Generation Next Franchise Brands Inc. (fka VEND)

[Officiousintermeddle]

Not all of the franchisees had their deposits placed in escrow. Under the laws of some states, VEND was required to escrow the franchisee deposits until delivery, but that was not true in every state. Also, some but not all franchisees may have demanded an escrow as a wise protection. There were other franchisees who were neither protected by state law or by their own negotiations.

Unfortunately for them, quite a few franchisees just trusted Nick and paid the deposit without adequate protection. VEND publicly disclosed that it was reliant on those deposits to fund its cash flow requirements.

Now, was it right and fair for VEND to take those deposits and spend the money? Some, including me, would argue that it wasn't, at least not under the circumstances. Nevertheless, it may have been legal for VEND to do so.

I doubt that VEND raided any escrow funds to pay for anything other than the delivery of kiosks to the franchisees who had placed those funds in escrow. Not because VEND is so honorable, but because there probably wasn't an effective and advantageous way to do so.