Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
RoBo is happy to pay the 12% royalty, apparently, although it seems he gets little or nothing for it. Of course, if his sales are down, that 12% doesn't amount to much.
RoBo is playing hard to get on the pizza box franchise, but I have faith. It wouldn't be the first time he's changed his tune.
Unfortunately, it looks as though the field has started to get crowded, with multiple solutions being offered by companies that are raising fresh capital. Just Baked may turn out to be just too late. But, as RoBo is happy to point out, that just means that you can buy the box at a discount.
What I've been wondering is what kind of pressure the new yogurt franchisor will put on the captive audience of franchisees to buy his new pizza box. Hey, Mr. Franchisee, you sure got a nice Nayax report on those machines, sure would be a shame if our support had to slow down because we can't get our new pizza boxes out the door.
RoBo's posts are the gifts that keep on giving. A veritable treasure trove. Ah, the memories of VEND.......
I am confident that he will see the wisdom of the pizza box at that point. A chance to get in on the ground floor before they, too, are selling for parts. The RoBo double-down, similar to the simultaneous purchase of stock and franchises.
Any Nayax reports? Just checking.
Hey, the price was up 49% today! It's a trading vehicle (but only if you can trade at prices that split the penny).
So, let me get this straight.
You’re happy after having spent $30,000 or so onVEND stock.
You’re happy after having deposited money for kiosks is that were never delivered.
You’re happy because the kiosks turned out to be so beset with issues that you can buy them for scrap.
You’re happy owning kiosks in locations that have suffered from the coronavirus.
You’re a deliriously happy guy!
NY is holding onto his shares for the Walmart announcement.
Smartest thing you’ve ever said.
.
That's a quote. Couldn't have said it better myself.
Goodby, Print Mates, we hardly knew ya!
So, it appears that Print Mates has finally been put out of its misery. Better to focus on pizza boxes, eh?
WAIT! WHAT? Where’s my insider info, Alvie? I want the secret handshake!
I can't hold a candle to you, Alvie, as I'm a rather immoderate moderator. Besides, I don't have any "insider" connections.
Speaking of names, it looks as though the Australian blokes who franchised a few kiosks have abandoned both the R&I name and the product, but may be keeping the kiosks in use for now, albeit in a very low-key sort of way. It doesn't look as though they are planning their future around those from what I can see. The happy ending may be that they have a better product and a better business plan without VEND. I'm making educated guesses about some of the above, but it all seems to make reason.
As for the surviving franchisees here, I suppose they will continue to eke out what they can from selling froyo and maybe buy a pizza box or two. I suppose the COVID 19 shutdown has hurt most of them, but I had assumed that the hospital-based machines would do well. Surprisingly, I saw that at least one of those had been shut down, and I guess there may be some retrofitting necessary to address the risk of spreading the virus. I wish them the best, but I still don't see what they get that's worth a 12% royalty.
Poor Art Budman! It looks like he got no love from the reconstituted Gennext team, so he's looking for gainful employment elsewhere. With his track record, it shouldn't take long.
The old gang is back together! (Or at least part of it.)
Looks like dreams can come true! Ryan Polk and a few of the old crew are running a combined R&I, Print Mates and Just Baked operation. And who wants to bet that those pizza boxes are being offered to the R&I franchisees at a special one-time price?
Things were pretty quiet on the Reis and Irvy's Franchise Owners FB page, but they have picked back up in the last few days. I wonder what's up?
Things have been pretty quiet in the bankruptcy case, but there was one interesting recent development. It seems that the bankruptcy trustee is serving a subpoena on Bank of America for account records, with a particular focus on a few checks.
One question that raises is why the trustee needs to obtain those records from the bank. You would expect that the company's records would be complete and available. Did something happen?
The bigger question is why there's such a focus on specific checks. Could there be some irregularities? And could it be that those irregularities are related to the fact that the company's records seem to be so incomplete that you need to go to the bank for them?
There's no time frame provided, and it will probably take a while, but sounds as though the trustee is gearing up to sue one or more folks for some questionable dealings.
Hey, DIRM, I think we may have lost our audience here (although I wouldn’t be at all surprised by a Robo post - and wouldn’t that be nice!). But if you are so inclined, I would love to hear more about your history with NY now that it’s probably safe to discuss. I have an inactive email account you could use - caymusconundrum at hotmail. I would be happy to share my involvement, but it was so limited it would probably just bore you. You, on the other hand, seem to have garnered some stories.
Final post, I suppose.
It looks like nobody's here anymore, anyway, but for the sake of finality, I'll post this update.
The bankruptcy court approved the sale of the business to Chessler. I think it's supposed to close tomorrow. While there's a chance that current market conditions might cause Chessler to back out, I'm assuming he'll go through with it, since it's not a huge investment on his part and he still has those pizza boxes to shill.
