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.
Michele and Vincent Wallace