RED BULL VENDING: Michael Turko’s Story

Unhappy Franchisee Michael Turko comments:

There comes a time when corporations need to step up and reconcile poor business decisions and poor choices in business partners. Right is right, and Red Bull North America (RBNA) is just plain wrong.

I purchased 10 Red Bull vending Machines via Creative Concepts of America (CCA) for approximately $44,000 dollars. The machines arrived, with the initial stock of Red Bull product shortly thereafter. Along with the purchase of the machines and product, I was also purchasing a protected territory and a relationship with RBNA. This is all clearly stated in the purchase contract that I signed.

Shortly after entering this venture, it was announced via letter from RBNA that they had severed their relationship with CCA, and would no longer be supporting CCA as a business partner. This was shocking and of great concern to me, as my reason for making this investment was Red Bull brand recognition, and RBNA’s own first-hand confirmation to me that they did, in fact, have an ongoing relationship with CCA.

This business opportunity had been marketed as a Red Bull opportunity by CCA, with RBNA’s full blessing and knowledge.

Upon learning of the dissolution of the RBNA/CCA partnership, I attempted to contact RBNA several times to gain some clarity as to the nature of their abrupt suspension of activities with CCA. I never received a call-back from any Red Bull representative once I purchased the machines and product.

I then contacted CCA in hopes that they would address my concerns. After a very long and tedious negotiation, CCA agreed to buy back my machines at $3,000 per machine. A contract was signed to that affect. Payment was to be made by CCA upon receipt of the machines. The machines were removed from their working locations and put into storage with those that were never placed at all.

A moving company, hired by CCA, eventually picked up the machines and shipped them to Florida. I confirmed receipt of the machines at the warehouse that they were shipped to. I received proof of delivery from the carrier as well. This was something I requested…not offered by CCA or the warehouse.

I instructed the warehouse, which was obviously in some sort of arrangement with CCA, to NOT release the machines to CCA without my authorization, as they did not belong to CCA until payment was made to me. The warehouse agreed to follow my instructions.

After not receiving any payment or communication from CCA or the warehouse for two weeks (and several unreturned calls), I again contacted RBNA. They FINALLY agreed that they might be able to offer me some sort of settlement/buy back. The RBNA representative called the warehouse where the machines had been stored, only to discover that the machines were no longer there. They had been RESOLD to another party. So, basically, an agent of RBNA, CCA, stole my property and sold it to some other poor schmuck.

Not only was I now out $44K plus all the other expenses, but the machines were gone as well.

RBNA is responsible for putting their name on this venture, and authorizing such a sleazy, fly-by-night scam artist like CCA to represent them. None of this would have happened to me, or to anyone else, had Red Bull either been more discriminating in its choice of business partner/agent.

Red Bull could have done the right thing when they found out about CCA’s practices. They could have been proactive in giving me and others the opportunity to opt out of this program without severe financial damage. Instead, the battened down the hatched and simply ignored the enormous mess that they created.

Red Bull North America needs to be held accountable for allowing its agents to defraud so many investors who had believed in the Red Bull brand and had been excited and proud to be a part of such a success story as Red Bull. RBNA’s reaction and lack of ownership of this terrible outcome tarnishes a once brilliant name.

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