So, aside from lawsuits against Nick and others to recover illegal, imprudent and/or untimely payments, it's all over as far as Generation Next Franchise Brands is concerned.
So, goodnight, moon. Goodnight, RoBo. Goodnight, Sonata and goodnight, doesitreallymatter. It's been fun, but it's time to say goodnight.
Alvie, please turn out the lights when you leave.
I’m thinking that the only way it makes any sense at all is the pizza box tie-in. We’ll probably never know, but I do know that the froyo business isn’t worth $1.9 million by itself. The nightmare of resuming production and dealing with kiosk malfunctions alone would drive you away, but the prospect of selling pizza boxes to a group of known suckers is presumably worth it.
Well, well, well, Mr. Chessler.
So, it looks as though David Chessler will belly up to the R&I bar and take a shot at resurrecting the business after all. He's putting $1.9 million up for the opportunity.
Good luck with the new owner, franchisees! Do you like pizza?
Hey, RoBo, tell this franchisee to be happy like you. Here's the complaint he filed with the BBB:
10/10/2019
Reis and Irvy's (R&I) has taken my money and has not provided the products and services stated in the contract. I purchased a franchise from there a total of 4 robotic frozen yogurt vending machines. One was delivered (past the date required by the contract). The machine that was delivered did not function properly. The machine was in an "out of order" state the vast majority of the time. The machine was sold to me as an unattended vending robot. The machine required multiple resets a day to clear the error multiple errors. The machine would only function for a few minutes after a reset before returning to an “out of order” condition. R&I promised to fix this machine and made a couple of attempts to do so. The technicians that attempted to repair the machine (two different technicians arrived in person) express that the machines (all of them) are “just junk”. There were numerous attempts that I made to repair the machine using the R&I’s technical help line that ended in no change to the machine operating condition of only a very temporary improvement. I provided ample opportunity (months in fact) to R&I to remedy the situation by repair or replacement. R&I ignored the problem for three weeks after their service desk told me that they would send another technician to repair the machine. From Oct 2018 to Feb 2018 the machine only operated as long as there was someone (me) there to reset it. This was promised to operate completely unattended and be a “part time” effort for me (the franchisee). The location manager that I placed the machine in (Ft. ****** PX food court) demanded that the machine be removed due to the fact that it did not function the vast majority of the time and in many cases did not dispense product to paying customers. I contacted R&I and requested the removal of the machine and they did comply with the request with minimal follow-up by me. After the machine was removed however R&I did not contact me or offer a replacement or solution. I contacted them several days after the remove and requested a refund of my entire investment of $163,000.00. R&I a few days later offed to return $133,000.00 over monthly installments over the next year. I paid for the franchise in full in two payments the first to hold the franchise the second payment was required prior delivery of the first of the four machines that I purchased. I expected to receive better terms and requested an attorney to negotiate with R&I to increases the amount and reduce the time to refund my money. The attorney that I hired continually told me that the R&I attorney she was negotiating with would not or infrequently return call and rarely respond to emails. My attorney told me to accept the offer and be happy to receive anything back from my investment, I did that. R&I took this concessions to mean that I would accept different terms now. The payments they offered then were be far less spread out over years. This is unacceptable.
Mr. Chessler, could you please update us?
Is "this" about "finalized"?
There are 18 days left in which to do so.
Well, Nick sure is good at selling franchises, even when he needs to explain away his checkered past, and from what I can see, Chessler could use some help in that department. His pizza box seems to have developed near-zero traction.
So, here’s our collective fantasy- Chessler forecloses on whatever’s left of VEND, brings Yates back, and Nick sweet-talks the R&I franchisees into doubling down on pizza boxes (at low-low get-in-on-the-ground-floor introductory prices!). Chessler lets Yates use the pizza box money to get back into R&I kiosk manufacturing, Nick’s mouth writes a few more checks that his company can’t cover, and we get to watch the next sequel (fifth in Nick’s series by my count).
Wouldn’t it be nice?
Yeah, I think it's that pesky warranty that would inhibit me from selling refurbs, but if you could get the franchisees to buy them "as is", maybe so.
Chessler has an interest in a pizza vending machine company, so there's also a possibility he would want to find some sort of synergy or cross-marketing opportunities with that. So, maybe he'll find a way to recover something by marketing goods or services to the built-in base of R&I franchisees!
Your post made me wonder what obligations the franchisor has to each R&I franchisee.
I suppose you already knew the answer, but there is no obligation of any sort to provide marketing support.
