HUMAN HEALTHY VENDING: Are HUMAN Operators Making HUGE Profits?

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• Admin, thanks for your responses.

  Lucy, who is this "we" you are talking about that is going to be publishing "events" about this site.

  Still would like to see some hard data from some actual HUMAN operators if you are out there.

• By way of background I have been a HUMAN operator for over a year and have had machines in place for seven months. I decided to go with HUMAN after investigating several other similar businesses. I made my decision in large part because of the assurances of management that they had no intention of ever using a franchise model, an obvious misrepresentation at the outset. Now they are using coercive tactics to "induce" us to become franchisees instead of operators including threatening to take away certain critical rights that we were promised.

  Simply put, in my opinion "healthy vending" in general can be a good business. Again, in my opinion HUMAN Healthy Vending is not a good investment for at least the following reasons:

  1. The Cost of the Machines: The machines are grossly overpriced. You can purchase exactly the same machines that they sell for $10,000 - $12,000 for half that amount from several highly reputable independent distributors. There is nothing proprietary about these machines except for the sophomoric graphics on the outside. To put it simply, this means that you have to sell an extra 12,000 bags of chips PER MACHINE before breaking even just on the additional cost of the machine over fair market value. At 15 vends per day you can do the math as to how long it will take you just to get even. Eat healthy because you'll have to live a long life just to make up difference between what they charge and the actual value of the machines.

  2. The Quality of the Machines: Although these machines -- which are inexplicably manufactured in Spain (and are probably the only thing manufactured in Spain) -- look nice and are cool to watch operate, they are difficult to operate and almost impossible to maintain. Almost none of the machines I have purchased to date from HUMAN have arrived without a significant defect before they are even placed in service. Moreover, these machines are broken constantly. Parts literally fall off almost every day. Fuses blow constantly (and AVT has the temerity to charge you for new ones even when under warranty). They are also very complicated to fix. Unless you either have an enginerring background or can afford to hire a full-time factory trained technician (as I have been forced to do) stay away from these machines or they will become the worlds' most expensive doorstops. In short, these machines are absolute lemons.

  3. Adventising: HUMAN promotes their machines as being different because they come with electronic screens at the top. They charge about $2,500 per machine for such screens which consist of some sheet metal and a small computer with a monitor. These could not cost more than $500 to produce and are broken almost all the time (I had four of them go down in one week). More importantly, they serve no practical or economic purpose and are an enormous waste of money. When I signed up more than a year ago I was promised that there would be a national advertising campaign in place within six months which would significantly increase the cashflow being generated by the machines. In reliance on this repeated representation which also appears in their promotional materials I spent more than $12,500 on these screens. To date they have not generated a penny of income and there is no current indication that they will EVER generate any income. They were a complete and utter rip-off.

  4. Competition: I paid extra to have my contract provide that I have a right of first refusal on any location in my assigned territory. Now HUMAN has taken the outrageous position that it has the right to sell franchises in the territories of existing operators, further diluting business for both the existing operator and the new franchisee. (These guys are like Bialistachk & Bloom in The Producers -- selling the same thing over and over again and making a profit each time. The machines are the equivalent of "Springtime for Hitler"-- guaranteed to fail) When I've asked them to put in writing that I will still have a right of first refusal as against these new franchisees they have refused to do so.

  5. Selling Old Machines: I recently purchased 16 purportedly new machines. However, without informing me, without my permission and without even offering a discount, they slipped in two older machines with old technology. Except for the fact that I employ a highly trained technician I would never have known that this was old technology until they broke, of course. When confronted with this fact HUMAN's operations manager admitted that this was not current technology and further admitted that they did not tell me they were dumping old machines on me without my knowledge. I have asked them to replace these old machines with new ones and they have failed to respond to this request for more than a month. In fact, their in-house attorney refused to even discuss the matter further and then banned me from having any further discussion with any of the HUMAN technicial people.

  6. Location Development Assistance: The so-called LDA by which operators and franchisees are to obtain their locations is a waste of time and money and is, of course, overpriced. The typical fee for finding a location in the vending industry is less than $500.00 per location (yes, there are people who do that for a living). The kids who do the LDA work at HUMAN are very nice and atttractive young people but to my understanding and experience generally have no experience or training as location developers. their efforts are generally ineffectual and at a much higher than industry standard rate (as is true with everything they do even though they are less skilled than industry standard).

  7. Add on services: As with the machines themselves, all of the other products they provide are grossly overpriced for no apparent reason. For example, the credit card devices that they charge $750.00 for can be purchased "all day and every day" in the open market for less than $300.00. They charge $1,000 to deliver and install a machine. The industry standard is less than $100.

