More YTB Financial Shenanigans

YTB is once again demonstrating the lack of confidence lenders have for the company.  From a filing just made today:

On October 21, 2010, YTB International, Inc. (the “ Company ”) executed a Contract to Accept Deed in Payment of Mortgage Debt (the “ Prestige Contract ”) with Prestige Management Services, LLC (“ Prestige ”) with respect to the Company’s former headquarters located at One Country Club View Drive, Edwardsville, Illinois 62025 (the “ Property ”).  On December 16, 2008, the Company entered into a sales contract with Prestige pursuant to which Prestige agreed to purchase the Property for $1.5 million.  Prestige provided payment of $300,000 at closing and delivered a $1.2 million promissory note (the “ Prestige Note ”) secured by a mortgage on the Property.  Pursuant to the Prestige Contract, the Company agreed to cancel the Prestige Note and the indebtedness evidenced thereby and Prestige agreed to convey the Property to the Company.

Also, on October 21, 2010, the Company agreed to refinance its mortgage on the Property (the “ Mortgage ”) with Normandy Corporation (“ Normandy ”).  On January 20, 2010, as evidence of the Mortgage indebtedness, the Company executed a commercial promissory note (the “ Original Normandy Note ”) in favor of Normandy in the amount of $650,000 with a maturity date of September 15, 2010.  The Original Normandy Note bore interest at a rate of 14.5% per annum, payable in monthly installments of interest only beginning on February 16, 2010.  In connection with execution of the Original Normandy Note, the Company agreed to pay a loan fee to Normandy in the amount of $45,500, of which $3,250 was paid by the Company upon acceptance of the Original Normandy Note commitment letter, $9,750 was paid at closing and the remaining $32,500 was to be paid at maturity, along with the remaining unpaid principal amount on the Original Normandy Note and all accrued and unpaid interest thereon.

In connection with the refinance of the Mortgage, the Company agreed to pay off the Original Normandy Note and execute a new secured promissory note (the “ New Normandy Note ”) in favor of Normandy with a principal amount of $685,000 that matures September 1, 2011.  The New Normandy Note bears interest at 14.5% per annum, payable in monthly installments of principal and interest of $58,000 beginning on November 1, 2010.  The New Normandy Note is secured by the Mortgage on the Property.  The Company agreed to pay an origination loan fee for the New Normandy Note to Normandy in the amount of $17,063, of which $3,413 was paid by the Company upon acceptance of the New Normandy Note commitment letter, and the remaining $13,650 was paid at closing.

In the event of Default, as defined in the New Normandy Note, Normandy must provide to the Company a written notice of default.  If the default is not cured within 10 days from the date of the notice in respect of a monetary default, and within 20 days from the date of the notice in respect of a non-monetary default, the remaining unpaid principal, any accrued and unpaid interest, and any applicable prepayment penalties, shall, at Normandy’s option and without further notice immediately become due and payable in full.  Any payment of interest due under the New Normandy Note made 10 or more days after its due date must be accompanied by a late charge in the amount of 6% of the payment.  Any payment of principal made 10 or more days after its due date shall be accompanied by a late charge in the amount of 6% of the payment.  From and after the date of any Default or in the event the New Normandy Note is not paid in full at its maturity, the principal sum and all interest or other charges then accrued shall bear interest at the rate equal to the greater of: (i) 18% per annum; or (ii) the maximum allowable by law.

And if I mess up the summary, cut me some slack because this was convoluted.

 1. YTB sold their former HQ to Prestige when they were flush with cash. They got a down payment and Prestige defaulted on the remaining balance. YTB, exercising their rights, acted on the lien and retook the building back. Essentially Prestige paid YTB $300K for rent for almost two years.

2.  In January, YTB took out a loan of $650K at 14.5% interest and paid a processing fee to Normandy of  $45.5K. The deal was for interest only payments with the principal being due in September 2010. This principal was paid.

3.  Now, YTB and Normandy agree to essentially renew the note. But this note is for $685K and an additional $17.5K in processing fees and 14.5% interest. The note begins anew and comes with a $58K monthly payment of principal and interest. The loan matures in September 2011.

