I called an 800 number in response to an ad by this firm offering to setup investors in the vending machine business.
Their modus operandi is to overnight to you a very nice sales package after they walk you through about a 30 minute sales pitch over the phone first. Their principal business is selling small machines that they manufacture, that reside on poles delivering small size candy and similar snacks. Costs for machines span $27,995 for 100 machines to $97,995 for 400 machines. They call you the day the sales pack arrives and immediately set up a date with an "automated positioning service" (APS) that will help you (for "only" $$3000) find locations for the machines. The APS locator calls you. And then, if you hesitate on closing the sale with them, a series of "supervisors" or "vice presidents" etc. Call you offer to sweeten the offer with additional alleged inducements to buy using language about "totally risk free guarantee" offer. THERE IS NO SUCH THING, and even if it was in writing, one would have a hell of a time enforcing it in court.
I didn't invest and here's my reasons why:
1) The better business bureau (online) reports the firm has had a series of problems with customer complaints. Just find the BBB report and it breaks out all of the complaints. Many of them relate to misrepresentations or certainly misunderstandings on the part of investors about what the APS will or will not do and the effectiveness of the APS.in short, location is everything in vending, and most complaints pertain to customers making very little money at all because of the locations.
2) Multivend referred me to their APS agent in the Hilton Head area (since I was thinking of running my business in that area), Christopher R. Putnam, Cornerstone Marketing, 200 Main St Hilton Head, SC, 29926,866-650-4135/843-837-2036. A BBB check reveals a totally unsatisfactory report on Putnam.
3) You would have to sell a hell of a lot of product to repay the costs of a $97K investment in machines at questionable locations. THINK ABOUT IT: if you haven't done the hard work to vet the locations yourself to make sure they would be great locations, how is a professional locator going to find 400 locations for you for only $2-$3K? The answer is, by telephone sales or setups with affiliates he knows won't necessarily merit the traffic.
4) I called a PRO with 30 years experience in the vending business. He told me the following:
A) NEVER respond to an ad/call a firm with an 800 # or one offering to sell machines and placements for you... It just isn't that simple. MANY f these operators are SCAM ARTISTS, and, most of these situations are, simply, a way for those firms to get your money by promising rosy results that they can't deliver and can't promise you. Even "iron-clad" contracts with these firms will not get you your money back without a protracted court battle which could cost you the same amount in attorney's fees.
B) There's no substitute for doing your own locating work for vending machines. An APS is a waste of money. Vending is a SERVICE competitive business. Once you have a good location, you'll lose it if you do not service the machines to the satisfaction of the owner of the locale.
C) Owners at locations never charge for machine placements: they want the service to keep people on their premises for business purposes. So, you don't need to be donating part of your profits to some charity, as many of these telephone sales manufacturers claim as a ruse to cause you to believe they are altruistic.
D) The money today is in soda and food machines, small candy machines like Multivend sells. Cigarette machines are phasing out too for obvious reasons.
E) There are many great types of vending machines out there at much less cost than those offered by one manufacturer such as Multivend. Why put all of your hard earned money into one manufacturer and a professional locator?
F) THE RIGHT WAY to get into this business, is to network in your local area and find a legitimate operator already running a vending business and buy out a portion or all of his business. You can find these operators in local ads in the paper, thru the BBB or other sources or by running your own ad.
G) The vending business is a get started slow and vet your locations carefully business. Once they take off, you will be hard pressed to keep up with the service demands.
H) If you are retired, you'll want a route that demands about 2.5 days of your time per week, on the average.
I) There are many reputable professional associations associated with the vending industry. Join one and find out the right way to buy into the industry.
5) An FTC report highlights all of the indicia of vending machine scams (see www.ftc. Gov).
Remember... All firms like this have to do is ostensibly be in a position to argue that they met their contractual ogligations with you. You may not like your results that you thought they promised... But that is your problem because of your impulsive stupidity to invest.
This is why prosecutors have difficulty prosecuting... Because the victims who invest do so willingly often inferring promises or conditions or believing verbal lies that are not part of the contracts they sign.
Want to get into vending? Follow the advice in paragraph 4.
In closing, I am not accusing Multivend or Cornerstone of fraud or scamming. They wish to sell their machines and services respectively and that is understandable. But given my findings about them on a cursory check, and given the advice given by a pro in the business, why would you consider risking your hard earned cash when, with a little thoughtful work, you can get into the business the right way. Remember, I think all of our parents taught us "if it sounds too good to be true it is"... And that "... There is no substitute for hard work...". We need to heed these messages when we find ourselves thinking about any investment opportunity.
TimFalls Church, Virginia
U.S.A.
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