Most all of you have read my tribute to Andy Cauthen. I’ve personally spoken with him and he’s adjusting to the drastic change from corn fields to cement and tall buildings. In my tribute, I mentioned that the only explanation critics would get was a Press Release to gnaw on that really won’t say much other than we’re sad to see Andy go, but wish him well in his future endeavors.

Something you need to understand about critics: they always have to be right. That’s why they have the last word – and they never let anything go.

My comment about critics only deserving a Press Release was actually perceived as a challenge by the ring leader of this group. Probably because they also have another obsession over trying to prove me wrong. Andy was in fact contacted during his last week of employment for an “interview” to answer some questions. Andy being Andy obviously agreed at first because he’s a professional and sincerely wanted our field to understand and look at his move in a positive light.

After careful thought and some time reading on this critics blog, it became apparent that any type of fair or balanced interview wasn’t likely by this individual. What he saw were half-truths, blatant misrepresentations, and some flat out lies about our company that made him extremely uncomfortable about his decision and interview. So Andy, very politely, and respectfully declined his interview with our head critic.

The word “No” isn’t a word critics like to hear. They’re like children, and “no” doesn’t actually mean “no” – it means go ask another parent. So our interviewer went on to another prospect at the home office for this “interview” about YTB.

Again, he was turned down. But this time he was told more truthfully that his past “reliable sources” for inside information have never been accurate and they [YTB] do not feel that their answers as written would be quoted completely or fairly…but rather changed to meet his own agenda. It was also decided that based on his trademark infringing and deliberately misleading “Zam Zuu” Facebook fan page (which by the way is finally gone thanks to Legal and a Cease and Desist) he could not be trusted to objectively report on any news or opinions about YTB in a fair and unbiased manner.

If that sounds harsh or stern, it is. I can’t tell you how many times something I’ve actually written here has been twisted to meet this individuals “agenda”. (After three years, I’d need more than my entire family’s fingers and toes to count.) The man is extremely gifted at taking words and comments and twisting them to mean something completely different.

So, since he can’t seem to find anyone to answer for him, he’ll do what he’s always done. Take all these rumors and beliefs, and publish them as questions as a public display of humiliation, and an “oh my, what’s wrong with YTB now?” While a handful of followers cheers him on thinking that nobody has answers concerning what they sadly believe as the truth.

Problem is, and I think you’ll clearly see this, these questions aren’t really questions. Better stated, they’re accusations that he’s asking the company to defend. That’s the critic’s way. Most of what you’ll see has no documentation or evidence to support the statements. Because its critics we’re dealing with, nobody needs supporting documentation.

Well, I’ll let you decide, because I got a copy of the questions.

For fun, I decided to answer as many as I could. Some as you’ll see couldn’t be answered because they don’t actually exist. Pay particular attention to the way each question is worded and you’ll quickly see why the home office thinks this guy is a joke. By the way; that’s how this should be consumed, with amusement, not anger or resentment. Part of our critics problem is that their anger consumes them and they can’t think logically or rationally. Seen it time and time again and it turns a complete fabrication into an emotional outburst that has no rhyme or reason.

So if you’re angry about this guy’s obsession over YTB, and his constant ridicule with every aspect of our company and our people, just move on to something else. This won’t help. If you understand like I do that this is nothing more than a fishing expedition and a desperate attempt for more drama to occupy his time and energy, by all means, read on!

Q: Over the last month, YTB has lost the CFO, the Master Distributor, the President and COO, and the SVP of Training and International Expansion. Is Bob Van Patten handling ALL of these tasks now?

I admire how much you think of Mr. VanPatten. From what I here, he is the single biggest reason you still have something to write about on your blog. He’s managed to keep YTB alive long after all of the critic’s predictions of impending doom. Bob VanPatten is the CEO of YTB International. As CEO he administrates, and puts the best people qualified in the positions needed. As you well know, the only position Mr. VanPatten has taken a close eye on is that of our former CFO. His background and experience dictates he is well suited for that position. (Not to mention our last two financial statements with him as CEO which have shown profits.)

In case you have not heard, Coach Tomer is our new Master Distributor. (I wrote about it here.) It’s a position he thrives in and is well suited for in my opinion. The field also gets to see much more of him now. I can’t think of a better “recruiter”.

Furthermore, as an outsider, I don’t expect you to know that the position of SVP of Training was furloughed several months back by the company. (We’ll address this “furlough” again for you a little further down.) The SVP position in question was vacant due to Mr. VanPatten making that choice, not the other way around.

Q: What has this done for the morale of the home office? The field?