4.  Of interest in this note is that if YTB is late with any payment more than 10 days, there is a 6% penalty ($5,100). Additionally, in the event of a default--either a late pay, no pay, or other non monetary default, the interest adjusts from 14.5% to 18%!


It seems like YTB is still robbing Peter to pay Paul and hanging on by a thread. They entered into a bum deal for the old HQ, have had to sell off their current one.  And the latest quarterly reports are due out in two and a half weeks.

It will be interesting to see the results and the accompanying spin!

Aha, Gotcha, It's Not So Free Now Is It??

So, here we have it, the same MO as before. Something for nothing and then the pressure to buy more nothing!  Yes, you can do it for nothing, but hey, you may not make anything. But if you give me a dollar, just think of the millions you can make. You can come into Coach's Corner, be a Director, be one of the 10,000 millionaires being created, and oh yeah, at the end of the first two weeks, I will start sucking $20 a month out of your bank account.

Here's your opportunity to try this state-of-the-art, powerful, customized system for only $1 for your first 14 days!*

This system was designed with one goal in mind - Your Success! In fact, it's the perfect solution for those who are serious about growing their business BIGGER, FASTER AND MORE PROFITABLE! Just take a look at the perks when you have ZamZuu Pro!

• The most important information about your business in an easy to read, news feed format!
• Specialized Report Center to see exactly where your sales are.
• Alerts Manager that makes leading your team a breeze with emails or even text messages whenever a team member gets a bonus, makes a sale, or signs up a new Rep.
• Your own Training Center full of important, up-to-the-minute information on growing your business, special Leadership information, and much more!
• Access to sales tools such as print on demand products.
• Calendar functionality to keep you organized and focused for important appointments.
• Personal contacts manager lets you log important details about clients, your team members, and more with just a few clicks of a button.
• Search for your team members in the "My Team" search to check on their progress in a convenient, easy manner.
• Lead Capture Pages make finding new prospects a breeze - They're even social media friendly!

This new system is ZamZuu - at light speed!

*The 14-day $1 trial is only available one time. If you do not cancel before 14-daytrial ends, you will be charged $19.95 for your first month's subscription of ZamZuu Pro.

Thanks For the Notice

Wow, I am sure everyone will be up to speed on this with one day notice!  This was sent out by TravelPro on October 24th!

We have a very important update on Group Deposit Requirements.
Don't be left behind, group cruises via Carnival must be moved to group level by October 25, 2010 if you are wanting to handle yourself, otherwise the YTB groups department will begin moving your groups on that date if they have not reached full per person deposit.
YTB has thousands of groups and want to make sure that your group doesn't cancel. Please help in getting all of these groups protected by making sure your group is moved to group level or your cabins have full per person deposit by the above date.
Too often, we are forced to close group space prematurely due to a high number of bookings that are held without the required deposits.

New system enhancements will now allow YTB to automate the enforcement of our deposit requirements. This should result in better group and stateroom availability for a longer period of time.
Starting November 1st...

1. ALL group space held on a request level will automatically cancel if ALL required funds are not received by your option date. Make sure the # of cabins requested is reduced to match the monies in house. Remember that deposits made at cabin level do not count toward required deposits at group level.
2. YTB will no longer allow TBA staterooms to be held with partial deposit. Partial deposits made prior to 2nd option date will have to be applied at group level.
3. Any existing TBA staterooms with partial deposit will cancel on Nov 1st unless you:

1. Collect the remaining portion of full deposit and send in by Oct 31st.
2. CALL THE GROUP DEPT to move the partial deposit to GROUP LEVEL by Oct 31st.
   Example: If you are holding 8 cabins and 2 cabins are berthed prior to 1st deposit ($250/person), we still require an additional $25/person for the remaining 6 cabins at GROUP LEVEL. Otherwise ALL 6 cabins at group level will be cancelled on your first option date.

