Yogurt industry imploding...
Alvie, you are missing the point. If Yogurt is so in, why are so many businesses closing? Think about it. It is because there is a demand problem for yogurt.
Repeat after me... THERE IS NOTHING PROPRIETARY ABOUT YOGURT, THERE IS NOTHING PROPRIETARY ABOUT YOGURT, THERE IS NOTHING PROPRIETARY ABOUT YOGURT. The industry is only supplied by a few companies. Yocream/Danon, SR Foods, Ante Mae's, etc. They only difference between many of these concepts is who has the better fish tank display in their store.
You mention kiosks in airports, universities, game rooms, etc. You fail AGAIN to understand that many of these venues ALREADY have had yogurt concepts for years. The train has left the station buddy. Vend is about 5 years too late to the party. So you are left with shady office buildings and poor visibility locations that will take anybody willing to give them a dollar. Privately owned game venue's like Dave and Buster might be a different story. Those venue's, though, would be hard-pressed to pay a royalty hence they can just add their own machines for a fraction of the cost.
If I could have bought some standalone machines with no-royalty and my own control of the software, it might have been a TINY bit more appealing. For any investor to buy into a proprietary machine, with proprietary software, with a proprietary brand, with a product that is easily duplicatable (yogurt); is not worth spending $50k on a machine. Let's assume I have the best running machine in the company...... If the company fails, what happens to the intellectual property that runs these machines. How does a poor franchisee get parts, updates, etc? As I stated before, if someone puts a deposit on a machine and the company goes bankrupt, what happens to the deposit? No state law can protect you under federal bankruptcy laws. This is why a trust clause is so important.
I'm almost feeling like this could be a glorified and unintentional Ponzi scheme. Here's a theory:
1) Franchisees give their hard-earned money for deposits on the machines.
2) Vend uses money to finance advertising, operations, and Yates large salary.
3) Cash runs short, so the company sells stock to raise cash and uses franchisee deposit as extra capital. Stock crashes and little valuation, so the company is forced to use more franchisee deposits to fund operations.
4) To stay liquid, the company keeps selling to new franchisee's to get more deposits to fund operations.
5) REPEAT
Anyway, you clearly haven't been following the industry. I give you props though for your commitment on the board.
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