Business Opportunity for ATMs - Troubled Investments?
To sell locations along with the equipment is selling "Business Opportunities", which requires that companies follow FTC Franchise Rules and get registered with 23 of the 50 states that require registration to sell biz ops. Many companies in the atm industry are not legally compliant with these Federal regulations, which makes it very risky doing business with them since they could be put out of business by the FTC (or their own state Attorney General) at any moment. This doesn't even count that these companies charge large amounts of money for their package deals that include mediocre locations that very rarely produce the monthly transactions that their high pressure sales people claim. These folks are after one thing...large commissions! Very few of them care if you make money on your investment with them, or not.
If you are thinking about doing business with a company that provides machines & locations together (a total package deal), they are selling Business Opportunities. We recommend being very cautious when doing business with companies doing this, because most companies that are providing "package deals" that include locations aren't legally setup to sell Business Opportunities, or "bizops". The Federal Trade Commission claims that there is more fraud in the vending machine industry (which investing in "Biz Op" atm machine packages falls under) than in any other industry.
The fact of the matter is, these companies can't get locations that are any better than what you can get yourself (or by using a locating service, which is also risky). If the bizop companies really had such high producing locations, why would they be so willing to sell them off to investors? If it's such a good deal to have these locations, why don't they just sit on them and make all that money for themselves?
These are the types of questions that you should ask your bizop representative before considering doing business with them, and don't forget to ask them to prove that they are registered with all the states that require bizop registration...and then contact those states for yourself to see if they are registered to sell business opportunities!
Many companies like this try very hard to make it sound like this business is a get rich quick proposition, where all you have to do is give them your money, and they will take care of everything else for you! Only problem is, the majority of companies operating like this are "fly-by-night" outfits just doing the best they can to take in as much money as possible in a short amount of time, because they know they aren't going to be in business very long.
Some bizop companies that go under due to their fraudulent business practices, end up starting another company and get right back into doing the same thing...telling investors whatever is necessary to get them to send in large amounts of cash.
It's much smarter to obtain your own locations so you can develop your own business relationship with your merchants where they know who you are. With most "package deals" companies, you'll never know exactly where your locations are, and you won't have access to online reporting which enables you to make sure you're being paid according to what your machine is actually producing. (we provide online reporting at no additional charge for all investors.) With most of these "package deals" companies, you'll never know!
|Read the Fine Print!...( if there even is any ) When the bizop company goes out and gets locations for you, they have the merchant sign a placement agreement with them . . . NOT with you! (their placement agreement with the merchant isn't going to have your name on it anywhere, and if it did it will only designate you as the owner of the machine, not the location!)|
Since the location agreement is between the merchant & the bizop company, then you have no legal claim to that location. (in other words . . . it doesn't really belong to you. It belongs to the bizop company) Most companies selling overpriced bizops retain the ownership of the locations that they are "selling" you as part of the package deal. Basically, you're just paying several thousand dollars for a machine package that you can buy from us for $295! Don't pay more for the same equipment than you have to.
Don't you think it would be a much smarter business decision to have your own placement agreement with each of your merchants, so you can have control over your locations? . . . after all, it is your hard earned money we're talking about here!
If you have the time to spend getting your own locations, you would be much better off in the long run, and you would have complete control over your investment by eliminating opportunity for fraud. When it comes to watching over your own investment, nobody can do this as good as you can! We don't want to hear anymore news stories about investors getting ripped off because it's very bad for the Atm industry as a whole. Hopefully, this webpage has served to inspire you to be very careful when investing with bizop companies and/or atm machine locators.