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Red Bull Franchise Fraud

Red Bull is a famous brand.

Red Bull has a famous trademark.

Red Bull innocently enabled a biz op scammer, Creative Concepts, to steal money.

Hmm, do you think when people google "Red Bull vending scam" that Red Bull is going to be very happy with the results?

The story begins several years ago, as recounted by Stacy Bradshaw in Canadian Vending:

In the United States, both Coca-Cola and Pepsi are offering their respective energy drinks in Vending Solutions vending machines. Creative Concepts of America offers branded Red Bull vending machines.

The company provides operators with a three-machine package for $14,450 US, which includes three Red Bull vending machines, "professional locating services," 1,000 cans of Red Bull, and a one-year warranty on the equipment.

According to Creative Concepts, Red Bull originally designed their vending machines for use at the major sporting events they sponsor. Creative Concepts was selling these used first-generation machines and Red Bull decided to make them the exclusive distributor for their new second-generation machine.

According to technical support, "they (Red Bull) didn't want to go through the process of establishing routes and finding clients and having to create a whole other department."

Red Bull vending machines are not available in Canada, but Creative Concepts said they are working toward that goal."

Can you say unregistered business opportunity franchise, three times real fast.

There was the requisite advertising, not in the classified biz op sections of newspapers, but rather with franchise portals:

High Traffic Locations Are Currently Available And Are Included In This Opportunity!

An Opportunity That Offers:

Immediate cash flow
Amazingly high profit margins
Proven profitability
Easy to service
Immediate rewards and profits
Be Your Own Boss
Part-time or full-time
No experience required
Start with a small investment
Unlimited growth potential
Thousands of great locations
We will show you how from start to finish!

Start Small, See For Yourself, and Then Grow!

Currently, Creative Concepts of America, Red Bull Vending, is offering a New Package Deal that offers 3 machines, 1000 cans and locations for those machines for $14,750.

Complete turnkey packages start from $22,950, and include vending machines, initial stock of inventory, multiple retail locations, and complete support and service.

Our goal is to have you up and running, making money in less than 60 days!

Uh, can you say bizop fraud, bizop fraud, bizop fraud over and over again?

Well one person has a website talking about a Jack Baumann who apparently was involved in the Red Bull Vending fraud.

And of course we have the obligatory investor who lost more than $100,000 in the Red Bull Vending fraud.

Do you think that the FTC is doing its job in educating people about these frauds?

(Sean Kelly, at Franchisepick, has more details about the Red Bull Vending scam.)

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Full post as published by Misleading Advertising Law on July 04, 2008 (boomark / email).