Apparently so…
Reader Larry posted a disturbing account of how and why buyers of the Red Bull vending “franchise” were allegedly scammed by one of the world’s richest men.
Are you familiar with Red Bull, CCA and/or their vending business opportunity? Please share your insight with a comment below.
Based on evidence we have gathered from all over the country, it is our belief that when we the machines owners, began receiving the machines we purchased, Red Bull’s distribution network, which is made up entirely of independent distributors, revolted.
Red Bull distributors had signed agreements for exclusive territories with Red Bull, long before we were sold our machines. They considered that when Red Bull sold those same territories to us for the placement of machines, it was a violation of those exclusive territory agreements they already had in place with Red Bull. I would suspect that their claims may have had merit.
Red Bull was clearly aware that they were far more dependent on their distributors then they would ever be on us, because they didn’t have a network of their own, and that they also had a potential legal problem if they were seen to have breached a portion of their agreement with the distributors that spelled out the exclusive territories.
Red Bull then made the corporate decision to pull the plug on CCA, to stop the sales of the machines, and to try the shift the blame of the duplicate territories onto CCA. Red Bull then adopted the most devious and downright criminal portion of their plan to extricate themselves from this matter, by actively siding with the distributors to keep us out of the market, or drive us out if we were already there. Red Bull and the distributors at this time were pretending that they were trying to help us place the machines, when in actuality, they were treacherously working to get rid of us.
Red Bull during that time told us, in writing, that they were working with the distributors to help us place the machines. But let me ask does it make sense that this Multi-Billion Dollar Company, with all the assets at their disposal, they didn’t succeed in helping anyone place any of our machines?
After CCA folded, we weren’t aware that our local distributor resented the idea that we might place a machine in “their” territory, and that they worked with Red Bull to make sure that didn’t happen.
As far as we know, Red Bull did not succeed in helping any of us place even one machine. But instead of Red Bull just taking the financial hit and buying the machines back from us when they realized the problem created with their distributors, this greedy foreign company chose to allow us to be financially destroyed, rather than just pay us back for this mistake.
They waited until the financial strain of not generating any profit from our investment grew so oppressive, that they then “offered” to buy back the machines at 25-40% of the value we paid. Many of us had no other option but to sell them back at a loss.
But funnily enough, right after the machines were sold back to Red Bull, those machines that Red Bull said they couldn’t help us place, were placed almost immediately by the distributors. We have plenty of documented evidence to this effect.
So ask yourself, should we feel as if Red Bull did us a favor when they bought back those machines back from us at 25% of what we paid for them? Or do you believe, as we believe, that Red Bull sold us a franchise, and then worked to make sure we couldn’t establish our franchise?
You may not know what law this violates, but your gut tells you they broke some sort of law, doesn’t it? Well that is why we are staying in this fight. We’re doing it for our families, as a warning for others and for society’s need to punish huge corporations who willfully violate the law.
And one last thought to keep in mind: According to Forbes Magazine, the 49% owner of Red Bull, Dietrich Mateschitz, has increased his net worth from 2.4 Billion to 4.0 Billion since the sale of the machines began in 2005!
That is a gain of $1.6 BILLION dollars to his net worth since his company scammed our families out of their savings.
According to Forbes, in 2006 Mr. Mateschitz was the 317th richest person in the world; this year he is listed as the 260th richest person in the world.
When asked for his help in this matter, Mr. Mateschitz, after some hesitation, finally told us he was not interested in our problems. I think he probably needed to spend his time counting his ever growing pile of Euros, all the while laughing at how easy it was to scam hundreds of hard working Americans out of their money, and in their own country, right under the noses of their own government.
Companies like Red Bull need to hear the message that in American business, you need to play by the rules or you will be held accountable. Help us spread the word, to send a message to this company, and to pressure our government to act. Thank you for your help. – LARRY
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I agree with Larry 100%. And as he said we have documented evidence from all over the US to prove our case.
We did do our "homework" before purchasing our Red Bull vending machine franchise. And yes, we were told it was a franchise. I contacted the BBB, state and local officials in Florida, and could not find anything derogatory about CCA. I phoned Red Bull North America and was told they had an exclusive agreement with CCA to sell these vending machines. I was told by RBNA this was a legitimate business venture. I was presented with a letter from RBNA confirming their business relationship with CCA. I would never have thought in a million years, with such a big name and strong corporation, RB would be part of a scam like this one.
We bought 3 machines and had no help from RBNA. Although I had 5 people from the local distributor come to my home and make a lot of empty promises.
