The vending machine industry brings in billions of dollars annually, making it one of the most appealing home business ventures for those looking to build their own little empire. The sheer diversity of machines means that there is now more than just the traditional candy and soda versions to choose from, which has helped raise that popularity, but what it has also created is an opportunity for unscrupulous people to bilk hard working folks out of their money.
The perfect example of this is a story that goes back to 2006, and finally came to end this year, but not before many people had lost thousands investing in a vending machine business opportunity. Back in 2006 Michael Eisenberg and his company, Lifestyle Vending when several investors claimed that they had been given fraudulent information about the vending opportunity, most commonly about how they could stand to make by getting into a vending machine franchise. It was also concluded that all the
information that is required to be released to franchisees under the Franchise Rule were somewhat less
than forthcoming, giving an overall false impression of the business potential.
In March of 2008, the federal court in the Eastern District of New York handed down a ruling that resulted in little more than a slap on the wrist for Eisenberg and Lifestyle Vending, and which basically allowed him to go and do the same thing again, with the caveat seeming to be, “don’t get caught this time.” Sure enough, Eisenberg ran out and immediately set up, not one, but two new vending machine companies named Atomic Vending and Energy Vend, both of which followed the same type of business dealings that he had offered with his previous business opportunity.
Over the course of two years, from 2008-2010, those companies sold franchise opportunities to the tune of a minimum $6,000 investment, with the promise that the investment would be made back in less than a year. Of course, that was all sales ballyhoo, and the figures were entirely and intentionally misleading. Eisenberg and his sales team sucked people in by convincing them that their machines would be placed in prime locations which were guaranteed to make money, but again, it was all just talk, and when those investments were never recouped, the investors turned on him.
Eisenberg pleaded guilty to all the charges, and this time around, the feds were not so lenient, handing down a 28 month prison sentence, a $7,500 fine and three years of supervised release when he gets out. He was also ordered to pay over 15K in restitution, which all still seems like a small price to pay, when many people that trusted him lost their life savings. The vending machine industry is still a great one to get into, but if you want to do so, the whole Eisenberg story serves as a warning that you must do your homework before trusting one company over another.