For someone who trolls each and every Facebook page, blog, and forum that YTB has, you know exactly what it’s done. We adapt, we move on, and we move forward. We focus on things we can control and stay positive about. If you need proof here’s a thread from this past weekend I’m sure you saw. (It would make a great screen capture for your next blog post!)

Based on those comments, I’d say moral is mighty high right now, wouldn’t you? The same weekend Andy left too.

Q: YTB is continuing to lose about 100 RTA/TSO’s per day. What do you feel can be done to stop that?

Aside from getting a gag order prohibiting you and the handful of Zeolots from throwing mud and trash out there without any documentation or regard for the truth, I don’t know if there’s anything that can be done. I will say that much of your trash has been cleaned up thanks to the court system and because YTB is still around. People are starting to realize just how absurd some of your speculation and comments really are. As a result, it appears that a number of those “loses” are re-engaging in the company once again.

We call it F.E.A.R. which stands for False Evidence Appearing Real.

Q: I understand you are actively trying to sell the HQ building. What are the plans when it is sold? Where will YTB/Zam Zuu move? Certainly for a technology company, you don’t need that type of space. With Coach out of the Riverhouse now, are you planning to move to FL?

You understand? How do you “understand” without any documentation to support what you’re asking? Truth is, it’s nothing more than exploring some options.

So let’s turn this around and assume you’re right about the sale of the Home Office. My question for you would be – how will the sale of the home office advance your desire to see YTB killed off? A large influx of cash from this asset, along with the 56 acres the company also owns outright, would be a serious blow to someone like you who would like to see the company suffocate. It could be a real game changer. As you’ve said – as a technology company we don’t need this type of space and we could certainly use that “cash” to speed things up and moving in the right direction.

Think of it as “blog security”. ;-P

Q: By all measures, Zam Zuu seems like it was thrown together in a matter of days. Domains bought at the last minute for short durations. Lack of foresight in securing social networking URLS, etc. Do you feel Zam Zuu is in it for the long haul?

Read this article and then this article and note the dates they were published. Then help all of us undertand how you can measure that time span in “days”? I understand that a year consists of 365 “days”, but nobody uses “365 days” and “thrown together” in the same sentence without looking ridiculous.

You can also read this article and it will all come together for you very nicely. It should put to rest this absurd notion that the company didn’t think this through. And by the way, a company initially named “Cadabra” (as in “abracadabra”) was reluctantly changed at the last minute back in 1994. Do a little research on Amazon.com, and you’ll find what they did worked out just fine.

ZamZuu was a result of a years’ worth of testing, study, and a realization that we had another market shift. Kind of like travel was for us, and you saw what this company did with that. And regardless of any comments to the contrary, you did take notice. It scared the daylights out of you. You post and dribble about this company incessantly because of it.

Q: What sets Zam Zuu apart from any of the other online cash back “malls”? Even some of your stores are offering better cash back deals directly. IE: Last week, Best Buy had a 25% cash back program, while Zam Zuu was at 1.5%.

And just where is that 20% now?

Gone.

ZamZuu offers it’s Best Buy 1.5% all year long. (Sorry, that’s 365 “days” for you.) Furthermore, you’re assuming that by accessing BestBuy.com through our ZamZuu portal customers won’t have access to the special 20%? You’re assuming incorrectly if that’s the case. There is nothing that prohibits a ZamZuu customer from seeing or receiving that 20%.

Oh…and one other thing. I just checked my Best Buy e-mail folder, I can’t find this deal from them. Care to provide this “offer” just to keep things documented? Thanks!

Q: How do you explain to the field the incredible departure of directors and the change in the compensation plan? This plan was marketed as “copyrighted and on file with every Attorney General in the US and cannot ever be changed.” I think several departed directors might have a different opinion.

It’s no secret that YTB has assembled some of the best recruiters the industry has ever seen. They had a key role in YTB’s dramatic rise to the top and HUGE contributor to the insensate hammering by critics who fear recruiting and large sums of money like you. With the lawsuits, it became open season for other companies to recruit these leaders and bring them over to their teams. A huge feather in their cap snagging a YTB Director for sure. I can’t think of one Director who wasn’t bought off in some regard by money or position to make the switch.

While it’s sad to see some of these people go, I can’t blame them for taking some very attractive and lucrative offers. They’re tough to turn down when the offers grow in size and frequency.

Yes, the compensation plan has been increased and enhanced several times through my tenure with YTB. I would also speculate that you are correct that even the departed Directors would consider overrides on more products and higher commission splits on travel a plus. It’s never diminished in any form or fashion from the day I started.

Q: Can you comment or are you aware of the pending investigation by the Dept. of Justice?

