchise.

“Creative Concepts of America (CCA) along with Red Bull North America (RBNA) provided false and ambiguous information that lured us into buying their vending business franchise opportunity with protected territories. We purchased 10 Red Bull branded machines for $42085.00 from (CCA) using our savings and were told we would own a franchise and have protected territories. The only reason we entered into this agreement was because Red Bull North America (RBNA) assured us when we called their consumer affairs department in March of 2006 at 310.393.4647 (to verify the agreement between Creative Concepts and RBNA), that everything was legit and CCA was the “only Red Bull Machine Representative” and they had an “exclusive agreement”. If we wanted to buy Red Bull machines, we had to do so through CCA. They not only confirmed everything but also encouraged us to buy the franchise because Red Bull was the most popular energy drink and we would definitely make money. There is also a letter from RBNA to Andrew Kennedy of CCA, dated 1/1/06 (cc Gary Smith and Robert Sorensen) and it stated, “You can inform your potential distributors that we have entered into a formal “buy/sell” agreement with your company.” It also stated, “Allow this letter to serve as confirmation of the relationship between Red Bull North America, Inc, and Creative Concepts of America, Inc.” Had RBNA, not told us what they did and also provided it in writing, we would’ve never done business with CCA. We were ripped off by RBNA and CCA!! Not only did we believe Red Bull North America, we were also given references to call. These people all were making crazy money and were going to buy more machines! LIES.

“Apparently on April 24, 2006, CCA would no longer be distributing Red Bull vending machines….we received our machines in mid May of 2006…..after ties were supposedly severed between RBNA and CCA.

“We received a letter from Red Bull North America and in the letter here is what it states about placement:
“Placement – Red Bull distributors understand the local market and can help direct you to key locations, in some cases using their relationships to help you place your equipment.”
We also received information from Mr. Jim Murphy, Director, Non-traditional On-Premise, Red Bull North America, Inc; and he is aware of all the details regarding Creative Concepts (and the Red Bull vendors that were dealing with CC) and advised us to reach out to our distributor. We never received ANY help from our distributor…just more stress and heartache from dealing with a bunch of liars.
We were promised locations at colleges, airports, convention centers, etc.

“CCA made empty promises and this Red Bull was aware of all of this information. Now CCA is no longer here to adhere to their part of the deal so Red Bull should do something about it but they have done nothing to right this wrong.

“Red Bull North America mentioned a buy-back program to most of the other vendors but this was never officially offered to us. I still have the saved website pages CCA and Red Bull advertised this “Franchise Opportunity”. Hopefully one day we will get some restitution from Red Bull.
We were able to place a few machines at locations but none profitable. One machine was smashed and another machine has been broken into several times but there was no one to help replace the parts (for our one year warranty). The other half of the machines are sitting in our garage taking up space.

“How can Red Bull being the billion dollar company they are just ignore all of us American people that were robbed and lied to? Having such a huge name, you would think more research would have been conducted by RBNA before going into business with CCA. However, I guess they are equally as deceptive.”

WHAT DO YOU THINK? HAVE YOU BEEN A VICTIM OF A VENDING SCAM? SHARE A COMMENT BELOW.

RED BULL: More Alleged Victims Seeing Red

Chris writes:

Well, Add me to the list of hard working folks that were scammed by Red Bull North America and CCA.

We called RBNA before we ever called CCA to make sure this was a legit offer. RBNA told us that this was the only way to purchase the Red Bull vending machines and that they would offer full support. RBNA gave us the name of the salemen at CCA, ED. Ed gave us the all the info that has been posted, references to call and the promise of secure territories.

Well, Like everyone else, this has turned into a scam not only by CCA but RBNA as well. The letter RBNA sent out, clearly stated they would offer support, product price and have the local distributors help with locations. As you know, the local distributors balked at this and won. The machines RBNA purchased back from you, went to the distributors and placed right away in good locations. Locations that we were promissed. For those that sold the machines back, funded RBNA’s vending program. Machines that cost us $3K-$4K each cost RBNA $1k to $1.5K. We lost and RBNA is walking away clean free.

We need to call 60minutes, Anderson Cooper 360 or something to get this into the publics eye.

The squeaky wheel gets the grease….

Keep this blog going.

RED BULL VENDING: College Student Scammed?

College student Nic Bernhard thought he was making a solid investment in his future; however, his future allegedly involved digging out from under a vending scam from a trusted company:

I am one of the many that was scammed by Red Bull and CCA and can confirm that these reports are totally on the mark. I was a young college student at the time and was looking for vending opportunities with a reputable company.

I would not have felt so confident, but I knew Red Bull was a huge world wide corporation and a very popular drink. Of course, we all confirmed with Red Bull that Creative Concepts of America was their representative for vending machines. Red Bull sang their praises and the person I spoke with before finalizing my purchase of 10 machines, assured me that Red Bull Vending would prove to be a lucrative investment.

