Archive for January, 2010

More Of The Missing Travelhost Magazine Puzzle Pieces?

January 28, 2010

Little by little, we’ve been accumulating peices of the Travelhost puzzle, like anthropologists assembling bones from the beasts of the past.  Thankfully, it’s been helpful to some people already.  We’ve had several notes of thanks sent to The Publisher’s Advocate, and hope to have many more.  Keep up the good work everyone, and thank you all for your help!  I’d especially like to thank those on the inside, for doing what’s right…let your conscience be your guide!

On to todays post…

Whispers of “TravelGhosts” from the halls of the Travelhost Marketing Department tell me that $4,200 per quarterly issue is “earmarked” for marketing at Travelhost. I just learned this information, and find it to be quite interesting…if it’s true.

If you do the math, you get a big number! Let’s take a look:

Let’s assume Travelhost has 70 quarterly publishing markets…probably less, but I’ll be optimistic.

70 X $4,200 = $294,000 per quarter! $294,000 X 4 quarters = $1,176,000.00

OVER ONE MILLION DOLLARS “earmarked” for “marketing” yearly at Travelhost!

That’s not counting the millions of other dollars that cover production and printing (and executive overhead).

Does ANYONE see a million dollars per year in marketing hard at work?

I’m thinking these dollars are “earmarked” for marketing Travelhost markets to potential AP’s (market expansion), not for marketing Travelhost as “America’s Number 1 Travel Magazine.”  (Building the brand)  So in theory, the AP’s that are going broke paying the marketing budget, are actually paying for the marketing to their replacements for when they finally go bust.  Kind of like digging your own grave, if you get my drift.

Does Travelhost promote their brand in any way?

They’ve become quite good cheerleaders to their network of AP’s, hyping people up with “positive thinking” and planning to work the plan and plan the work.  This is all good stuff, especially when your brand has no legs of their own…preaching from the pulpit is about all you can do to keep the soldiers that are still alive…well, still fighting!

The only place I see any real money being spent is the 3 year old, unfinished website.

Which brings me to another question:

Has anyone wondered yet why Travelhost is building their website using a proprietary, wholly owned platform of their own?

The plan that is known inside the company, is that Travelhost will build an online presence that will take them directly to the consumer. Supposedly, in 5 years, they will have reservation systems, scrapbooks (MyTravelhost), meeting planners (AgendaBuilder) and many additional elements.

They fully intend to build the company to the point that the print component, the AP network, is but a small portion of the overall plan.

(The skills to do this haven’t been shown yet, but this is the plan, supposedly.)

AKA…they’ll virtually eliminate Travelhost’s reliance on the AP network. As the print product becomes less and less important, and the website starts generating revenue of it’s own…they won’t really need you all that much anymore…will they?

One of the core first steps is to populate the website with local business listings…what Dave Portener calls the “micro engines.” (It’s the new 1/12th page unit for the magazine that automatically populates the website, iphone, etc.)

Essentially, Travelhost is having the network develop the content for the website initiative. It’s an actual plan! A pretty good one from their point of view! Not so good when you’re the AP.  Why?

Well, to start with it, the AP network is paying for it.

But guess what… THE AP NETWORK DOESN’T OWN IT!

So, considering the fact that the AP network doesn’t actually own the website (we just have “use of it” while we’re AP’s), where is the rest of the money going?

Advertising? No.

Direct mail? No.

Email newsletters and blasts? Not yet.

Radio and TV spots? Nope.

Social media and online marketing? If it’s there, I don’t see it…unless I look really hard.

Why doesn’t anyone in NY know what Travelhost Magazine is, unless I tell them? Especially when $4,200 per quarter, or $16,800 per year goes toward “marketing?”

Since my total printing bill for 15000 magazines is $15, 750.00…over 25% of my dollars paid to Travelhost is earmarked for “marketing,” yet I don’t see a nickel of it going toward my market.

I see a few webinars on the schedule, and a “regional meeting” here or there…well, not “here” in the Northeast. But that’s a whole different post.  Why is the Northeast so barron of Travelhost markets?

My point is this. Where does all the money go, Travelhost?  Attention: There’s MORE:

Consider this breakdown…(these are real numbers)

If printing at a regular printer is about $5500,

and graphic design is another $2500,

and “marketing” is another $4200,

where does the OTHER $3550 go as well?

Does anyone know where this money is going?

I now have $7750 unaccounted for…every issue. 4 Times per year.

$31,000 per year, totally unaccounted for. (from your pocket, to Jim Buerger’s Ferrari?)

And I’M the one who’s labeled the crook by Travelhost? I’M the one being called an “extortionist” by Roger Thrailkill to prospective associate publishers out there! Dave Portener says I’M the one who “ran my business into the ground.” If you didn’t read that one, heres the link:

https://publishersadvocate.wordpress.com/2010/01/25/more-google-search-results-on-travelhost-magazine-scam/#comments

Can anyone break it down for me, please, because I don’t understand what’s going on here?

Why does this networks hard-earned advertising dollars disappear, leaving no evidence of money well spent anywhere?

Where does the money go, Mr. CMO?

More Google Search Results On Travelhost Magazine…”Scam?”

January 25, 2010

It’s kind of sad when a company has to purchase Google AdWords including “scam” after it’s name…isn’t it?

(OK: Update from Dave Portener (CMO of Travelhost), they didn’t “purchase” it, evidently it comes up automatically every time Travelhost is “googled.”  It’s still a PAID AD SEARCH.  However, point taken, Dave…you didn’t SPECIFICALLY BUY THE WORD “SCAM.” 

(I can admit when I’ve made a mistake!  Dave should do the same, since he lies to the people of this Associate Publisher network just about every time he sends out an email…it’s dispicable!)