PLEASE USE THE ATTACHED GROUP IBR TRANSFER FORM. IF YOU FILL OUT THIS FORM, YTB WILL HANDLE THE MOVING OF MONIES FOR YOU. FOR QUESTIONS REGARDING THE MOVING OF MONIES FROM IBRs TO GROUP LEVEL, PLEASE CALL THE IBR HOTLINE AT (866) 400-9386 or (800) 327-5782
****Please remember to send copies to your in house agent if your group is listed on the website.
Notifications will be sent 2 weeks prior to 1st and 2nd deposit if you are still short on your required deposits. Please make sure you have your correct email address on file with the Home Office.
Remember that you can now request option extensions on line to avoid automatic cancellations. Requests will be granted based on demand for the sailing.
It is imperative that your group leaders create a sense of urgency in their marketing campaigns with phrases like the ones below. We would encourage you to try to collect full deposits in the future reminding your clients that they have more dining/stateroom choices when they do so.

• Book now to Guarantee these Rates
• Limited Space at these Rates
• Special Group Rates Available for Limited Time Only
• Book Early and Save More* (Refers to Early Saver/*Restrictions apply)

More information is available (including an FAQ) in the attached Group Deposit Policy.


Doug & Ronda Bauknight
AKA: TravelPro
Travel Agents / Network Marketers
YTB Travel Network

Wait, Another Change Is On The Horizon

It seems the Directors are not happy with the program as it is.  And we know that YTB/ZamZuu needs directors to keep recruiting so they must be kept happy at all costs.

We have heard from a Director in Texas that  there will be another comp plan "enhancement" soon because the current comp plan is forcing directors to sell products in order to make enough income. We were told that  Directors shouldn't need to sell products in order to sustain a livable income.  We were told to look for  an enhancement to the comp plan to characterize it as a "networking company" vs. a direct selling company. 

Apparently the Directors want to be able to earn a living by only recruiting Brokers and the current comp plan doesn't allow that.  I suspect that you will see an "enhancement" that will reduce or eliminate the need for Directors of a certain level to actually represent and sell a product. The spin likely will be that this is a good thing because ti allows the Directors more time to work with the "field" in growing their business.

Maybe Zam Zuu Isn't Such A Good Deal After All

After hearing all the hype about shopping with YTB/ZamZuu and how you earn all sorts of money back and why would anyone go to a retail store any longer when you can earn money back, I have to wonder if that is true.

One of the biggest bullshitters cheerleader in YTB is none other than the "TravelPro" who has yet to mention anything about travel than a river cruise sold three years ago.  Just the other day, he said,

A quick run to the local hardware store for a $2.00 wax ring enabled me to take the unit off the floor, snag the cup lodged in the drain and put the unit right back where it was within about 10 minutes.

And then he said,

A quick fix for this was a trip to the local Home Depot for a universal valve to replace the inside of the unit.

Really now, why on earth woudl anyone go to a Home Depot or to a local hardware store when all you need is right online in your YTB/ZamZuu shopping portal?

Just think of the money that could have been saved shopping at Home Depot through YTB/ZamZuu. Not only do they offer 1.5% off, the "TravelPro" could have earned a commission too!  While he did not say what the valve cost, just imagine the 1.5% savings on that $2.00 wax seal.  The TravelPro could have got that seal for $1.97 had he shopped through his YTB/ZamZuu mall.

 I wonder how many wax seals you would need to buy at this Zamtastic Price to recover your monthly rental fee on the site?  Let's see...$50 divided by  3 cents--yes, if he bought 1667 wax seals, the savings that this "opportunity" offered woudl actually recover his costs!

Alas, but as Yakov Smirnoff woudl say, "what a country."

How Is That New Addition Coming Along?

While YTB appears to still be severely strapped for cash, it seems that they must be  building an addition somewhere.  In this latest status update from Kim Sorensen, there seems to be some construction going on. Maybe the Kia dealership is taking over the studio?

Oh wait...never mind! Hey well the words DO sound alike!

UPDATE:  They deleted it and re-did it. Good thing I have the original!  By the way in broadcast, it is an episode. In print it is an edition!