Like others, this turned into the biggest nightmare of my life and and I will continue to pay off a debt for many years to come due to the lies and misrepresentation of this multi-billion dollar corporation.

I’m amazed that people like this can continue to live and function knowing how many people’s lives have been destroyed due to their actions. Some day, hopefully soon, justice will be served.

WHAT DO YOU THINK? SHARE A COMMENT?

RED BULL VENDING: Jennifer’s Story

Unhappy Franchisee Jennifer related her experience in a recent comment:

I fell for the Red Bull Scam too. We purchased the so-called “Red Bull Franchise” from Creative Concepts of America. There was a letter given to us from Red Bull North America to CCA confirming their relationship. We called RBNA and was told this was a good company and if we wanted machines to get them through CCA. This cemented the deal. Big name how could we go wrong.

With our purchase we were given protected territories, warranties, a theft and vandalism policy, and placement of our Red Bull vending machines in high traffic areas. Oh and lets not forget the money. Oh the money we were told we would make in this venture. My thoughts were this would be a great way to pay for the rest of my college expenses.

This whole business venture has been a joke. Who would ever think such a well-known company would ever allow this to happen.

The owner of Red Bull worth 4 billion dollars. Us Americans are out about 25 million. Red Bull needs to take responsibility for what has happened.

Jennifer

WHAT DO YOU THINK? LEAVE A COMMENT.

RED BULL VENDING: The Wallace’s Story

Unhappy Franchisees Michele and Vincent Wallace share their story:

Thank you for the story. I know that there are many of us out there. We all have our own story of how we were scammed. My husband and I have two little girls… now ages 4 and 6. When we bought the machines, we were hoping they would help fund their college savings. We used $15,000 of our savings… and lost it all. I know that $15,000 may not seem like much, but it is a huge hit for us. Here is our story:
———————————————————-
In November of 2005, my husband and I made a decision to start up our own business and buy 3 Red Bull Vending Machines through Creative Concepts of America, which was a“Red Bull Vending Machine Franchise Company”.
As we, ourselves, enjoy the Red Bull product, we thought that purchasing 3 Red Bull Vending machines was a very safe and smart decision… especially considering that this was a Red Bull FRANCHISE.

After doing our homework and speaking with a Red Bull / Creative Concepts representative – Jeffrey Youngbauer—we decided to purchase 3 machines at a cost of $4, 210.00 each. On 11/08/2005, a check in the amount of $12,630.00 was cashed. We received a business packet and 3 Red Bull vending machines shortly thereafter. Creative Concepts / Red bull referred us to a locating service whereby they found (very “shady”) locations for our 3 machines for a fee of approximately $1,200.

The machines failed horribly. Red Bull / Creative Concepts estimated selling an average of 27.6 cans a day (Gross profit of $.75 per can. 3 machines = $62.10/day, $434.70/week). It ended up that we were selling approximately 5 cans per week per machine.

In April of 2006, we received a call from Red Bull / Creative Concepts stating that they would like to extend the offer of buying back the machines because they had “upgraded their machines” to offering 3 products instead of 1. Of course, the buy back included a loss, which was expected. However, after much thought, my husband and I determined that the loss we would suffer if we sold our machines back would be much less than if we decided to keep them. So, we went ahead and agreed to sell back all 3 machines. A contract was signed and all seemed legitimate.

We upheld our end of the bargain and had all 3 machines moved to our garage. We contacted Red Bull / Creative Concepts, who had a moving company come and retrieve them from our garage. The agreement stated that Red Bull / Creative Concepts would buy back 3 vending machines at $2,800.00 per machine. A check for $3,000.00 would be issued once they had the machines in their possession and determined there was no damage. The remaining balance of $5,400.00 would be paid in equal payments within 6 months starting June 1, 2006 (to be automatically deposited).

The $3,000 never materialized. Rather, we received an email from Creative Concepts, declaring that they were in the 1st stages of bankruptcy. As Creative Concepts was a “Red Bull” franchise, we contacted Red Bull directly and let them know what happened. Red Bull admitted to having a relationship with Creative Concepts, but indicated that the relationship was severed once bankruptcy was declared. Red Bull disregarded our losses and completely ignored our continuous complaints and inquiries into the entire situation.

Red Bull is an unethical company, with very unethical business practices.

Sincerely,
Michele and Vincent Wallace

RED BULL VENDING: Michael Turko’s Story

Unhappy Franchisee Michael Turko comments:

There comes a time when corporations need to step up and reconcile poor business decisions and poor choices in business partners. Right is right, and Red Bull North America (RBNA) is just plain wrong.

I purchased 10 Red Bull vending Machines via Creative Concepts of America (CCA) for approximately $44,000 dollars. The machines arrived, with the initial stock of Red Bull product shortly thereafter. Along with the purchase of the machines and product, I was also purchasing a protected territory and a relationship with RBNA. This is all clearly stated in the purchase contract that I signed.