(By the way Dave, you still haven’t proven that anything on my blog is FALSE.)  Now back to our regularly scheduled program…

When you Google “Travelhost Magazine Scam,” they have a paid text ad that pops up in the sponsored category!  Does that mean that Travelhost actually finally acknowledges that it is a SCAM?

Perhaps we DO have some progress here!

A couple of pages into the search, you’ll find yet another snipet from a court case where Travelhost had to defend itself against another Associate Publisher for FRAUD.

And, in their usual corporate bullying style, Travelhost motions for a change of venue apparently in an attempt to cause the AP to spend more money by having to go to TEXAS for court.  This is AFTER they probably caused said AP to go broke by overcharging them for the magazine…if history repeats itself, which it tends to do.

It seems that this time, their plans were foiled…and Travelhost was forced to defend themselves in Nevada.  This particular document only talks about the motion for change of venue, not the entire case…but it sounds as if it’s the same old story.

FRAUD and MISREPRESENTATION!

This took place in 1985.  Why do so many people claim that Travelhost has committed FRAUD against them?  Are all these people crazy?

Or, could there be some merit to the numerous claims of FRAUD against Travelhost?

This information was taken from: http://nv.findacase.com/research/wfrmDocViewer.aspx/xq/fac.%5CFDCT%5CDNV%5C1985%5C19850308_0000008.DNV.htm/qx

See below:

  GALLI v. TRAVELHOST  

  UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEVADA  

  Docket Number available at www.versuslaw.com
  Citation Number available at www.versuslaw.com
  March 8, 1985PETER E. GALLI and KAREN HUNTER, Plaintiffs,
v.
TRAVELHOST, INC., a Texas corporation, et al., Defendant
Paul D. Elcano, Reno, Nevada, for Plaintiff. , Phillip W. Bartlett, Reno, Nevada, for Defendant.

Reed, Jr.

The opinion of the court was delivered by: REED, JR.

Facts

Plaintiffs originally filed their complaint in this case in the Washoe County District Court, Nevada, on August 17, 1984. Defendant removed the action to this Court pursuant to 28 U.S.C. ? 1441. The complaint

Analysis

Federal procedure provides that “for the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. ? 1404(a). Consistent with this, a decision to transfer is committed to the sound discretion of the trial court. See Commodity Futures Trading Com’n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979).

The relevant factors for consideration whether to transfer a case are: the convenience of the parties and witnesses, the relative ease of access to sources of proof, the availability of process to compel the presence of unwilling witnesses, the practical problems indicating that the case can be tried more expeditiously and inexpensively elsewhere, and the interests of justice. See Gulf Oil Corporation v. Gilbert, 330 U.S. 501, 508-509, 91 L. Ed. 1055, 67 S. Ct. 839 (1947).

The burden is on defendant in this case to establish that there should be a change of venue. It is not enough, without more, to merely shift the inconvenience from one party to another. See Van Dusen v. Barrack, 376 U.S. 612, 645-646, 11 L. Ed. 2d 945, 84 S. Ct. 805 (1964).

If the plaintiffs were forced to travel to Texas with the several witnesses that are listed in Peter Galli’s affidavit accompanying the opposition to the motion of transfer, plaintiffs would be seriously inconvenienced. Coupled with the additional cost of litigation outside their home state, it may force plaintiffs to decide that the cost of bringing the lawsuit no longer supports its feasibility. It cannot be said that Texas is the more convenient forum for plaintiffs.

Further, in evaluating a ? 1404(a) motion, the citizen plaintiff’s choice of a proper forum is entitled to “paramount consideration,” and the moving party must show that a balancing of interests weighs heavily in favor of transfer. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255, 70 L. Ed. 2d 419, 102 S. Ct. 252 (1981). Defendant in this case has not met its burden. First, defendant actively seeks out and does business nationally. The contract at issue in this case was negotiated, signed, and executed in Reno, Nevada. Also, defendant fails to positively identify any witnesses which would potentially be beyond the jurisdiction of this Court. The simple assertion that the necessary witnesses probably reside in a certain forum does not justify granting a ? 1404(a) motion. This Court finds that the defendant has not met the burden of establishing that the transferee forum is more appropriate for this action.

Accordingly, the motion to transfer based upon 28 U.S.C. ? 1404(a) is denied.

In this case analysis does not stop, however, with a finding that transfer is inappropriate under ? 1404(a). As defendant asserts, there is a forum selection clause at issue in this case.

A copy of the contract is attached to defendant’s motion as Exhibit A. The agreement is a three-page document entitled “APPLICATION FOR DISTRIBUTORSHIP AND AGREEMENT.” There are blanks for the date, names of the parties,

 

“18. This Agreement is to be governed by and construed according to the laws of the State of Texas and venue for all purposes shall be in the State of Texas.”

Analysis of the validity of the forum-selection clause must begin with The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 32 L. Ed. 2d 513, 92 S. Ct. 1907 (1972). That case concerned a contract between Zapata, an American corporation based in Texas, and Unterweser, a German corporation, for Unterweser to tow a Zapata oil rig from Louisiana to a point in the Adriatic Sea off Ravenna, Italy. The contract provided that “any dispute arising must be treated before the London Court of Justice”. Id. at 2. The rig was damaged while in the Gulf of Mexico, and Zapata instituted suit in a district court in Florida. The Fifth Circuit affirmed the district court’s denial of a motion by Unterweser to dismiss. The Supreme Court reversed. Repudiating earlier decisions adverse to forum-selection clauses, the Court held that there were compelling factors in that case why such a clause, “unaffected by fraud, undue influence, or overweening bargaining power . . . should be given full effect.” Id. at 12-13. Among these factors was the extraordinary nature of the transaction in that case, involving as it did the towing of a drilling barge from the Louisiana coast to the Adriatic Sea. The forum-selection clause also had the effect of providing a neutral, specified forum for the adjudication of disputes, thereby eliminating any uncertainties. The Court further stated:

“There is strong evidence that the forum clause was a vital part of the agreement, and it would be unrealistic to think that the parties did not conduct their negotiations including fixing the monetary terms, with the consequences of the forum clause figuring prominently in their calculations.”