Then And Now

On May 31, 2006 a Red Carpet Day was held at YTB Headquarters.  One of the speakers was Scott Tomer and here is a part of what he said:

I love this industry.  I love it.  I don't like it, I love it.  But I sure hate what's been done to it by some people.  This is my story.  I wasn't ever looking for something like this.  But I made something like $12,000 in 1980 and so before that it wasn't much better so I was always looking for something to make more money.  A friend of mine come by the house and said, Scott, I found these vitamins that are unbelievable.  They help you lose weight.  I weight.  I weighed 160 pounds.  "Hey, these are smart vitamins.  They'll help you gain weight.  They'll help you grow taller, grow some hair, smell better.  Nobody knows about this but us."  See, I never cared, but I have never been a health conscious person.  I'm still not.  But then he said something that got my attention.  He said, "Scott these are special vitamins.  They are $100 a month.  But, I think we can get rich selling them." I said well hook me up.  I wasn't going to take those vitamins for my health.  I was making less than $12,000 a year.  I was interested in that get rich part.  You know what.  In my first 90 days, I didn't find any of my friends stupid enough to buy those things.  I don't know if they were already healthy or they just didn't want to make money.  But, I went into Wal-Mart one day and I didn't notice them before when I was in Wal-Mart, because I didn't know Wal-Mart sold vitamins.  You might not know it either, but they do.  It was the same ingredients.  Now it wasn't from some special Chinese herb or Indian tree bark or some mystical thing from the southeast Pacific.  But it was the same ingredients and it was $15 bucks a month instead of $100 and I wasn't getting rich.  How long do you think I kept taking those vitamins that cost $100 that I could get for $15?

About 90 days later that same friend of mine came by the house.  I guess I was the only stupid friend he had.  I'll never forget this.  He walked in and he said, "Scott, do you have any idea how polluted the water is that you are drinking?  You know I haven't been thinking much about that.  What don't you tell me Ron?  He turned on the faucet poured some water into a test tube and put some dye into it.  He shook it up and said, "see what you are drinking?"  I said, "What's in there in."  He said, there' herbicides, pesticides, you're going start drinking suicide.  We have special filters we can special order these for $229 bucks a piece.  You can get a case of these and get a discount, 40%.  Scott, I know we can get rich selling these."  I said, "Hook me up."  I didn't buy that because of parts per million, carbon filtration.  I didn't want that.  I wanted to get rich.  It was easier to sell by the kit than buy one at a time.  Do you know it was a short time after that I went into Wal-Mart to buy my monthly supply of vitamins and you know I noticed that they sell water filters in there too.  It was the same parts per million, carbon filtration; the same manufacturer for $29.95.  Folks, it disgusts me the garbage I see people put a label on, call it a special, mark up the price, so you can go peddle it to your friends, just for you to make money.  

So, Scott Tomer, what has changed since May 31, 2006? Why aren't you still disgusted about  the garbage you see people put a label on, call it special, and mark it up to peddle it to friends?

Why was it bad for your friend Ron and good for you now?  What has changed in the last few years, I am sure many people would like to know!

In case the transcription above is incorrect, you cam listen to it right here. Tune in about the 22 to 26 minute mark!

Didn't World Ventures Learn Anything?

Deja Vu all over again. Just another face of a pyramid scheme. I wonder if the fact that World Ventures bought Rovia (a legitimate agency) will have any bearing on this when they start to feel pressure.  Watch this video and see if you think it is any different then the same old BS that YTB tried to peddle a few years back.

For Your Amusement Part II

Over the years, we have said that many of the YTB zealots were blind to reality. When YTB lost the majority of their reps and RTAs, they cut their price. When that didn't work, they cut it some more. Finally, they decided to give it away for free and try to make it up on all the other options and high pressure sales tactics. Quite simply,  most of the people in YTB could not afford the $500 and $49 a month.

But one of the zealots who still believes has found a new product to hawk in addition to YTB. It is interesting to note that YTB used to prohibit people from representing other opportunities, but in an attempt to stop the flow of people leaving, they backed away from that. When they paid the heavy hitter Directors to come back, they also agreed that those directors did not need to give up their positions in their other MLMs.  The bottom line is that there is not enough money to be made in YTB to sustain most people.