  8. Training: They lure operators and franchisees who know nothing about vending into the business by promising support and training of various kinds. However, training consists of a three day seminar, much of which is childish motivational nonsense (somewhere between selling vacuum cleaners and 1960's EST). As noted above, you WILL NOT be able to maintain these machines yourself based on this training and will be left at the mercy of HUMAN and AVT, resulting in significant machine downtime and extreme location anger.

  9. Additional Free Services: I was promised items such as public relations assistance, marketing and website development when I signed-up. None of this was provided -- even where providing a minimal level of the promised assistance would have resulted in HUMAN selling me a large number of additional machines. These are the same kinds of add-on services they are now promising to provide to franchisees. I respectfully suggest that you let experience be your guide as to whether these services will in fact ever be provided.

  10. Financing: When I signed up I was told that there would be a program in place in a few months to help operators pay for more machines. This same representation is now being made to franchisees. However, this never happened. You should know that it is extremely difficult to obtain outside financing for these machines. Most lenders (including the SBA) require a significant track record (usually two years) before they will make a loan and banks will almost never loan on these machines -- even if you have a great personal balance sheet, net worth and credit history. This is in part because of the general reluctance of banks to lend to anyone right now but also because the banks know that these machines are grossly overpriced and that they could not, therefore, recover in the event of a default. You should thus assume that the only machines you can afford will be those you pay for out of your own savings and that any expansion beyond that will be severly limited by the lack of available financing.

  11. Profitability: As others have mentioned, the profit analysis contained in the Handbook is grossly misleading for at least the following reasons. First, the average vend is closer to $1.00 than $2.00 as assumed, thus immediately reducing the projected sales per vend by almost half. Furthermore, the term net profit is misused. In fact, their analysis is limited to gross profit; i.e. sales minus only the cost of goods. It does not include any of the substantial expenses related to the operation of the business such as rent, gas, auto insurance, generally liability insurance, payroll and payroll related expenses once you need employees (which will be by the time you get 10 or so machines in decent locations), medical insurance (which you will have to provide under Obamacare (not a political statement just an economic fact), sales tax on many of the products in certain states, accounting and legal fees, etc. In sum, you will need a very large number of very well placed machinesbefore this substantial investment of time and money ill show a profit. HUMAN's projections are a work of fiction -- at best.

  12. Alleged Altruism: In part I decided to make this investment based on my belief that we were doing some good. This was based on the repeated promise (which appears on each machine) that 10% of HUMAN's proceeds are donated to organizations that fight childhood obesity. By my calculation, HUMAN's proceeds from machine sales to date should have been in excess of $10 million so that they should by now have donated at least $1 million to such charities. Over the last several months I have asked for an accounting to demonstrate that they are in fact making such donations. (This is important to me since I used their promise as a sales tool to attract locations and thus my reputation is on the line here) Remarkably, HUMAN has repeated and unequivably refused to provide such information. They will not even provide the names of the charities to which they make (allegedly) such donations. You can draw your own conclusions from this refusal.

  13. Timeliness: Of the dozens of machines I have ordered from HUMAN almost none have been delivered on time. This has not only caused me substantial angst since I have arranged my schedule and that of my staff around these major installations only to have to re-schedule (thuis losing days at a time) but it has also caused major problems for me with locations who were expecting the installations on a date certain and had planned events around the installations. HUMAN seems to think that consistently misrepresenting delivery dates is somehow normal in the business world and seem to treat deadlines as approximations or suggestions. Of course, any other company atempting to oprate in this fashion would be out of business within weeks.

  14. The Culture: A few final thoughts about the organization. The company consists almost exclusively of very nice and attractive young people who have little or no experience with business in general or with the specific tasks they have been assigned to perform .They are frankly great salesman and have intentionally created almost a cult-like atmosphere. While they are great salesmen, in my personal opinion they are terrible and inexperienced operators (I will leave it to others to conclude whether they are not only grossly incompetent but also dishonest.)

  One final note in overview. In response to the various submissions from other operators on the website HUMAN has chosen to make outrageous and unsubstantiated personal attacks (and I suspect their response to me will be a similar attack). However, PLEASE note that they do not in any way dispute any of the specific comments about the machines, their operation or their principal franchise salesman. They apparently hope that they can mask reality with name calling. They are trying to do the same in their franchise documents (at least according to Sean's statements during a recent presentation) by requiring that franchisee's communicate with one another only through HUMAN, thus giving HUMAN the opportunity to censor all such communication. I suppose the next thing they will threaten is to put you in a Stalag if you chose to exercise your First Amendment rights.

  I could go on. I won't. You get the drift. Best of luck.

• Thank you for the long list of advice. Why have you continued to purchase more machines if everything you say is true?

  I am a potential franchisee and would like more of the financial info.