None of the factors mentioned by the Supreme Court are present in this case. This transaction is not extraordinary, nor is there any intimation that the parties need to ensure a neutral forum for the adjudication of the disputes between them. This Court should constitute a neutral forum, no different from the district court in Texas.

There is no indication on the face of the contract that the forum selection clause was freely bargained for between the parties. Nor was the Court presented with any evidence that the parties engaged in any specific bargaining over the clause.

Further, defendant did not provide competent evidence to support the argument that the clause was a “most-significant” part of the contract. At the time the contract in issue was negotiated and signed, the president of Travelhost was Robert E. Thomas. However, the affidavit submitted in support of the argument is by the current president of Travelhost, James E. Buerger. Mr. Buerger states in paragraph 4, page 2, that the “venue selection” paragraph has always been considered to be a “most-significant part of [Travelhost’s] entire Distributorship Agreement arrangement.” The Court has difficulty according much weight to this self-serving statement.

A forum selection clause does not oust this Court’s jurisdiction. There will always be open to either party the opportunity to present whatever evidence will move a court in the particular circumstances not to decline to exercise its undoubted jurisdiction. See LFC Lessors, Inc., v. Pacific Sewer Maintenance Corp., 739 F.2d 4, 6 (1st Cir. 1984) (quoting Central Contracting Co. v. Maryland Casualty Co., 367 F.2d 341, 345 (3d Cir. 1966)). This Court’s subject matter jurisdiction is properly based on diversity of citizenship. Venue is proper in the district of Nevada under 28 U.S.C. ? 1391(a).

IT IS, THEREFORE, HEREBY ORDERED that the motion for change of venue is DENIED.

19850308 <!–plsfield:

© 1992-2004 VersusLaw Inc.

Mr. Buerger was not a party to the contract, nor was he president of Travelhost at the time of the contract. It is the finding of this Court that the forum-selection clause is in the contract for the convenience of the defendant, and for no other reason.their addresses, number of copies per week of the publication, designated area for distribution, amount the distributor is paying defendant, and three additional paragraphs added on to the form contract. All of the above mentioned was initialled by the three signatories to the contract, Peter Galli, Karen Hunter, and Robert E. Thomas. The remaining paragraphs are not initialled. The venue selection paragraph is found at paragraph 18 of the 23 paragraph document. That paragraph of the contract reads:alleges in the first cause of action intentional misrepresentation and in the second cause of action negligent misrepresentation.

Please Be Advised…Results May Not Be Typical!

January 19, 2010
Here’s just another instance where Travelhost intends to mislead people, and attempt to lure unsuspecting investors, by making people believe that the folks in the testimonials represent the majority.

Every good marketer knows that testimonials are an excellent way to break down potential buyer’s barriers, in order to help sell your product or service.  Testimonials sell!
One caveat to this…the testimonials are supposed to show TYPICAL results, NOT the (1 out of 100) results!

This particular point is important enough for the FTC to require businesses using testimonials, to LABEL them if they represent results that ARE NOT TYPICAL, so that customers are aware of this!
Again, why doesn’t Travelhost follow the law? Probably because it doesn’t benefit them to do so…lets take a look:
I bolded the relevant part of this communication, and I’m providing a link to the Travelhost website where the violations occur.
Why is it important for Travelhost to avoid the truth?
Links to TH site:
http://www.travelhost.com/jsp/lovetestimonials.jsp
http://www.travelhost.com/jsp/lovemarketplace.jsp
http://www.travelhost.com/jsp/lovemarketplace2.jsp
(PLEASE BE ADVISED, RESULTS MAY VARY?)
An FTC Press Release:

For Release: 10/05/2009

FTC Publishes Final Guides Governing Endorsements, Testimonials

Changes Affect Testimonial Advertisements, Bloggers, Celebrity Endorsements

The Federal Trade Commission today announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act.

The notice incorporates several changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.

Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.

The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.

Celebrity endorsers also are addressed in the revised Guides. While the 1980 Guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement, the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.

The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.

The Commission vote approving issuance of the Federal Register notice detailing the changes was 4-0. The notice will be published in the Federal Register shortly, and is available now on the FTC’s Web site as a link to this press release. Copies also are available from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,700 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:
Betsy Lordan
Office of Public Affairs

202-326-3707
STAFF CONTACT:
Richard Cleland
Bureau of Consumer Protection
202-326-3088

(FTC File No. P034520)
(endorsement testimonial guide.wpd)

All Travelhost would have to do, is mention that the people in these testimonials are some of the ONLY people that are truly happy being a Travelhost Associate Publisher.  Some of the people pictured in those testimonials my not be as happy as Travelhost thinks they are!  There might even be a couple that are having financial difficulty as we speak.

The point is, why do they try so hard to mislead people?

I suppose the FTC will never enforce the rules upon Travelhost, however, I can tell you one thing: Everything written in my blog seems “typical” of the Travelhost AP.

Not so much with Travelhost’s site.

A Former Travelhost Employee Speaks…

January 13, 2010

Again, name withheld from fear of retaliation from Travelhost Inc., a former employee of Travelhost wrote in response to one of my blog postings.  I never asked this person their name, and assured them I wouldn’t use it in the  post.  You can read this exchange on this blog, but it’s buried…and I thought it was worth highlighting in a separate post, because it shows what it’s really like down there in Dallas, working for Buerger and crew…

The point of this copy and paste, is to show that: I’m not crazy, I’m not a crook, and OTHER people have seen what Travelhost has done over the years.  This time, proof from an ex-employee.  Which, by the way, is only one of many who have contacted me over the last couple of months.