The bankruptcy trustee has 60 days from the date of conversion to a Chapter 7 to assume or reject any executory contract such as the franchise agreements. He would presumably assume them only if either (a) there are no obligations of the franchisor under the franchise agreement that are unpalatable to the franchisor, or (b) someone (hi, Mr. Chessler) wants to purchase them and is willing to assume the franchisor's obligations.
I see only two reasons that the trustee/Chessler would not want to assume the franchise agreements, but they are big ones. First, there is a one-year warranty on the kiosk, so with the exception of those that were delivered prior to this time last year, there's a tail liability that may be significant (unless they are all performing - and continue to perform - like RoBo claims his are). Second, if a franchise agreement had additional as-yet-undelivered kiosks as part of it, you might not want to assume that obligation unless you had some (working) kiosks you can use to fulfill that obligation.
So, we have an interesting dilemma for Mr. Chessler here. If he assumes the franchise agreements in order to milk those tasty royalties, he may be biting off more than he wants to swallow. On the other hand, if he doesn't want to assume them, then the royalty obligation disappears in about another month. I suppose creative lawyers are working on other solutions that get Mr. Chessler a return on his invested capital without exposing him to potentially troublesome liabilities?
RoBo -
The bankruptcy case was converted to a Chapter 7 liquidation over a month ago. A trustee was appointed, and he retained counsel, also over a month ago. The trustee's only job is to liquidate assets in order to return money to the creditors. He has no interest in or ability to run the business. It's dead.
For over a month, franchisees have gotten absolutely nothing from R&I other than the right to use their IP, which is of very dubious value. They have, however, continued to pay a 12% royalty.
Chessler has made no filings in the bankruptcy case for over 6 weeks. Yet, according to you, he's "Looking forward to getting this finalized." What ever "this" is, it sure is taking a long time to be "finalized."
As each day passes, the successful resurrection of the R&I business becomes less and less likely. It would take a large infusion of capital to resume any meaningful operations, and Chessler backed out of his sweetheart financing deal because, according to him, the value just wasn't there. Taking him at his word, there's no reason to expect him to invest the sort of capital that would (miraculously) bring the business back to life. Yet, you somehow believe that he's going to put a deal together that benefits you and your fellow franchisees, which is contrary to what he's done so far.
I'm confident that something will eventually happen with Chessler and the remaining R&I assets, and he's likely to end up with most of the value in his hands, but as time passes, it seems that more and more of that value is represented by the 12% royalty that you and other hapless franchisees are shelling out. The longer you pay the royalty, the better off he is.
It's beginning to look like you are waiting for Godot.
Are all the franchisees waiting for Godot with you? It sounds as though some of them are not, what with the bargain-basement prices they have been offering their kiosks at.
You're an even more dangerous and mis-informed poster, dude. You might want to take a look in the mirror.
After all, you bragged about buying 50,000 shares and encouraged everyone to look on the bright side and see the tremendous upside potential.
And, even if your claims about your kiosk's performance are half-way true, you encouraged others to consider the opportunities of buying a franchise, and I happen to know that most who made commitments after that point in time (not to mention beforehand) were left wanting in one or more ways.
Anyone who listened to me and avoided the stock and/or the franchise is much better off for it. You certainly can't make the same claim.
I look forward to seeing whatever it is that is being finalized so I can understand the grand plan here. The vague references suggest that he is negotiating something with the bankruptcy trustee, but it sure is taking a long while. Filing a motion for relief from stay would have been a good way to light a fire under the trustee's butt, but let's see what comes of his unique strategy and see what you get for your 12% royalty.
Chessler doesn’t want R&I other than for whatever can be milked out of it during the wind-down.
How do I know? He could have picked it up in a sale by funding a little cash for operations just long enough for an auction to be arranged. He would have been the only bidder and could set the purchase terms with favorable court orders shielding him from problems. He backed out of the best deal he could have gotten.
Chessler just wants his money back and he’s content with the rest of the business going down the tubes in order to pay him back.
I believe Alvie has talked to franchisees in Houston. They’re easy enough to find, he’s been in VEND a long time and he’s been positive about the business, so why wouldn’t he strike up an acquaintance with them?
That said, I doubt he’s heard encouraging things from them recently. I think two of them have done reasonably well here (there’s the Space Center kiosk after all), and I know of another franchisee who seems to have gotten stuck with lousy locations. I doubt that even the successful franchisees see the bankruptcy and related uncertainties as positives. Rationally, how could anyone?
Flavor Burst!
Chessler!
Capital!
Real manly men!
Unicorns farting rainbows!
Gotta love that RoBo fella!
I suppose you aren't going to get a detailed response, but the silence probably tells you everything you want to know.