But leave it to the TravelPro, who markets to the few remaining zealots in YTB who feel there is a future, to find Kajabi. Yes, Kajabi. If you have the stomach to watch the hour long video, you will see it is nothing more than a way to capture names and rope the unsuspecting in to being bombarded with get rich quick pitches in the hopes that they will buy.

But where the amusement comes in, is that TravelPro exclaims how affordable this program really is, "If your still here because you’re wondering if Kajabi is actually AFFORDABLE, (which it is) it’s free to try for two whole weeks. "

I guess affordable is different for everyone, but Kajabi can be yours for $99, $199, or $299 per month!  Now really, when you have people making less than $50 a year in income from an opportunity you claim can make them millionaires, do you really expect them to but a $99, $199, or $299 monthly product?

Now since it is designed for MLM, I am sure there is a heft commission to be made for each person who signs up, but what does $3600 a year actually buy? Somehow, I think the folks might prefer to take that $3600 and, oh I don't know--feed their family. Or if they are in business, maybe they can actually use it to invest in a travel product that (here comes a foreign concept to YTB) sells travel and helps the agent make a profit!

I wonder if Kajabi is some word in the Swahili language that means "gotcha sucker"?

Inquiring Minds

This question keeps coming up and there is NEVER an answer from one of the most influential men in travel.

For Your Amusement

This Is So Deceitful

The third annual Alle-Kiski Job Fair was recently held in rural Pittsburgh. Over 600 people attended hoping to land a job.

Who was there? None other than YTB/ZamZuu looking to get more recruits. Yes, instead of getting or offering a job, YTB/ZamZuu was there hoping to get into the wallets of the jobless with their typical false promises.

Yes, invest thousands with us and you can earn less than a hundred dollars!

I wonder if they sleep well at night!

Triple Crown Bonus Update

Remember the Triple Crown Bonus? No? It was in the Back Office and went into effect January 1, 2009, every Rep new or old, qualified for a fresh start.

According to the bonus plan, it had milestone bonuses at 12, 24 and 36 months of $100k, $250k, and $500k cash bonuses, (a total of $850,000) for recruiting tiers.

According to the start date of January 1, 2009 it should be in effect thru January 2012. The fine print stated that the bonus program could be discontinued at any time, but it is guaranteed for all those recruiting during the promotion. Did anyone get a notice that it was discontinued? Other than it just disappearing from your YTB controlled Back Office?

Maybe there are a few people still in the program that have not been paid under the program. It might be worth an inquiry to the Home Office (they are tucked away behind the tire balancing machine at the Kia dealership). I mean YTB is the company of "if it ain't right don't do it and if it ain't right don't say it."

And with the seemingly new popularity of ZamZuu, the recruiting is picking up so there is likely a lot of money being left on the table.

Smoke & Mirrors & Naivete

What is more amusing, the sheer amount of smoke and mirrors that YTB uses to operate their business, or the naivete of the people roped into the scheme to take their word as gospel?

This person has a legitimate gripe. When you send someone to your site to sign up, you have a custom URL ending in a name of your choosing. In this case it is probably   www.xxxxx.com/sheilatillman  or something.   This is how any sales that are made are credited to the proper person and how the Rep/IBO/Broker/ or whatever gets credit and commission.  But, by default, there is a check box that says (in this case) No, Sheila Tillman did not refer me. And that is checked.  The visitor must find the box and change the check mark from "no" to "yes" in order for Sheila Tillman to get credit.

Sheila only wants to make it easier for the people she sends to her website and it makes perfect sense.

But Coach has an answer for her.  What if someone typed in "www.xxxx.com/shelatilman  or something close? Then that person would get the credit. Possibly a legitimate answer, but that also requires someone else having a valid website with a name very similar. What are the chances?

In reality, if the default box is not changed, the sales and credit are likely assigned to a house account (or perhaps one of the returning directors who were paid so handsomely to do so) and poor Sheila Tillman gets no credit.