Start of exchange:

I’m saying former employee because I cannot have my name published. I don’t care if you publish this anyway, I just want you to know this. Thank you.

I’m finding this information, along with other websites of other dissatisfied APs quite interesting. I do not know anything about the numbering system or their Tuesday meetings as they may have started this after I left, but it sounds completely possible.

When people first began saying Travelhost is a fraud I dismissed it as sour grapes by APs who just didn’t know how to sell, as was commonly said. But over the years since I have left and joined another successful publishing house I began to see it plain as day. They are in business to sell distributorships and print, that’s it. They have no concern, nor any staff, to accommodate a real magazine. Their Managing Editor is not technically a managing editor in the true sense of the word. They edit nothing. It’s title only to impress readers and future APs. What’s printed is what is submitted and never goes through a trained proofreader or trained copy editor — only people who check for accuracy against submitted copy. Once in awhile you get a proofreader who knows their stuff but that does not say much.

As for APs, those who sell more are appreciate more. I can understand that, but one BIG mistake you’re making is calling this a franchise. NEVER use that word. It is a distributorship. If it were a franchise things would be different. It’s laughable but I was once told that if it were a franchise Jim Buerger would have to control everything in each office, down to the unforms and the color paint. And he doesn’t want that kind of control. How stupid did they think we were!! They didn’t call it a franchise because they did not want to disclose information, as has been said. I hate being played a fool. Just hate it.

Yes, you are probably on the shit list, no doubt. You’re questioning the authority and the structure. NOBODY does that! Just wait until the awards ceremony. You won’t even be thought of. The awards will go to Denver and Ft. Lauderdale and Branson — you know, the big issues and those who have made money and kept their mouths shut.

Oh the stories I could tell! Then you would know why I’m no longer there! I wish you luck on your issue, really I do. I just wish that you started you own with your own title. Travelhost has absolutely no market value and very little name recognition. Believe me, I know.”

Former Employee

My response to this person:

* bdhickey Says:

Hello, and thank you for your response. Much like the AP’s in this Travelhost network, the employees at HQ are treated with little respect either. Since Jim Buerger likes to control the business like a Nazi dictator, I can’t imagine how much fun it must be to work there. I’m assuming you weren’t aware of this system, because they only let the “higher level execs” who are part of the scheme in on this info. It’s a shame, really…because this business could be so much more, if they utilized the tremendous talent of their employees and associate publishers.

Travelhost is most definitely a franchise, when you consider the criteria. And, the threshold is actually quite low, so they’re fooling themselves if they think it’s not, in my opinion (and the opinion of many others who are a hell of a lot smarter than me.) You and everyone that worked down there at TH HQ were trained from day one, not to use certain words or phrases that might point to this. I’m sure you, in whatever capacity you worked there, were largely unaware of the fraud taking place every day…but you may have had an idea. Just no one talked about it.

Well, I’m talking about it…and no one seems to be arguing with me.

I have yet to receive ONE drop of evidence from ANYONE, including TH HQ, that anything in my blog or website is FALSE.

Good luck in your new venture, and in your career. I’m sure you’ll go a lot farther, and be a lot happier, now that you’re working for a REAL publisher!

Brian

AKA “The Publisher’s Advocate”

Former Employee Says:

Thank you for your response.

My job at Travelhost included work in production and working with APs and future APs. I knew many of them personally after the years and was always struck with their sincerety and desire just to make it — for the most part. I helped to prepare for conventions and attended them, taught TIPS class, sat in on endless meetings in both middle management, sales and many with Jim Buerger himself. Strangely, after ten years of employment I was still not aware of the fraud. I heard bits and pieces about it by “disgruntled former APs” but marked it up as sour grapes.

Yes, Buerger does run the office like a Nazi dictator, and is proud of it. It’s miserable working there for the most part. The older employees rush around from desk to desk and he nears the production end of the plant saying “Mr. Buerger is coming! Mr. Buerger is coming” which sets off a flurry of activity of cleaning off one’s desk, hiding drinks and sitting up straight. One former employee who worked there well over twenty years, now retired, would actually run to her desk and apply her lipstick and brush her hair and end of gushing over the man. It was pathetic.

But the most important thing is that the truth come out in the business plan, and that new APs coming in are aware of it. Yes, there is money to be made if done correctly, as many APs do, but the devil is certainly in the details here and are worth pointing out.

Their corporate attorney, John Price, is on staff to be sure every i is dotted and every t crossed, and I’m sure he keeps up with every posting you have. I do find it interesting that they never challenge what you’ve written. The truth is never slanderous, as they say.

Former Employee

You are absolutely right on the money in everything I’ve read, and I have gone through every entry of your blog. It’s funny because I was talking about this with a friend of mine earlier today who was familiar with my experience with TH and I said I’m glad an AP finally has the balls to finally stand up to Buerger! It’s refreshing. Too many people around Buerger are nothing by sycophants and he tolerates nothing but yes-men (and women). He has an enormous ego as many people do, but unfortunately it has clouded his judgment.

As for them making money on the selling of markets over and over, it’s very true. In fact I once asked one of the salesmen, about the fact that the markets just don’t get off the ground, especially in smaller cities, and he just simply shrugged and said, “I’ll just sell it again!” I could imagine he wanted it to fail, as this was his bread and butter. That was my very first tip that something was amiss.

The APs are really in a very sensitive position. They buy in on all the good reports of Ft. Lauderdale, Denver, Branson, Key West, and so on, hand over their life savings, in many cases, then suddenly realize what they’ve got.. I can only imagine the near-terror in their mind once they realize they’ve purchased an inferior “franchise” (and I can now use that word) and then realize how much money they must sink into this month after month. I remember one lady in particular from, I believe, the Hill Country around Austin. She was a wonderful lady; young and full of ambition and connections. I talked to her and she told me she had, full of fear, handed over her only savings and was so excited to put this issue together. She had a very hard time selling and I believe put out a few issues but if I remember correctly, did not last. Indeed, she should have done her homework, but back then there was no real information on the internet and no way I could warn her, even secretly. I did feel bad for her because I knew her chances were slim..

