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Vending machine company's flier may be making empty promises
Know the ins, outs of business ventures

Plain Dealing
Cleveland Plain Dealer, 10/14/2004

This article is reprinted without permission from the Cleveland Plain Dealer under the fair use doctrine. 2004 Original url: http://www.cleveland.com/business/plaindealer/index.ssf?/base/business/1097746573313651.xml

Elliot Maras has been promised the chance to fill his pockets with cash, and he has decided to pass.

Natural Choice USA sent him a hyperbole-filled letter advertising the seminar it plans to throw at a Cleveland hotel tomorrow through Sunday: "Elliot, you CAN have it all . . . More money than you've ever dreamed of, and the time and freedom to enjoy it!"

The flier doesn't say exactly what business Natural Choice is promoting, but Maras knows: It's vending machines.

Although Natural Choice insists "col lecting your cash is just about all you do," Maras says it ain't that easy.

Maras is the editor of a trade publication for the vending indus try and used to own vending machines. The last three years, he said, have been some of the "worst years in vending history." Job losses mean fewer folks in workplaces, and that translates into fewer sales.

What anyone going to the seminar should know is that in 1996, Natural Choice, also known as Antares Corp., paid $1 million to settle U.S. Federal Trade Commission charges that it misled distributors about potential earnings and used shills as references to sell vending machines and locations.

Last December, the company paid $10,000 to Maryland after the attorney general there accused it of violating state law. The consent order requires the company to give the state advance notice of its Maryland seminars.

Julie Taylor, Antares' marketing director, dismissed the FTC settlement as ancient history.

Taylor blamed the Maryland settlement on a renegade employee who slipped up by mentioning earnings. "Starting a year ago, no one at our presentations makes earnings claims," she said, adding "it's not get rich quick."

But get a load of what's in the invitation letter: phrases like "starts filling your pockets with cash in as little as 60 days" or "you can gain a lifetime of wealth and happiness" or "you'll see how easy it is to start money flowing into your bank account every day, every week."

Taylor said participants will be given 10 days to decide whether they want to become distributors by paying $20,000 for three vending machines and marketing and location help.

How many times have we discussed limited-time offers in this column? Business opportunity seminars have led many folks into losing propositions by firing them up with unrealistic expectations and pressuring them to invest before they have a chance to learn what it takes to succeed.

The FTC warns, "Fraud is most often associated with vending machine, display rack, pay phone, medical billing, work-at-home and some Internet-related business opportunities."

Here are some things you should know to protect yourself when you're considering any business opportunity:

Federal law requires companies to give you, in writing, the names, addresses and telephone numbers of at least 10 prior purchasers who are nearest to you. You should call these people, but it's even better to visit them in person to check their routes and interview them.

Sellers are required to provide, in writing, the number and percent of prior purchasers who have made as much or more in sales, income or profit as the seller claims you can make.

The seller must give you a written explanation of how it knows how much prior buyers have made and how sales and profits have been calculated, so that you can tell for yourself whether a claim is reasonable.

A discount isn't a discount if the price is inflated to begin with. Business opportunity seminars may try to sell you machines or supplies that cost many times the price you'd pay on the open market. (Maras says that, for a quick comparison on vending machine prices, you can even pop into Sam's Club, which sells them.)

Before you spend a dime on any venture, you'll need to learn about the business. In the case of vending, start with the National Automatic Merchandising Association's Web page for new vendors at www.vending.org/about_vending/index.html and click the consumer awareness and Vending 101 links. If you aren't willing to do your own research, you aren't ready to own your own business.

In vending, Maras says, it's better to find locations yourself than to let someone else pick them for you. The FTC says that it has found that some vending and display rack buyers were given locations that did not have enough traffic or where property owners did not want them.

Understand that business opportunity seminars and conferences have a way of inciting people to buy before they think. The FTC suggests you be wary of common sales pitches that promise:

You can earn big money fast, regardless of your lack of experience or training.

The opportunity is available for a short time only.

The deal is a "sure thing" that will deliver security for years to come.

You'll reap financial rewards by working part time or at home.

You'll be coached each step of the way to success.

The program worked for other participants even the organizers. Shills people paid to rave about their wild earnings - are a fixture at many of these events.

If seminar salespeople drop brand names, call the legal departments of the manufacturer or merchandiser to see if the seller is affiliated with the company or if the company has ever threatened trademark action against the seller.

For more information about business opportunities and your rights, visit http://www.ftc.gov/bcp/conline/edcams/bizopps/. (There's also a link to actions the FTC has taken against business opportunity companies.)

If you don't have a computer, call the FTC at 1-877-382-4357 and ask for the brochures "The Seminar Pitch," "Answering the Knock of a Business 'Opp,' " "Could 'Biz Opp' Offers Be Out for Your Coffers?" and "Franchise and Business Opportunities."

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