  Thanks

• I grew very quickly in a few months and did not recognize all of these issues until I was up and operating for awhile. Also I had commitments to the locations that I had an obligation to satisfy.

  I don't know what additional financial information I can provide to you. Sorry.

  Finally, within a few days after I posted my initial comments HUMAN purported to terminate my operators agreement in apparent retaliation for informing potential investors of the facts concerning HUMAN. They are almost cult like in their attempts to suppress the truth and punish those who disclose the real risks of this uneconomic enterprise.

  Since I am no longer allegedly affiliated with human I do not expect any further postings.

• I would agree with Experience Operator on this. Don't waste your money. If you want healthy vending, just buy the machines and go get the sites yourself. Save yourself the headaches of partnering with HUMAN. Don't buy Jofemar, Don't do any business with AVT, and Don't use InOne Technology.
  Maintenance nightmare
  LCD screens nightmare
  Advendtising non existent
  Products are a pain in the ass to find, buy, sell, etc....
  Go to costco and try to buy Izze Juice in Blackberry only.
  Go to costco and buy popchips in BBQ. Whats your cost? Too High.
  I have many more, you get the point.
  Take the hours that you think you will spend on this business, multiply that by 4. Then take your profit, and divide that by the hours. Good luck making a living.

• We are looking at going into healthy vending and human is our top pick. There seems to be other companies out there but we like what human is selling and it does seem like the operators we are talking to are doing well.

  The only negative we have found is on this site. If we were to go it on our own with our own machines is it really just as easy to get the foods we need from Costco. We want to provide local and healthy only snacks. We have found a place to get the machines on our own, but we feel like the support of being part of something is luring us toward HUMAN.

  We see the disgruntled people. If I set up an anonymous conference call would people be interested in calling in and talking about Human from a positive and negative perspective?

• NoExperienceAtAll.....do you due diligence, there's better companies out there than HUMAN as you can see from all the misleading information on here. 1st off, they are providing illegal "earnings claims", the "Adventising" is a joke, the machines are made in Spain, are not very reliable and you will be married to AVT for servicing so more $$$ out of your pocket, they're not even Energy Star rated, you won't get the variety of products that you need from Costco, not to mention the inconvenience, and with a franchise you should be taking advantage of buying power as a franchise group, how does that make sense to buy from Costco? These are just my thoughts, take them for what you feel they are worth and good luck!

• Hi , I am not a HUMAN vending operator. On the other hand I am a successful vending opertator. I have to now compete with these HUMAN vending machines that are set right next to my machines. After reading the above comments. I'm not at all worried about the competition. I have made the changes I need to make in order to make my clients happy and I see these HUMAN machines as a temporary inconvenience. I actually feel bad for the operators of these HUMAN vending machines. Too bad they had to get taken like this. Due diligence is the key. If you do your due diligence you would find that healthy vending has only to do with your choice of snacks that you sell. You don't need a national franchise or funny painted over priced machines with stupid screens to do this business. This business like all other businesses are about people and relationships. Ounce you understand this very important fact. It's gonna get a lot easier.

• Whether it's because of Bill Wotochek or because their original model (based on adventising) has borne no fruit whatsoever, HUMAN is rapidly descending into a simple scam. In fact, it's already there!

  Everything's overpriced.

  Machines fall apart fast (monitors, fuses, cooling units, bill acceptors, coin mechanisms...you name it), and warranty is far too short.

  Their claims are getting more outrageous even as the reality has become more clear. They seem to be breaching franchise law on a routine basis (they should not even talk about adventising any more since they have not landed one national account).

  The new franchise model is a complete rip-off, including asking for a percentage of sales revenue from each franchise on top of their absurd markups on equipment, shipping and every other cost they can inflate.

  And now the CEO seems to be selling himself as some kind of guru, charging additional dollars so he can tell franchisees and operators just how much money he's made out of them.

  If you're considering being a HUMAN franchise, JUST SAY NO!

• COME ON PEOPLE!. Just listen to "experienced HUMAN operator". He spelled it out for you in detail. This is another Bizop joke. I have been in the vending business for over 25 years. The most I have spent on a machine is 2000 dollars. The average is about $800 dollars. Who the HELL cares if the machines is fancy. People want it to work. Thats it. cheap prices and make sure it works. If your into Healthy snacks (which do not work), take it from someone in the bus for years, buy them yourself. Wake up and do your homework. Find your own locations or get a food local locator. Vending is a hard cut throat business but it can work it you do it the right way. DO NOT BUY INTO THE HUMAN VENDING. A SCAM . The owners should die a slow death. making people lose 100k, unthinkable. I HATE people like them, they give all vendors a bad name. Dont invest stick to what you know