Now I do remember in one board meeting, one AP made the comment to Buerger that she wanted to somehow tell new incoming APs about the expenses that were above and beyond the token $40,000 they paid up front. I heard this from another employee, and she said Buerger shut her down flat. That idea would not fly…This AP is a tough bird, I’ll tell you; I know her personally, and it’s a difficult thing to shut her down. But he was having none of that. Why? You and I know that no AP would buy into this plan if they knew every detail of what was ahead. Now I understand this instance is hear- say, but this employee was noted for talking and giving details. I believe the story is true.

Forgive me for going on and on, but I think of things you may want to know. I do remember also, sometime in the earlier 2000s (or zero years) that from one point of time to that same point of time a year later every new market they had achieved they had lost. Every single one. Buerger then changed things by coming up with bi-monthly issues. We pushed the APs to create theme pages which really did help quite a few of them get a better grasp on their editions. Detroit for one. That AP, a genuinely wonderful lady, had been publishing a very thin issue up until then until we designed theme pages and she went to town. It was nice, because for once Buerger realized he had to do something to make the magazines in the system successful enough to keep the presses running. They had plenty of turnover in the new markets, but suddenly the established editions were starting to fall. He even improved the paper and insisted that each issue be in full color from some that were black and white. I’ll give Buerger that one. But I couldn’t help think as I sat in meeting after damned meeting about this “Why the hell didn’t you think of this before now? I did!” But I didn’t say anything. Now I don’t know how well this has helped markets since but for a time it did boost the bottom line of these APs and they were able to print bigger magazine with “plop factor” as Buerger called it.

You are correct, Dallas has its own publisher. For some time Dallas did not have an edition at all. Sherry Buerger-Carr, Buerger’s daughter and VP, I’m sure you’ve met her, took it over and various people in the plant created a rather nice looking edition. Buerger was embarrassed that his own city did not have a presence. But they built it up to sell it, which they did and it’s still quite nice looking but smaller than what it was. Dallas has a lot of competition and with what the current AP has I think she’s doing pretty good.

Please use any information I pass along as you like. I appreciate your willingness not to include my own personal information. There were several people over the years that tried to stir up the network with the truth and Buerger and HQ were quite successful in making them look like crooks. Once such incident was someone published a publication called GhostPost, which took its name from the internal publication they used to do called HostPost. The people who published it did make some headway but they soon gave up. Now you have something much more powerful with the internet, and I’m happy to see it. Please know that if I can be of further assistance please let me know.

End of “former employee” exchange

Travelhost Responds To The Ripoff Report…

January 9, 2010

Travelhost finally responded to my posting on RipoffReport.com, with more lies and misleading words. They seem to be on free-flow down there in Dallas, as lies are just about all they’re good at. In an effort to show that I’m completely transparent here, i’m providing a link to Travelhost’s rebuttal to my post, even though they seemingly “rip me a new one.” Take a look:

http://www.ripoffreport.com/Newspapers-Magazines/Travelhost-Magazine/Travelhost-Magazine-Travelhost-FA5A9.htm

They seem to think that since I didn’t buy my franchise directly from them, all the fraud doesn’t count! And, they want people to think that I am trying to “extort” money from them, just because I’m exposing their fraud.  (Seems as if telling people about my bad experiences, and the bad experiences of many others bothers them.  Isn’t that too bad.)

I stated my “goal” on my blog and on my site from day one, and I’m going to repeat it one more time:

I’m here to expose Travelhost for who they are, in order to help people make the right decision.

Those who choose to believe me, can…and those who don’t, that’s fine too.

Yes, I’m upset that I was scammed, mislead, and my business was destroyed.  Of course I’m upset.  I am entitled to be upset, and I’m entitled to tell people about it.  Period.

Their rebuttal on the Ripoff Report was all about ME and MY motives. That’s fine, I can handle the false allegations.

But how about the truth, Travelhost?

Why does the truth hurt so badly?

Why don’t you just tell everyone how great Travelhost is, instead of attacking me?

Why?

Because there’s nothing good to say, is there?  It’s easier to blame Brian Hickey for griping about his bad experiences, than to MAKE THE BUSINESS MODEL WORK RIGHT.

I failed to see one fact about Travelhost in that rebuttal that convinces me it’s a good business opportunity.

I do, however, have a never ending supply of information proving otherwise…

Next week, we’ll explore some “Travelhost Love,” and expose some info from a former employee…interesting stuff!

Some Travelhost New Year Resolutions For 2010?

January 3, 2010

Happy New Year Everyone, and welcome to 2010!

I hope that everyone had a happy, healthy, and safe holiday season.  I did, and I’m very thankful to have survived it all.  I’m also very optimistic about 2010, and have spent the majority of the holidays preparing for the new year.

That being said, I’ve prepared a relatively simple wish-list for Travelhost, for 2010. 

If Travelhost really cares about it’s Associate Publisher Network, which you would think they should, especially since THEIR business depends on OURS…then they’d be happy to see that these changes are very simple, yet profound.

Taken from basic business practices, and from hours of discussions with my associates in the Travelhost network, whose names remain anonymous due to fear of retaliation from Travelhost, these ideas could catapult Travelhost into the information age (and tremendous profitablity!)

If Travelhost ignores these imortant changes, they are sure to suffer from their old system yet another year.  And, sadly, I believe Travelhost will ignore this opportunity to change for a few reasons:

1.  Travelhost has been operating the same way for over 42 years, and change is seemingly difficult.  Even if its the right thing to do, Jim Buerger won’t allow it.

