In Jan 2020, I have just come back from Guangzhou, China. I have gone to inspect the vending machines before they were shipped to Singapore. Even when I was in China, I heard about an ongoing medical concern in another part of China.
Upon coming back, in just a matter of 2 – 3 weeks, there had been a massive outbreak of the COVID-19 pandemic in Wuhan.
Our main concern, as a company at that point of time was the franchisees’ interests. While they are responsible for the income status of their respective VendShare franchise, we feel morally compelled to do our best to protect their interests. Many of the existing locations at that time would be affected by a pandemic lockdown. There was very little time to act before circuit breaker and what lies ahead.
We made a decision that saved all the franchisees. We moved many of their machines to the hospitals. On top of the fact that hospitals would never be locked down in a medical crisis, it is also a good cause to provide great coffee at their places of work as they work on the frontlines to defend our country against the COVID-19 pandemic. It would be collectively a great thing to do together as franchisees and franchisor.
Without the franchisor, we are quite sure that all franchisees would have suffered total loss – but now there are franchisees who make money and there are some who have not.
We do sincerely apologise though that in our attempt and eagerness to quickly pivot the business to V2 of the franchise model in the shortest possible time, we may not have spent enough time and resources to reassure and pacify the affected franchisees. We also apologise that some of the payouts could experience some delays as we wish to consolidate and reduce the admin costs. We could have done better.
We also include the testimonials from other franchisees who understand the situation of our times and what we are doing to continue to operate the business, relocating the affected machines and planning for V2 of the franchisee, which we have communicated to all franchisees.
During the pandemic, we provided more than 30,000 cups of coffee to the frontline fighters against COVID-19.
To be a good corporate citizen we even organised the first-ever online zoom-facebook event interviewing the founder of Food Bank – their mission was to bring food to those
families or individuals most affected by the circuit breaker. Many of them are low-income families which may have problems with even basic meal requirements.
Our mission is to empower the middle class to grow their income via vending machines. We believe in it so much that we also absorbed the losses of many locations affected by COVID19 for 1 year. Although we legally can ask the franchisees to top up to pay for the operating losses, we choose not to exercise our legal rights at this time, given that some of our franchisees have lost their jobs and are facing financial difficulties as well. We have to exercise our compassion more so than our legal rights.
To set things straight
Of all the unhappy things that may happen to franchisor and franchisees alike, it does not change the fact that VendShare as a business offers vending machine franchise licenses to the market – and that franchisees have a duty to operate the business and the franchisor’s subsidiary maintains the machine.
As such, it is not a financial scheme. It is not an investment of money. They have duties in which they know exactly from the franchise contract. Many of the franchisees stated in the recent RiceMedia’s article on VendShare (17 March 2021) have not done any measurable activity to improve their own franchise locations.
As all businesses go, it may make money or it may lose money. The mission of VendShare is to allow the middle class to grow their income via vending machines. We believe so much in this mission that as the franchisor, we went all out to absorb the losses for one whole year for locations that are under-performing due to the pandemic.
The fact of the matter is that we did not ask them to top-up for the operating losses for some locations and we are absorbing their losses right now. Which franchisor would do that?
Many of these franchisees know that their designated location has no operating profits or that the money is not collected yet from our payment vendor – what payouts are they expecting? Don’t they know that their payouts come solely from the business activities in their franchise locations?
In that respect, what have they done to improve their business situation?
On the other hand, some of our vending franchises are making money and the franchisees are making money in those locations. Many of these locations have very responsible franchisees who bring customers to the machines. Many responsible franchisees of these money-losing locations are patient and are doing their best to improve their situation.
On the whole, VendShare is still making operating profits and some franchisees are making profits. Lots of adjustments have to be made.