Shortly after entering this venture, it was announced via letter from RBNA that they had severed their relationship with CCA, and would no longer be supporting CCA as a business partner. This was shocking and of great concern to me, as my reason for making this investment was Red Bull brand recognition, and RBNA’s own first-hand confirmation to me that they did, in fact, have an ongoing relationship with CCA.

This business opportunity had been marketed as a Red Bull opportunity by CCA, with RBNA’s full blessing and knowledge.

Upon learning of the dissolution of the RBNA/CCA partnership, I attempted to contact RBNA several times to gain some clarity as to the nature of their abrupt suspension of activities with CCA. I never received a call-back from any Red Bull representative once I purchased the machines and product.

I then contacted CCA in hopes that they would address my concerns. After a very long and tedious negotiation, CCA agreed to buy back my machines at $3,000 per machine. A contract was signed to that affect. Payment was to be made by CCA upon receipt of the machines. The machines were removed from their working locations and put into storage with those that were never placed at all.

A moving company, hired by CCA, eventually picked up the machines and shipped them to Florida. I confirmed receipt of the machines at the warehouse that they were shipped to. I received proof of delivery from the carrier as well. This was something I requested…not offered by CCA or the warehouse.

I instructed the warehouse, which was obviously in some sort of arrangement with CCA, to NOT release the machines to CCA without my authorization, as they did not belong to CCA until payment was made to me. The warehouse agreed to follow my instructions.

After not receiving any payment or communication from CCA or the warehouse for two weeks (and several unreturned calls), I again contacted RBNA. They FINALLY agreed that they might be able to offer me some sort of settlement/buy back. The RBNA representative called the warehouse where the machines had been stored, only to discover that the machines were no longer there. They had been RESOLD to another party. So, basically, an agent of RBNA, CCA, stole my property and sold it to some other poor schmuck.

Not only was I now out $44K plus all the other expenses, but the machines were gone as well.

RBNA is responsible for putting their name on this venture, and authorizing such a sleazy, fly-by-night scam artist like CCA to represent them. None of this would have happened to me, or to anyone else, had Red Bull either been more discriminating in its choice of business partner/agent.

Red Bull could have done the right thing when they found out about CCA’s practices. They could have been proactive in giving me and others the opportunity to opt out of this program without severe financial damage. Instead, the battened down the hatched and simply ignored the enormous mess that they created.

Red Bull North America needs to be held accountable for allowing its agents to defraud so many investors who had believed in the Red Bull brand and had been excited and proud to be a part of such a success story as Red Bull. RBNA’s reaction and lack of ownership of this terrible outcome tarnishes a once brilliant name.

WHAT DO YOU THINK? SHARE A COMMENT.

RED BULL VENDING: Mallory’s Story

Unhappy Franchisee Mallory comments:

We did do our “homework” before purchasing our Red Bull vending machine franchise. And yes, we were told it was a franchise. I contacted the BBB, state and local officials in Florida, and could not find anything derogatory about CCA. I phoned Red Bull North America and was told they had an exclusive agreement with CCA to sell these vending machines. I was told by RBNA this was a legitimate business venture. I was presented with a letter from RBNA confirming their business relationship with CCA. I would never have thought in a million years, with such a big name and strong corporation, RB would be part of a scam like this one.

We bought 3 machines and had no help from RBNA. Although I had 5 people from the local distributor come to my home and make a lot of empty promises.

We placed one of them after sitting in the garage for 7 months. A year later we placed the second one. It was stolen a few days after placing it. The machine, the money inside, and all the product in it, gone. Now we were suppose to have a theft and vandalism policy that would replace that machine but of course with the bankruptcy of CCA and the denial from Red Bull that they are in no way responsibile, we are out money and pay on a loan each and every month for something we no longer have. Our third machine we placed has sold 2 cans in 6 months. Far cry from the $7,000 a month profit we were told we would make.

And the buy back program. What a joke that was. We were offered $1,000 for each of our machines. Some did sell their machines back to CCA and never got paid. CCA then sold those machines to other unsuspecting individuals. Well then RB came along and did a buy back program. RB did not follow the chain of custody on those machines so some of the machines they bought are now considered stolen. This is all documented through law enforcement.

I must say it seems we lost “peanuts” compared to what other victims have lost and my heart goes out to them. I spoke with a victim in NY yesterday who’s home is now in foreclosure due to this scam. Many have already lost their homes, retirements, savings, inheritances, and some divorces due to this scam. We estimated a total loss to all victims of approximately 25 million dollars.

How can a billion-dollar company like Red Bull allow this to happen? I bet this would never happen in Austria where Red Bull originated from, so how and why did this happen in AMERICA?

You would think that the owner of Red Bull, with all his billions would step up to the plate and pay each victim of this scam. It would be pennies to him.

RED BULL VENDING A SCAM?

Would Red Bull really risk their good name and valuable reputation by becoming involved with a sleazy vending business opportunity scandal? Apparently so… Read more

RED BULL: Vending Scam Alleged

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