2.  Travelhost has made way too much money by over-leveraging it’s Associate Publishers over the years.  Millions of dollars per year.  And, quite frankly, these new ideas leverage solid business principles, (instead of AP’s) that will in turn make money from ADVERTISING, not PRINTING.  Travelhost has to change from this printing mindset to an ad-sales mindset.  And that will be tough for them, but I know they could do it!

3.  Fear of retaliation from Travelhost Inc.  Travelhost has developed a network of smart, energetic, and capable associates that have been…for lack of better terms…beaten into submission by corporate bullying and strong-arming.  Most people in our AP network don’t speak up, because they are fearful of what Travelhost might do to them.

Our network needs to realize that:

A.  Travelhost is their BUSINESS PARTNER, (not a Nazi dictatorship?) and

B.  The AP’s money has funded this business for the last 42 years!

The people who bring home the bacon ought to have a say in what goes on in the Travelhost Network, no?

I’m afraid, because of these three main issues, 2010 will bring the status quo…and yet another year where Travelhost fails to grow the business.

It’s my belief, that with the five changes below, Travelhost can become a thriving business in a short amount of time.  A business that makes its money from paid advertising.  Advertisers will flock to Travelhost magazine, when it can be found in 300 markets, with penetration in every corner of our country!  And, associate publishers (and Travelhost) will all be profitable.  A win-win for everyone!

Without furthur ado, if I ever had the chairman’s ear for just a few minutes….here would be my proposed New Year resolutions (wish list) for Travelhost for 2010:

1.  TH immediately starts charging fair “actual wholesale” printing prices to
everyone in the AP network.  TH would charge what every other
printing/production house would charge.  (About HALF of what they’re
charging now.)  TH will then collect royalties as a percentage of gross
sales.  If TH has to trash the old printing presses they have right now, and sub it out…so be it!  It may be more profitable for all 0f us that way.

2.  TH allows AP’s to be flexible with: frequency, page count,
pressrun, quality and product.  TH should allow the AP to improve the
product, according to their local market’s demand.  Each market is different,
and a “one size fits all” concept just doesn’t work.  (NY and VT are
two different states, with two very different needs.)

3.  TH allows the AB to have voting rights for executive decisions.
TH needs to utilize resources better, by leveraging our people.  TH has a network
of very smart entrepreneurs, and needs a valuable liason between TH HQ
and the AP network.  (an AB with an actual say in the business, not what
we have now.)

4.  TH stops misrepresenting itself, and starts disclosing the facts to
prospective franchisees.  With some fine-tuning, this business will
thrive even better than it did before (300+AP’s?).  In 18 months, TH
starts following franchise-like obligations, like disclosure of the new success rate.

5.  TH finishes the website and does not charge the AP network for use
of the site at all.  Furthermore, the site belongs to the network.  Our money
funded it, our information (and labor) populates it’s fields, and our business
depends on it’s success.

There you have it folks.  Could this be the beginning of a new era for Travelhost?

I’m not so sure, but one could only hope.

Does This Story Sound Familiar To Anyone?

January 1, 2010

Hello Everyone, happy new year!

I stumbled upon this article (below) on the internet earlier, from this web address: 

http://openjurist.org/813/f2d/689/zar-v-omni-industries-inc

It seems as if this story, of a husband and wife, is a very familiar one.  Even though it occured over thirty years ago, it continues to happen the same way today.

42 years in business.  Same plan, same story.

Now if you read this article to the end, Travelhost prevailed in this case.  They’ve got a lot of experience at this.  Sad, but true.

If you can relate to this story in any way, please email The Publisher’s Advocate and let us know.  I’ve received so many messages from people out there, and hope to continue to try and help.

813 F2d 689 Zar v. Omni Industries Inc

813 F.2d 689

James and Betty ZAR, Plaintiffs-Appellants,
v.
OMNI INDUSTRIES, INC., Defendant-Appellee.

No. 86-1176.

United States Court of Appeals,
Fifth Circuit.

April 1, 1987.

W. Randolph Elliott, Pullman & Schendle, Dallas, Tex., for plaintiffs-appellants.

John A. Price, Greg Sivinski, Winstead, McGuire Sechrest & Trimble, Dallas, Tex., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before VAN GRAAFEILAND,* HIGGINBOTHAM, and JONES, Circuit Judges.

EDITH H. JONES, Circuit Judge:

1

In this diversity action, Plaintiffs-Appellants, James and Betty Zar (“the Zars”) challenge the district court’s directed verdict against them on their claims of misrepresentation and wrongful termination of their distributorship rights. We affirm.

I. BACKGROUND

2

Appellee Omni Industries, Inc., now known as Travelhost Magazine, Inc. (“Travelhost”), publishes and produces a “travelers’ magazine” containing information on local lodging, restaurants, entertainment, TV schedules, and similar information of interest to the traveler. Travelhost distributes the magazine through a system of local distributors, who are in charge of selling local and national advertisements in the magazine and distributing the magazine, free of charge, to area lodgings. The local distributor is contractually obligated to purchase a certain minimum number of magazines each week or month from Travelhost, and receives a percentage of the advertising revenue generated from his advertising sales and his local edition of the magazine.

3

In early 1977, the Zars became interested in purchasing the Travelhost distributorship for part of the state of Colorado from J. Elliot Knoll, who at that time held the distribution rights for the entire state. Negotiations culminated in a March 21, 1977 assignment to the Zars of Knoll‘s Distribution Agreement for the state of Colorado, excepting the Denver metropolitan area (the “Colorado Springs edition”). In September 1977, the Zars purchased Knoll‘s rights in the Denver metropolitan area as well (the “Denver edition”), thus giving them exclusive distribution rights for the state of Colorado.