This is the old agree by default trick which is frowned upon by most every legitimate company that markets on the Internet--unless you specifically un-check this little box, you are agreeing to whatever we want.

But Sheila, being the good disciple that she is, just sends in her monthly check to Coach and says "thank you."

No Agent Rates For YTB With Princess

It seems that somewhere along the line, the "agents" at YTB were abusing an industry perk with Princess Cruises. According to this post on Kim Sorensen (one of the most influential men in travel)'s facebook page, YTB "travel agents" are not allowed to book reduced fare cruises.

What, the horror and the outrage, people are paying $49 a month to abuse the system and now it seems they can't.

80% Of YTB Was Empty Space (Just Like Their Promises)

According to Kia, as reported in The Telegraph, YTB Headquarters was 80% empty space! This begs the question, what type of business acumen takes out a mortgage they cannot afford to buy a building they do not use? Oh, that's right, the same one that buys a LearJet for $1.3 million only to sell it a few months later for a loss. And the question still remains, why did YTB have to pay $500K to get them to sign the lease? Was it a requirement from FH Partners? Where are they getting the money after they paid Steve Branch, TV Wilson, Camaron Corr, and Peter Jensen all that cash to come back and recruit?

We stumbled upon the building in Wood River and found that 80 percent of it wasn't being used

In a strange coincidence of numbers, 80% of the YTB Headquarters is unused and 80% of their business comes from recruiting and not selling or providing a product.

Well, if the comments are true, it seems that Zeiser Kia will fit right in with YTB--both seem to have a less than sterling reputation.

There is already a conversation started about this latest boondoggle here.

Here It Is- YTB/ZamZuu's Perfectly Muddy Compensation Plan

http://mlmfiles.com/ytb-good-home-based-business/If you thought YTB/ZamZuu created confusion before, just wait.  In a recent article on the MLMFiles.com site they explained the new compensation program and highlighted that it was exactly what got them in trouble in the first place.

They state:

Can you make money with the new Zam Zuu? That will depend on whether or not you have a market that hasn't heard about the company's many problems. But will you be selling a legitimate business opportunity? The answer seems to be "No," at least according to facts currently available.

And that is coming from a PRO MLM site. But never let it be said that YTB or ZamZuu wants anyone to understand their compensation program.  Here is the latest explanation (all 13 pages of it) just released last week courtesy of Arlyne Thompson--director in California.

As a former director told me in an email last week:

I am SO glad to not be part of this farce. Once you get away from it, you see things so much more clearly. I worked so hard to keep the team together from CA AG announcement right up to the start of ZamZuu. I still felt the travel franchise was coming and worth the effort. YTB has become a double-wide home with 12 additions - unbelievably ridiculous! They could not pay be enough money to come back.

As for the new compensation plan. Totally gone off the deep end. I thought explaining YTB 2.0 was a challenge!

 If you are interested in some of the other opinions on YTB/ZamZuu from MLMFiles.com, check out:
 

• YTB--Giving Network Marketing A Bad Name?
• YTB Zam Zuu Review
• Is YTB A Good Home Based Business?
• MLM Report -- YTB Zam Zuu

We Are Good!

You read it here first! Back in April 2010, we let our readers know that YTB was in talks with Zeiser Kia to sublet part of the headquarters building since they were having problems paying the note on it. Well, they did it! I wonder why they could not get any of the other car dealers that were backing YTB Cars to take the space? Or maybe even Penske--they had an exclusive program in the works there as well.

But like everything YTB does, they had to pay Zeiser $480,000 to do the deal. WOW!  So, YTB pays $500K to improve their own building. This somewhat indicates that the dealership was not capable of doing the renovations with their own resources.  And if they default, YTB get the area they just put $500K into back.  Boy, I hope the economy in Wood River is booming.

The difficulty on paying the note has been well documented and as we reported a few days ago, YTB was able to extend the payment till the end of November.  This development may be just what they need to have FH Partners extend the note a little more now that Zeiser is paying them $11,000 a month.