We placed one of them after sitting in the garage for 7 months. A year later we placed the second one. It was stolen a few days after placing it. The machine, the money inside, and all the product in it, gone. Now we were suppose to have a theft and vandalism policy that would replace that machine but of course with the bankruptcy of CCA and the denial from Red Bull that they are in no way responsibile, we are out money and pay on a loan each and every month for something we no longer have. Our third machine we placed has sold 2 cans in 6 months. Far cry from the $7,000 a month profit we were told we would make.
And the buy back program. What a joke that was. We were offered $1,000 for each of our machines. Some did sell their machines back to CCA and never got paid. CCA then sold those machines to other unsuspecting individuals. Well then RB came along and did a buy back program. RB did not follow the chain of custody on those machines so some of the machines they bought are now considered stolen. This is all documented through law enforcement.
I must say it seems we lost “peanuts” compared to what other victims have lost and my heart goes out to them. I spoke with a victim in NY yesterday who’s home is now in foreclosure due to this scam. Many have already lost their homes, retirements, savings, inheritances, and some divorces due to this scam. We estimated a total loss to all victims of approximately 25 million dollars.
How can a billion-dollar company like Red Bull allow this to happen? I bet this would never happen in Austria where Red Bull originated from, so how and why did this happen in AMERICA?
You would think that the owner of Red Bull, with all his billions would step up to the plate and pay each victim of this scam. It would be pennies to him.
Just go to http://www.ripoffreport and put Red Bull, redbull, or Creative Concepts of America in the search bar and you can read the tragic stories of the victims and what they have lost.
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.
Thank you for the story. I know that there are many of us out there. We all have our own story of how we were scammed. My husband and I have two little girls... now ages 4 and 6. When we bought the machines, we were hoping they would help fund their college savings. We used $15,000 of our savings... and lost it all. I know that $15,000 may not seem like much, but it is a huge hit for us. Here is our story:
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In November of 2005, my husband and I made a decision to start up our own business and buy 3 Red Bull Vending Machines through Creative Concepts of America, which was a“Red Bull Vending Machine Franchise Company”.
As we, ourselves, enjoy the Red Bull product, we thought that purchasing 3 Red Bull Vending machines was a very safe and smart decision… especially considering that this was a Red Bull FRANCHISE.
After doing our homework and speaking with a Red Bull / Creative Concepts representative – Jeffrey Youngbauer—we decided to purchase 3 machines at a cost of $4, 210.00 each. On 11/08/2005, a check in the amount of $12,630.00 was cashed. We received a business packet and 3 Red Bull vending machines shortly thereafter. Creative Concepts / Red bull referred us to a locating service whereby they found (very “shady”) locations for our 3 machines for a fee of approximately $1,200.
The machines failed horribly. Red Bull / Creative Concepts estimated selling an average of 27.6 cans a day (Gross profit of $.75 per can. 3 machines = $62.10/day, $434.70/week). It ended up that we were selling approximately 5 cans per week per machine.
In April of 2006, we received a call from Red Bull / Creative Concepts stating that they would like to extend the offer of buying back the machines because they had “upgraded their machines” to offering 3 products instead of 1. Of course, the buy back included a loss, which was expected. However, after much thought, my husband and I determined that the loss we would suffer if we sold our machines back would be much less than if we decided to keep them. So, we went ahead and agreed to sell back all 3 machines. A contract was signed and all seemed legitimate.
We upheld our end of the bargain and had all 3 machines moved to our garage. We contacted Red Bull / Creative Concepts, who had a moving company come and retrieve them from our garage. The agreement stated that Red Bull / Creative Concepts would buy back 3 vending machines at $2,800.00 per machine. A check for $3,000.00 would be issued once they had the machines in their possession and determined there was no damage. The remaining balance of $5,400.00 would be paid in equal payments within 6 months starting June 1, 2006 (to be automatically deposited).
The $3,000 never materialized. Rather, we received an email from Creative Concepts, declaring that they were in the 1st stages of bankruptcy. As Creative Concepts was a “Red Bull” franchise, we contacted Red Bull directly and let them know what happened. Red Bull admitted to having a relationship with Creative Concepts, but indicated that the relationship was severed once bankruptcy was declared. Red Bull disregarded our losses and completely ignored our continuous complaints and inquiries into the entire situation.
Red Bull is an unethical company, with very unethical business practices.
Sincerely,
Michele and Vincent Wallace
Thanks, Larry for getting this story out there. Red Bull arrogantly insists that they had no part in this matter. One distributor offered to pay a guy $150.00 each for his machines....What an insult.
Also, thanks Sean for this site!