4

In the course of their initial negotiations with Knoll, the Zars received “Travelhost Distributor Information” and “Travelhost Profit Projection” booklets, which contained various estimates of profits possible from a distributorship. After signing the March 21, 1977 assignment of Knoll‘s rights and paying $6,000 of the $22,500 purchase price, the Zars met with Travelhost executives, at which time they received additional materials containing the same profit projections. The Zars also claim that Travelhost executives represented that the Zars’ share of national advertising revenue (i.e., those advertisements appearing in Travelhost magazines nationwide) would be enough to cover the costs of buying the magazines, and that only one Travelhost distributorship had failed in the past.

5

Unfortunately, the venture was not as successful as the Zars had hoped. Although they combined their editions to produce one magazine for the entire state, the Zars received less than $4,000 in national advertising revenue while paying over $100,000 for magazines. The Zars suffered a total net operating loss of approximately $8,000 for the first three years of operation, as opposed to the minimum annual profit of $45,000 they claim Travelhost represented they would make. Additionally, the Zars claim that there was a yearly turnover rate of 30% of Travelhost distributorships, as opposed to Travelhost’s claim that only one distributor had failed.

6

In 1979, Mr. Knoll filed suit in Colorado state court to recover amounts owed from the sale of the Denver distributorship. In response, the Zars counterclaimed for fraudulent misrepresentation and breach of contract in the sale of the Denver edition, claiming that Knoll had misrepresented the number of advertisements and the amounts of revenue under contract in the Denver edition. In April 1980, the state court held against the Zars on all claims and granted judgment for Knoll in the amount prayed for.

7

At about this time, a dispute between the Zars and Travelhost arose over the minimum number of magazines the Zars were required to purchase under the Distribution Agreements. In May 1980, Travelhost informed the Zars that they were in default of their Distributorship Agreements because they had not picked up or paid for the last three issues of the magazine, and gave them ten days to correct the default. The Zars did not correct the default, and Travelhost terminated the Zars’ distributorships on June 5, 1980.

8

The Zars filed suit against Travelhost in Colorado state court in November 1980, claiming wrongful termination of their distributorship, that Travelhost was responsible for Knoll‘s misrepresentations, and that Travelhost itself had made material misrepresentations. Travelhost thereafter removed the case to federal court based on diversity of citizenship. In February 1981, the federal district court of the District of Colorado granted Travelhost’s Motion for a Change of Venue, and the case was transferred to the Northern District of Texas.

9

At trial, the district court granted Travelhost’s motion for a directed verdict on the wrongful termination and agency claims at the close of the plaintiffs’ case, and granted Travelhost’s motion for directed verdict on the remaining misrepresentation count at the close of the defendant’s case. The Zars now appeal.

II. DIRECTED VERDICT

A. Fraudulent Misrepresentation

10

The Zars allege that the profit projections contained in the Travelhost literature, along with the oral representations of Travelhost executives on the amount of national advertising revenue and the number of distributorship failures, fraudulently induced them to purchase the Colorado Springs and Denver distributorships. The district court granted Travelhost’s motion for directed verdict on these claims on the grounds that (1) the profit projections were not affirmative representations as to profitability, (2) there was no affirmative representation as to the amounts of national advertising revenue, and (3) there was no evidence of misrepresentations made as to the number of prior failures, but even if such misrepresentations had been made, they were not made with the intent to deceive or induce the Zars to enter into the contracts. Furthermore, the court held that any misrepresentations by Travelhost could not have induced the Zars to purchase the Colorado Springs edition because the Zars had already entered into a binding contract to purchase it, and any issue of misrepresentation concerning the purchase of the Denver edition was collaterally estopped by the Colorado judgment in favor of Knoll. We review the district court’s directed verdict on the Zars’ claims under the familiar standard set forth in Boeing Co. v. Shipman:

11

On motions for Directed Verdict and Judgment Notwithstanding the Verdict the court should consider all the evidence–not just the evidence that supports the non-movers case–but in the light and with all reasonable inferences most favorable to the party opposed to the motion. If the facts and inferences point so strongly and overwhelmingly in favor of one party that the court believes that reasonable men could not arrive at a contrary verdict, granting the motion is proper.

12

411 F.2d 365, 374 (5th Cir.1969) (en banc).

13

The district court’s view of the evidence before him has been confirmed by our perusal of the record. Despite their protestations to the contrary at trial, the Zars had committed to buy the Colorado Springs distributorship from Knoll and had paid him $6,000 of the purchase price before they attended Travelhost’s business training program in Dallas. Although the sales agreement required, as did Knoll‘s distributorship agreement with Travelhost, the prior approval of Travelhost for an effective assignment, the applicable clauses further require that such approval shall not be unreasonably withheld. In any event, the Zars’ execution and down payment on the contract bound them to its performance except in the event that the assignment was not approved. See generally Restatement (Second) of Contracts Sec. 230 (1981) (discussing the operation of conditions subsequent). Approval of the Zars as distributors was perfunctorily given at the outset of the Dallas training program. The Travelhost executives testified that the training program was designed only for actual distributors, not simply prospective purchasers. We therefore agree with the district court’s conclusion that there could be no fraudulent inducement by Travelhost to enter a contract which had already been made by the Zars. See Hazle v. McDonald, 449 S.W.2d 343 (Tex.Civ.App.–Dallas 1969, no writ).

14

Alternatively, we also agree with the district court that the alleged statements of Travelhost could not constitute actionable misrepresentation as a matter of law. We examine each alleged misrepresentation in turn.

15

1. Profit Projections. The Travelhost profit projections purportedly relied on by the Zars nowhere guarantee or represent that a Travelhost distributor will make a certain level of profit or income. Rather, they show what income and expense levels can be expected based on several variables, such as magazine size or whether national ads are sold into 10 or 30 local magazines. Lest there be any misunderstanding, all such profit summaries and projections introduced in evidence contain the following italicized disclaimer: “The above are projected figures and in no way reflect a guarantee on the part of the company, nor do they act as a minimum sales requirement on the part of the Distributor.” Mr. Zar is an experienced certified public accountant, and he and his wife and daughter testified that they knew these projections were ballpark figures and not guarantees.