But the question remains, will YTB be able to make the payments due to all the directors they paid to come back and recruit? Will the new recruits buy the into the program hook line and sinker and pony up the cash for all the autoships and upgrades?

And of course, we wonder what the 3rd quarter financials will indicate.  I wonder what the chatter will be on the What Happened To YTB Travel? facebook page?

On September 29, 2010, YTB International, Inc. (the “ Company ”) executed a Commercial Lease Agreement (the “ Agreement ”) with Zeiser Motors, Inc. (“ Zeiser Motors ”) with respect to the Company’s headquarters located in Wood River, Illinois.  The initial term of the Agreement commences on January 1, 2011 and terminates December 31, 2015, with three options to renew, at Zeiser Motors’ option, the Agreement, each for an additional five-year period.  Under the Agreement, Zeiser Motors agrees to lease 20,000 square feet for monthly rental payments of $11,666.67, or $7.00 per square foot, for the purposes of conducting a new and used automobile sales and service business.  In addition, Zeiser Motors agrees to pay all real estate taxes assessed on the leased premises, to obtain and pay for all utilities on the leased premises, as well as to provide proof of fire and extended coverage insurance and liability insurance, including property damage and bodily and/or personal injury with appropriate minimum limits.

In connection with the execution of the Agreement, on September 28, 2010, the Company agreed to pay Zeiser Automotive Group, an affiliate of Zeiser Motors, Inc. (“ Zeiser Automotive ”), $480,000, representing a portion of the construction expenses for improvements made to the leased property.  Also on September 28, 2010, Zeiser Automotive executed a Promissory Note (the “ Note ”) in favor of the Company in the principal amount of $480,000.  The amount due under the Note bears interest at a rate of 6.0% annually and will be repaid with monthly installments of $9,279.79, beginning January 16, 2011, and on the 16th of each succeeding month thereafter, including the full balance of principal and interest thereon being due June 16, 2016.  The Note is secured by a lien on the improvements made to the Company’s property.

If any payment of principal or interest is not made in accordance with the Note, the Company must notify Zeiser Automotive that the Note will be in default if such payment is not made within ten days of such notice.  If default occurs, then at the Company’s election, the entire principal balance and any accrued interest shall become payable.  In the event of default the principal amount, and each installment thereof, shall bear interest as the rate of 10% annually after it becomes due whether by acceleration or otherwise.

Buy, Buy, Buy

This was taken at one of the Maryland recruiting meetings. Yes, you can buy the book and all the brochures you want.

YTB Delisted By DSA

Remember back in June 2009 when YTB was fined $1 million by California for operating an endless chain scheme?

We questioned the Direct Selling Association about this and the violation of their own Code of Ethics.  Their response (first reported here) was

The issues addressed in the judgment, injunction and accompanying statements made by California Attorney General Edmund Brown are serious in nature and require review by DSA with regard to possible violations of the DSA Code of Ethics.

Well it seems with little fanfare, YTB International has indeed been delisted by the Direct Selling Association. You can search for yourself here. Was this fact reported to all the RTAs and ZamZuukeepers who are currently paying monthly dues to the company? If you are in direct sales, doesn't it make sense to affiliate with the organization that leads the direct sales industry? Sort of like when you are in travel, you affiliate with the leading suppliers and organizations.

So, we have IATAN, Royal Caribbean Cruise Lines, Celebrity Cruise Lines, Azamara Cruises, Norwegian Cruise Lines, Perillo Tours, Qantas Vacations, and now the exalted DSA has all thrown YTB to the curb.

Does anyone remember back in 2007 when the Travel Pro was crowing about the DSA listing for YTB? Here it is if you need to be refreshed. My what a difference three years makes.

Oh, and while I was looking for the Travel Pro's DSA post, I came across this odd warning from Paradise Network.  I believe this was Ron Head's or Rick Rickett's side company.  Not sure the date or implications, but just some more food for thought.

Has YTB Been Skimming From Ther RTAs?