Deborah
I fell for the Red Bull Scam to. We purchased the so-called “Red Bull Franchise” from Creative Concepts of America. There was a letter given to us from Red Bull North America to CCA confirming their relationship. We called RBNA and was told this was a good company and if we wanted machines to get them through CCA. This cemented the deal. Big name how could we go wrong.
With our purchase we were given protected territories, warranties, a theft and vandalism policy, and placement of our Red Bull vending machines in high traffic areas. Oh and lets not forget the money. Oh the money we were told we would make in this venture. My thoughts were this would be a great way to pay for the rest of my college expenses.
This whole business venture has been a joke. Who would ever think such a well-known company would ever allow this to happen.
The owner of Red Bull worth 4 billion dollars. Us Americans are out about 25 million. Red Bull needs to take responsibility for what has happened.
Jennifer
I am one of the many that was scammed by Red Bull and CCA and can confirm that these reports are totally on the mark. I was a young college student at the time and was looking for vending opportunities with a reputable company. I would not have felt so confident, but I knew Red Bull was a huge world wide corporation and a very popular drink. Of course, we all confirmed with Red Bull that Creative Concepts of America was their representative for vending machines. Red Bull sang their praises and the person I spoke with before finalizing my purchase of 10 machines, assured me that Red Bull Vending would prove to be a lucrative investment. Like others, this turned into the biggest nightmare of my life and and I will continue to pay off a debt for many years to come due to the lies and misrepresentation of this multi-billion dollar corporation. I'm amazed that people like this can continue to live and function knowing how many people's lives have been destroyed due to their actions. Some day, hopefully soon, justice will be served.
To Whom It May Concern:
My name is Ismael Halidou, and I’m from Alexandria VA. I recently entered into an agreement with a company called Creative Concepts of America (CCA) to purchase three Red Bull Vending machines and start a vending route franchise. I entered into this agreement on April 3rd 2006 at which time I paid CCA $14,555 for three Red Bull vending machines and 1000 cans of Red Bull that were to be shipped within forty five days of my purchase date. I have not received my machines and every attempt I have made to get my money back has failed. CCA claimed to be Red Bull’s exclusive vending distributor, and Red Bull led me to believe that indeed CCA was the only company I could purchase Red Bull (RB) vending machines from to start a RB vending route franchise. I have asked RB for help and their response to me is that I should make complaints to the Attorney General of Florida. I have been defrauded by big business people who have taken my money and refuse to give me what I paid for. Is this legal? If I did this to people I would justifiably go to jail. Please help me get my money back. I have already filed a police report with Broward county sheriff’s office. My case number is 06072465. I have also successfully sued CCA and was given a judgment in the amount of $14,555.
I was also scammed by CCA and REDBULL.
In 2005 I began looking for a Franchise opportunity. When I saw Redbull, I was excited because I knew Redbull was a leading product in the energy drink sector. CCA was in charge of distributing franchises for Redbull in my area.
I invested $27,000.00 to buy area rights, 5 vending machines & Redbull product to start my business.
I recieved my machines & product. Thats when I began to have problems. I had trouble locating my machines, contacting CCA, or getting any help that was promised by them, to promote my business.
It has been over 2 years, I have placed 3 of 5 machines MYSELF and have made about $1000.00 in profit. That is $500.00 a year. So I should recoup my investment in about 54 years!
2 machines are in my garage. I refuse to sell them back to Redbull, so that they can again profit from my loss.
I was lead to believe this was a lucrative business and that I would be supported and lead to success by CCA & Redbull. Instead, I have lost money and time. CCA is no longer supporting Redbull, or me, as was promised. I was mislead and then dropped by CCA and Redbull. I have lost a substantial amount of money & time because of this, what I believe to be a scam, by CCA and Redbull.
Sincerely
Frank
Burbank, California
USA
A lot of people lost a little, some lost a lot. RBNA and CCA should have come up with some sort of plan to reimburse us.
Yo tambien fui timado por RBNA y CCA. En marzo de 2005 compré un paquete de 3 maquinas "vending machines" por la cual pagué $14,600, nunca recibí las maquinas. Lo mas que pude recibir fueron promesas de devolucion de dinero pero nunca paso nada de eso. Ni un solo centavo, ni las maquinas, ni productos. Cuando RBNA decide retirar su apoyo a CCA ya hacia un mes que CCA habia cobrado mi dinero y supuestamente habia enviado mis maquinas a P.R. Eso nunca fue cierto. Yo espero que estas personas paguen por lo que hicieron y yo junto a las demas personas envueltas en este problema recuperemos nuestro dinero.