16

The generally accepted rule in Texas jurisprudence is that future predictions and opinions, especially those regarding the future profitability of a business, cannot form a basis for fraud as a matter of law. Maness v. Reese, 489 S.W.2d 660, 663 (Tex.Civ.App.–Beaumont 1972, writ ref’d n.r.e.); National Newspaper Enterprises, Inc. v. Chitwood, 68 S.W.2d 264, 267 (Tex.Civ.App.–Dallas 1934, writ dism’d). As stated in Lloyd v. Junkin, 75 S.W.2d 712 (Tex.Civ.App.–Dallas 1934, no writ):

17

In order to effect a sale, induce the making of a contract, or place a proposed investment in a favorable light, it is quite common to make representations as to future value, productiveness, efficiency, or economy, or as to expected earnings or profits. But since that which lies in the future cannot be a matter of certain knowledge, it is held that all such representations must be taken and understood as mere expressions of opinion, and therefore their nonfulfillment cannot be treated as fraud.

18

Id. at 714.

19

Such is the case here. The profit projections estimated a distributor’s potential advertising revenue and income, but because they projected and did not affirmatively promise, they were not fraudulent representations. The district court properly directed a verdict for Travelhost on this issue.

20

2. National Advertising Revenue. The Zars next claim that, while in Dallas, they were informed that their share of the national advertising revenues, as indicated on the profit projections, would be enough to cover the cost of the magazines. Travelhost executives deny making any such representation. The Zars contend that the district court erred in directing a verdict on this issue.

21

We disagree. The record demonstrates that any comparison of the cost of the magazines with the Zars’ share of national advertising revenue would have been based on and in reference to Travelhost’s profit projections. We have concluded that nothing in those projections could serve as the basis of an action for fraud. The projections, in fact, estimate a range of potential national advertising sales revenue starting at zero. Moreover, Mr. Zar admitted at trial that he never requested, nor was he shown any actual national advertising sales figures, and that Travelhost executives had not expressly told him that his share of the national revenues would be enough to cover the costs of the magazines. Assuming, arguendo, that Travelhost personnel made a representation apart from the profit projections that the national advertising revenues would cover the costs of the magazines, such a statement would have been, like the profit projections, a future prediction or opinion of future condition. As the statements in this record form the basis for a claim of fraud under Texas law, the district court properly directed a verdict on this issue.

22

3. Number of Failures. The Zars assert that during the Dallas meeting they inquired into the number of distributorships that had failed and were told that only one had. In fact, as Travelhost executives testified at trial, two or three and perhaps more distributorships had failed. The Zars assert that this statement is an actionable misrepresentation which should have been sent to the jury.

23

However, we are inclined to agree with the district court that even if such a misrepresentation was made, it could not have been made with the requisite intent to induce the Zars to do anything. At the time of the Dallas meeting, the Zars had not yet contemplated buying the Denver edition, hence the representation could not have been made with the intent to induce them to do so. Further, as noted above the Zars’ contract with Knoll for the Colorado Springs edition was a fait accompli by that time, precluding any fraud recovery from Travelhost.1B. Wrongful Termination

24

The Zars also allege that the district court erred in directing a verdict against them on the issue of wrongful termination. The Zars contend that Travelhost’s position that the Zars were obligated to purchase 8,000 magazines per week (3,000 of the Colorado Springs edition and 5,000 of the Denver edition) constituted anticipatory repudiation of the distributorship agreements, and/or that Travelhost’s termination of the distributorships was not based on any breach of the distributorship agreements, but was done so Travelhost could rid itself of irritating distributors and appropriate the Colorado market for itself.

25

These arguments are devoid of merit. Under the assignment of the Colorado Springs edition, the Zars were obligated to purchase 3,000 magazines each week. The Denver Distributorship Agreement required a minimum purchase of 5,000 magazines each week. The Zars testified that they combined the Denver and Colorado Springs editions into one magazine because they felt that it was more economical to deal with 8,000 copies of one magazine rather than two magazines.

26

When the Zars asserted, in early 1980, that they were required to purchase only 3,000 magazines, Travelhost responded that they must either purchase the 8,000 minimum or supply documentation to support the entitlement to fewer copies. Despite the Zars’ failure to comply with these alternatives, Travelhost made a number of other offers, such as to provide the Zars with magazines at no charge for one year, in the hope of avoiding trouble. The Zars rejected all overtures. It was not until May 1980, after three shipments of magazines had literally been left sitting on shipping docks, that Travelhost exercised its contractual right to terminate the Zars’ distributorships.

27

Nothing in the record supports the Zars’ claims of anticipatory repudiation or ulterior motives in connection with their termination: on the contrary, the record indicates that Travelhost made numerous efforts to keep the Zars as distributors and ended the association only after the Zars refused to deal with Travelhost at all. As Travelhost did not breach the distributorship agreement, there was no fact issue on wrongful termination requiring resolution by the jury.

28

The judgment of the district court is AFFIRMED.

*

Circuit Judge of the Second Circuit, sitting by designation

1

As this disposes of this issue, we need not consider the Zars’ contention that the district court improperly excluded evidence of a 30% rate of turnover in Travelhost distributors. Such evidence, even if probative of the falsity of the representation, would not have shown any intent to induce, and thus a directed verdict on this issue would have been necessary in any case

THERE’S NOTHING WRONG WITH WHAT TRAVELHOST DOES I GUESS, EVEN THIS PARTICULAR FEDERAL JUDGE LET IT GO.  NO ONE IS OUT THERE TO PROTECT INNOCENT PEOPLE FROM TRAVELHOST MAGAZINE! 

THE PUBLISHER’S ADVOCATE HOPES TO HELP BY PROVIDING THE INFORMATION YOU NEED TO PROTECT YOURSELF.