The franchisees who are making a big fuss over their involvement in this business are still in the minority. In fact, as a result of the recent arguments and delinquent behaviour of the franchisees, many of them have voted in Dec 2020 and expressed that they are willing to either come out with money or non monetary assistance (providing evidence etc) to legally pursue the delinquent franchisees;
Franchisees are asked to fill up this form in Dec 2020 about how to deal with other delinquent franchisees – 4 choices were given –
1. “I want to take active step to protect my interest – including paying for legal fees, if applicable”,
2. “I want to take active step to protect my interest – including providing data/evidence, if applicable”,
3. “I don’t wish to take action against the offending party – I am fine if I personally suffer financial damages”
4. “I abstain – I am fine if I personally suffer financial damages”
1. “I want to take active step to protect my interest – including paying for legal fees, if applicable”, – 32 votes
2. “I want to take active step to protect my interest – including providing data/evidence, if applicable”, – 38 votes
3. “I don’t wish to take action against the offending party – I am fine if I personally suffer financial damages” – 6
4. “I abstain – I am fine if I personally suffer financial damages” – 6
https://form.123formbuilder.com/sfnew2.php?redirect=true&action=showreports&s=5739263&rid=0 (to see the graphs close up).
So there are a total of 70 franchisees who want to take active steps to protect their interests against those offending franchisees.
The article painted a picture where all franchisees are hurt or misrepresented, but the fact of the matter is that there are a lot of franchisees who are against the delinquent franchisees’ conduct and misbehaviour.
There are many franchisees who benefit from VendShare and the actions of these errant franchisees are affecting other franchisees. This is to the extent that they would provide resources to legally pursue these delinquent franchisees.
One of the franchisees is Tan Pei Kai. He is one of the people who contributed the most amount to this franchise system. He is currently working for the company. We have hired him so he can take care of franchisees’ interests and have a transparent account of what we are doing in the business. I’m sure with his own money on the line, he would also see to it that the company is running the business properly to ensure that we are protecting everyone’s interests in such trying times.
In his own words, “ As a franchisee prior to working at VendShare, it is understood that some of the locations were losing money due to Covid-19 while looking at the monthly statement but we weren’t told to pay or top-up anything. While it is a little frustrating that we are not making money, it is deeply appreciated as a franchisee that Raymond and VendShare were doing their best to save the business for themselves and for Franchisees like myself.”
Point by Point Rebuttal
I can respect the press for wanting to feature our story given that many of our disgruntled franchisees may have approached them but I also acknowledge the stance they are taking to represent the facts, it would be good if they were to feature our article;
1) First thing first, all names mentioned in the news article on https://www.ricemedia.co/current-affairs-features-singaporeans-lost-money-financial-scheme-vendshare-raymond-ng/ are all anonymous.
2) Rice has also made no attempts to reach out to us to hear our side of the story before publishing this story.
I believe that journalistic practice would demand that all names be made known for an accusation that serious. Technically from the description, we know who they are.
3) This is not a financial scheme or investment scheme. This is a franchise program. It is presented as such and not a representation of future or potential income of them as franchisees. We have zoom sales meetings as proof.
4) Payouts are conditioned on operating profits and on the condition that we have collected the money from our payment vendors. Also conditioned upon the fact that we have done proper accounting.
5) We do not collect deposits, all collections are revenue for franchise licenses sold.
6) While it is regrettable that 7 police reports have been filed, we have never been called up for investigation. The most logical reason for that is simple – no crime has been committed.
7) Some locations are not installed because of delays caused by COVID19. Such updates are told to all the respective franchisees. As much as I find it regrettable that a lot of delays are caused by COVID19 – do note one obvious fact – we didn’t start the pandemic.
8) Delinquent franchisees are only removed for the main reason of breach of contract (including refusal to sign NDA, giving fake NRIC information & categorically disagreeing with the contract).
Technically speaking, even if a contract abiding franchisee defames anyone in the company, he has full rights to stay in the Whatsapp group (defamation is separate from the contract although the victim can still pursue civil liability). However, any contract abiding franchisee would not have defamed anyone, to begin with.
9) And for the record, there is no ongoing investigation on us. We would like to think that this is because we have not done anything against the law.
10) Yes, the group of franchisees who were willing to talk to RICE is a small fraction of our franchisees. There is however a bigger group of franchisees who have indicated the intention to pay for the legal fees to take these delinquent franchisees to court for contractual breaches.
11) I notice at the end of the article a comparison is made between VendShare and various other investment schemes. We have no comments on other investment schemes but for a fact, VendShare is not an investment scheme.
In conclusion, we invite Rice Media to interview us or post our response to their article which only presented one side of the story. Guys, we would even get you cups of coffee while we are at it no matter the outcome!
See attached these additional documents.