Do you remember when the Travel Weekly Power list comes out? Do you remember each year how I say that the numbers simply do not add up? I have said they are fudging the numbers somewhere to someone.

Based on a few comments I recently read on this Facebook page, I may have had an "aha moment".

The reasons why are many, some of which I posted in this FB Group, but the main reason is we were not paid commissions that we earned. Some were booked direc...t with vendors and commission claim forms were submited at the time of booking. We also had customers book directly on our booking engine and they never showed up in our Travel Portal as Recent or Pending Bookings. Had our customers not mentioned it casually we would have never known. We looked most unprofessional in the eyes of our customers, asking them to please produce confirmation numbers and copies of credit card transactions to prove it. Support tickets, emails and phone calls were many. We ended up spending as much and sometims more time on tracking and trying to collect commissions than earning them. We have no doubt we would win our commissions in court; it just is not worth the time and expense. We left money on the table when we terminated YTB, just to get out. What we do not know is how many others booked on our travel site that were not credited to us.

Now THIS makes perfect sense.  When you look at the income disclosures for the RTAs, add in the YTB percentage and then calculate the travel sold, it is considerably less than what YTB reports to Travel Weekly or in the notes section of their SEC filing.

But, if the numbers reported to the SEC and Travel Weekly were accurate, where did the balance go? Like the commenter on that page indicated, he actually caught them not reporting sales on his behalf--and subsequently the commission owed.

YTB's rules indicate that the clients' entered into the system by the RTAs actually belong to YTB. This was a huge red flag for me, but it seems they may be hanging their hat on that clause if they fail to recognize a sale or commission rightfully owed to an RTA.

Remember the pitch about making money while you sleep? It is quite possible. But it seems you might not ever know how much if YTB is manipulating the numbers.

Let's revisit 2009 numbers:

Commissions earned by Affiliates/RTAs/TAs per the Income Disclosure.  $7,111,591
Assume that YTB retained 30% of the commissions received. $3,138,409
Estimated total commissions received by YTB based on commissions paid to field. $10,250,000

Using a conservative 10% commission rate, this $10.25M would translate to $102,500,000 for the value of travel sold in 2009.

But, in the 10-K filed with the SEC, YTB reports that the value of travel sold was $252 Million and this corresponds to what they reported to Travel Weekly.

 So, if I were an RTA, I might be asking some questions. Like where did the $150 million of sales go? And more importantly, where did the commissions earned on those sales go?

The number is significant. Assuming the 10%, YTB should have earned $25,200,000 in commissions, yet only paid out on $102,500,000 of it.  That equates to $15,000,000 that appears to have been shorted to the field.  And based on the 98,198 people that were involved in travel with YTB that is an extra $152.75 per year.

Just some food for thought. Maybe some RTA in YTB will have the gumption to question the numbers rather than just accept what is fed to them. If there is one, please let me know the response and I will be sure to post it here as a clarification.

Hey Kim Sorensen...They REALLY Want To Know

The questions keep coming and the answers are never put forth. On Kim Sorensen's Facebook page, the RTAs are clammoring for information on a reinstatement with RCCL and IATA. And, they want to know about this rumored convention in March.  But once again, one of the most influential men in the world of travel can't provide an answer.

YTB And Bankruptcy

No, YTB (corporate) is not bankrupt--close but not quite yet, we will see more on November 30th when they have to pay (maybe) the loan on the K-Mart.

But I thought this was interesting. In the last 3 years there have been 33 people affiliated with YTB that have gone bankrupt. Now this is only people who have claimed YTB in their business name. We have no way of knowing the actual number.

But it breaks down like this:

18 from California
2 from Florida
4 from Texas
1 from Arkansas

1 from Missouri
1 from Ohio
1 from South Carolina
1 from Nevada
2 from Colorado
1 from Alaska
1 from Idaho

I wonder how many other travel companies can claim that number? Maybe Joystar or WorldVentures.  I wonder if this is a bragging point for the top of the pyramid people? I mean it certainly looks as if YTB was unable to provide the riches promised to these 33 people, but I am sure that the upline was well compensated.