Vendmax & Your Candy Company: Coming to a City near You

February 11, 2009

vendmaxbigIn a previous posting today, I drew everyone’s attention to an ad that appeared in today’s Toronto Star.

It identified itself as Sip-N-Snack and claimed three things:

  1. Attracts Customers Like a Powerful Magnet!
  2. Now Launching in the GTA!
  3. Takes only one day a month
  4. Over $75,000 Annual Potential
  5. Including Locations from $16, 995! and
  6. Free Brochure 1-866-622-8722

Now click to this Vancouver Sun/The Province newspaper .pdf. Look at bottom left corner advertisement. Notice anything similar in this October 22, 2003 ad?

This ad identifies itself as Vendamax and Your Candy Company:

  1. Attracts Customers Like a Powerful Magnet! [same]
  2. Coming to Vancouver & Vicinity, [new city]
  3. Less than 2 hours per week (1 day per month?), [same]
  4. $40,000 Annual Potential [$75k in 2009]
  5. Locations included…$14,995 to get started, and [$16, 995, locations included]
  6. Free Brochure 1-866-622-8722 [same offer and telephone number]

I wonder how the investors in British Columbia made out with Vendmax and Your Candy Company? I wonder why a successful franchisor like this would want to change their company (specifically not mentioning the Vendmax name) but not bother changing the marketing?

Vendmax’s website: lists Tom Semeniuk as president, Barry Sobovitch, and Buffy Babb. Notice the heavy reliance on the Better Business Bureau. Fastest growing.

NOTE: An ad wanting to sell 5o machines for $100 each.

Your Candy Company: seems to have a South African connection, FAQs.

Earnings Claims in CDN franchising: $75,000 for 12 days work?

February 11, 2009

sipnsnackThis is an advertisement in today’s Toronto Star.

It is a listing under the “Franchising” section. At least 50% of the ad space in this section is hyping the Canadian Franchise Association’s upcoming The Franchise Show.

The Canadian Franchise Association bills themselves as “the national voice for Canadian franchising“.

Let’s see exactly what this alleged franchisor has to say for itself:

1. Earn $75,000 per year for 1 day of work per month. I guess that corresponds to $781.25 per hour (8 hours per day). Or if you wanted to work 2,000 hours per year, you’d be making $1,562,500 peddling branded drinks. This is what passes for investor protection in Ontario, more than 8 years after the passage of the Arthur Wishart Act (Franchise Disclosure).

2. Note how the extremely unknown franchise system trades on transnational brand titans such as Pepsi, Doritos, Lays, Red Bull, etc. This is a classic persuasion technique the confers legitimacy by associating with authority (this time, marketing or brand strength that “Attracts Customers like a Powerful Money Magnet!“)

3. It promises a system: it bundles locations with package. Why the heck at these revenue per hour figures doesn’t the franchisor just hire some flunky to stock the machines? This goes to the usual “turn key” proposition of a “proven system” that usually turns out to be nothing of the kind.

4. The flash “Now Launching in the GTA!” serves two masters: (a) it explains why no one has ever heard of Sip-N-Snack and (b) it lures those that want something new, special or up-and-coming. The phrase “This here poo-collecting franchise is the next McDonald’s…” is a related rhetorical come-on for the overly-trusting.

5. Placing the advertisement in the franchise section is intended to confer legitimacy or utilize social proof: other better-known franchise brands in the ads around this ad. This is important because this might well be the cheesiest fly by-night equipment business opportunity scam imaginable.

6. The total price point is important. At $16,995, if this were a total scam, very few investors would sue to recover their loses. The cops usually won’t investigate anything under $250,000 and the retainer for a lawyer is +$1,000. Like 99% of the defrauded, they won’t even report it to the local police and the Competition Bureau is a bloody lapdog.

7. Note the recognizable logo: Pespsi-Cola. And 5 exclamation points. This must be a hot deal!!!!! (Just because it is corny does not mean it isn’t really effective on a certain percentage of the population.) Fraud cuts across many socio-economic levels.

8. If this is a scam, the money is quickly sent away; well beyond the reach of any litigation or police investigation. Con games are well-thought out beforehand and the three-card monte table is quickly folded up.

9. But still if 10 people bite, that’s an okay return on investment for the franchisor and it keeps the revenue wheels turning at The Toronto Star, too.

10. Canada is a well-known white-collar crime incubator as recently portrayed by the CBC Marketplace in Buying into the pitch to become rich. In all confidence games, more than 50% of the marks are good for a second fleecing.

Any comments, particularly from those knowledgable about business opportunity frauds are welcomed.

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