The Money You Could Be Saving…

if you weren’t publishing your magazine with TRAVELHOST.

It’s a bit funny, and sounds like a joke, but its the sad reality for all of us associate publishers at Travelhost. We pay double what our competitors pay for printing and production. I guess you could say it’s part of our “ongoing royalties” paid to Travelhost for using the name?

Now, paying double is enough of a competitive disadvantage that Travelhost forces us to endure, but let’s take a look at this from a percentage standpoint.

Most franchises charge a percentage of gross sales as a franchise fee, or royalty. Most range from 4-12 percent of gross, as per franchise.com. When you consider the average gross sales of a Travelhost associate publisher compared to the difference between the real cost and what we actually pay to Travelhost…WHOAH! Houston (Dallas)…we have a problem!

If the average AP over pays Travelhost about $8K per quarter, or $32K per year…and grosses around 100k per year, they’re paying a 32% royalty to Travelhost!

Now, how do I know most AP’s do only 100k per year in gross sales? Well, the majority of AP’s go broke in a year or two, which means they’re losing money, right? After you add business expenses such as shipping, distribution, postage, gas, selling expenses, etc…most AP’S are either at break even, or losing money. It’s that close.

The interesting thing, is that if most AP’s were publishing elsewhere, they’d still be in business! That extra 8k per quarter is a hefty fee, that cripples most (not all) our network. Ask any small business owner what 32k means to them per year…it’s sink or swim! Except for those doing exceptionally well…which brings me to another point:

What about those in the Travelhost network doing really well? Those people in the Florida markets, and other cities that host major attractions?

Let’s consider a market that bills out 1.5 million dollars per year. How much does that person pay as a percentage, in royalties?

Even if that person is overcharged twice what the rest of the smaller markets are overcharged, say…64, 000 dollars per year, they’re only paying 4.2% of gross sales. (64k/1.5mill) Wow…that’s right in the ballpark of the average now. But, about 8 times less than the rest of the network?

So here’s how it is, in case you’ve been “skimming,” and not reading carefully folks…

  • If you have a very successful Florida market, and bill over a million dollars per year, you pay 4 percent as a royalty.
  • If you have a very small, unsuccessful market (90% of the US) and bill out a hundred thousand dollars, you pay 32 percent as a royalty.

Does anyone see anything wrong here?

In my state, New York, it’s against the law to do this. And, I suspect it’s against the law in quite a few other states too.

If you’d like to make a formal complaint to the FTC, click the link below. You won’t be the first to complain to the FTC about Travelhost, and you certainly won’t be the last.

https://www.ftccomplaintassistant.gov/

A POTENTIAL ANSWER TO THIS PROBLEM?

Perhaps those who do well in Florida with the Travelhost business model would like to pay 32 percent of their gross to Travelhost like the rest of us, before they brag about the Travelhost opportunity, and how it made them rich?

Well…I’m not all that upset at either one of our complaintants (2), really. I never begrudge someone because of their success. However, not every market in America is so perfect for Travelhost. Selling Carvel in Antarctica HAS to be harder than selling it in Florida, right? Markets that attract a lot of visitors value those visitors much more, than markets who don’t see nearly as many. That’s part of the challenge selling Travelhost ads in a non-vacation area.

I’d be upset at this blog if I was one of the select few who made money from this scam too, I suppose. I suppose I’d bury my head in the sand too, and ignore what I’ve seen and heard for the last 20 years.

Or, would I?

I suppose my conscience would bother me, and I’d be unable to sleep at night. I’d have to tell what I believed to be the TRUTH even though it might make my business less profitable. Why…not only because it’s against the law, but because I have a conscience!

Which, is not something everyone in this network has, apparently.

WHY IS TRAVELHOST SO SCARED OF THE TRUTH ANYWAY?

We’ll talk about that one in our next post.

Happy Holidays, everyone!

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