Chessler still hasn't moved for relief from the automatic stay (or taken any other action) in the bankruptcy case. The only way that makes any sense to me is that he has decided it's better to let the bankruptcy trustee collect the royalties for as long as he can and liquidate whatever else that can be liquidated for value (preference actions?), then Chessler can show up with his hand out to recover on his secured claim. That may be a smart move on his part so that he doesn't have to deal with the mess that he would inherit if he forecloses, but it suggests that he's not interested in resurrecting the business for the longer term. Can't blame him for wanting to keep his distance from this mess and avoid incurring additional professional fees, but it runs the risk that there won't be enough to pay him off.
I think Chessler regrets ever having gotten involved with VEND, but that goes for a lot of folks.
Can you spell Nayax?
There's no value in the intellectual property such as the brand and the patents. The only value at all would be the ability to prevent the franchisees who are currently operating from making use of the IP, but that value is purely a function of threats of being shut down, not true business advantage.
And I doubt there is any value in any of the physical assets.
What is tempting, however, is the value in the franchise agreements. That 12% royalty on the machines that are still up and running (and, RoBo's claims notwithstanding, it sounds like lots of them aren't in light of the many offers to sell kiosks at dirt-cheap prices) is worth something. It's just hard to say how much. My previous estimate was that it might be as much as $65,000 per month in cash flow. The problem is that franchisees will start dropping out, and remaining franchisees may start challenging the royalty in light of VEND's defaults. Besides, if someone were to try to step into VEND's shoes in order to collect the royalties, he might run the risk of being sued over the breaches under the franchise agreements, including the failure to deliver working machines.
I think there's enough value in the franchises for Chessler to want them, but maybe he's keeping his distance from them in the hope that the bankruptcy estate collects the royalties on his behalf. That only works if the administrative fees of the bankruptcy don't gobble up his royalties. He is probably claiming that they are his and his alone, but he has yet to take that legal position in a pleading in the case. It remains a mystery to me.
Thanks, RoBo, you never fail to amuse.
What you describe is the strangest Chapter 7 ever. In other words, no way.
It's great that you've had no problems, because there's nothing you can get out of R&I. I don't know what you mean by a "mechanism" that is in place - it sounds a lot like "strides" being made.
I do wonder about Chessler, though. I would have thought that he would move for relief from the stay so that he can foreclose on the intellectual property and other corporate assets, so there may be something going on that I can't figure out. It's still a long way from where we sit to Chessler owning the business, though. In the meantime, are you still paying 12%, and what is that getting you?
Yeah, Nick is a defendant in a half-dozen or so lawsuits, and that's probably just the beginning. He will almost certainly be sued by VEND's bankruptcy trustee, and maybe some of the other franchisees will decide to chase him. Securities class action lawyers tend to follow the money, and with VEND in an insolvent Chapter 7, I doubt they'll ever bother. But just the private litigation should be enough to sink Nick eventually.
I hate to say it, but the SEC seems not to bother with very many of the securities frauds out there, so who knows if he'll ever get nailed by them. I suppose if you and Sonata and others have filed complaints, there's a better chance, but my personal experience is that they decline to pursue a lot of very good cases.
The collateral damage to those who were too close to the action is noteworthy. The board members have been sued, and even though they are trying to get themselves dismissed, I doubt they'll get out of this mess whole. Ryan Polk also earned himself a spot as a defendant, as did some of the key employees, some of whom had been gone for a while. It pays to keep your distance from Nick.
How many kiosks are offered on the RIFO FB page, and why are they being offered at such low prices?
How many kiosks/franchisees have dropped out?
There may be investigations under way, but there are no proceedings. If you know something other than “strides”, you would say so.
Who is paying for the support? Who coordinates it? Hint: It’s not VEND or the bankruptcy estate.
Are y’all still paying a 12% royalty? What exactly does that get you?
If things were so rosey in franchisee-land, you wouldn’t be on here trying to convince us otherwise.
It was only $1,000 per machine, so it hardly mattered.
It was a scam to convince prospects that the franchise was a good deal. They didn’t tell them that PM got them practically for free.
Ha! It's always risky to interpret RoBo's posts!
As you pointed out in an earlier post, what he said made no sense. I think that's part of his genius - you can't really tell what he's saying, so he can always say that he was "right"! I lacked appreciation for his skills!
I may have chosen the wrong interpretation, but in any event, I'm confident that no one is out there selling kiosks for 12-15k. Even if they were, that's too much to pay for what will very likely be not much more than a conversation piece in the future.
I see that the Australian franchisee is converting their kiosks from Reis & Irvy's to their own brand, Lumi. It's not their exclusive sales channel (or even their primary sales channel) for their product (a dairy-free soft-serve dessert),and it's not even mentioned on their web site, so I guess they're just trying to salvage some value from the kiosks for as long as they can keep them working. I don't think even they would want another kiosk for $12,000 American.