Really? Which division? Antitrust? Civil Rights? Natural Resources? National Security? Or maybe Tax? Tell you what. When this “pending” turns into a “real” investigation and you have something more than just a rumor from one of your buds who heard it from another bud, we’ll discuss it then. For now, we’re limiting the questions and discussion to things that actually exist. Not some rumor or fantasy that gets you all excited and seething.

I know you’ve got finger and toes crossed that it’s true, but you also thought California was going to be your savior shutting YTB down, and look how that turned out.

Q: Are you finding it difficult to keep the momentum going? Since the settlement, the recruiting has been hemorrhaging.

Since the settlement, the hemorrhaging has actually stopped. You even wrote about it during the last quarterly report. Don’t revert back to something you admitted isn’t accurate. California was going to shut the company down, and when that didn’t happen people popped their heads out of their boom shelters and found that the scare you created was nothing more than a false alarm.

I’m happy to report that due to the launch of ZamZuu and the clarification from YTB Travel Network President Kim Sorensen, momentum isn’t a problem. By the time you find evidence of that in the quarterly reports, it may be too late for you to spin it another way however. (I certainly hope so.)

Q: Looking to the future (be that 5 days or 5 decades), how do you describe YTB? I know for years the focus has been on Travel and the mantra was “we’re a travel company”. I think that focus has changed. What kind of company will YTB be in the future?

Truth be told, you’ve never considered YTB a travel company, only a recruiting company. It doesn’t matter if it’s 5 days or 5 decades, your “thinking” is the only thing that won’t change in that regard. Nothing YTB ever does as a travel company is ever good enough for you. You’ve been harping about the Travel Weekly Power List for the last three years, but have never once even considered resolving your issue with them. Why not? What are you afraid of? Do you or don’t you want an answer?

Most likely, you don’t. Because it’s not about answers, it’s about questions. The more questions, the more chaos. The more chaos the more drama for you and your pals to stir up the pot.

Case in point, you were on the YTB Travel webcast last Sunday night and were given answers first hand from Kim. You heard about our plans and where we intend to be as a Host Agency. Do you expect us to answer any differently for you simply because of your inability to listen and actually learn like the rest of us?

Stop asking questions that you already have answers for. I know you don’t like the answers, but good grief, grow up and accept that we’re not going to change because you think we should. You’re not that important and there’s no amount of bitching that’s going to change that.

Q: Are you planning on hanging around?

Hanging isn’t word that resembles someone who is passionate and motivated. Too many people just “hang around” and that’s why we see the poor income disclosure statements that you like to slobber all over. So in that regard, no, I won’t hang around. I do however have a strong desire to continue to learn and grow with this company. I feel it’s an important aspect of success.

Q: With the cruise industry’s Wave Season in the beginning of the year; what was the rationale behind terminating 25% of YTB’s travel customer service people? I understand the economy and scaling back, but for a “travel company” to cut back on the travel staff just as the economy is picking up did not make sense to me.

Can you document for us which department was actually terminated? You found out the SVP of Training for YTB’s RPM program was part of that “termination”. RPM is not part of YTB’s travel customer service and neither were others I know at the home office.

You’ve got to do a better of collecting data and finding better sources. You’ve just proven you don’t actually know what department YTB decided to cut back on, so your question and accusation makes you look arrogant to some and foolish to others. (Not to worry, you still have a handful of faithful who like you, don’t care about facts, they just like to be part of the insults and slander.)

Q; How many RTAs/TSOs do you currently have? How many new Zam Zuu sites have been sold since the launch?

This qualifies as “insider information” and is not something a public company will disclose to anyone outside of the SEC filings.

Q; Do you have any comment on the income disclosures? Both the Marketing and Travel ones are showing that it costs more to be involved with each successive year, yet the average income declines each year as well.

I’m very happy to report that due to YTB Travel Networks commitment to training and upgrades, our new Travel Agent incomes have actually increased to a level that now exceeds the monthly service charges and fees as an average group. We owe much of that to the industry which help resolve and works with the industry instead of tearing it down. And we actually listen and then respond appropriately to the concerns and questions that the industry has. (Imagine that!) It’s especially gratifying to see this type of growth through a turbulent and difficult year that saw prices drastically reduced – thus cutting all of our commission by a substantial amount.

If you would like to compare 2008 numbers to 2009, you are welcome to do so. 2009 was a very trying and difficult year that saw many companies crumble and tens of thousands of jobs lost. To pin our decrease on our business model is narrow minded and one sided.

Word has it, and I’m certainly showing that 2010 could be a real game changer in that regard thanks to the hard work and enhancements now in place courtesy of the Home Office at YTB.

###

So there you go. I hope you enjoyed reading this as much as I enjoyed writing it. It’s been a long time since I had an opportunity to actually tear into somebody like this. (And after such a nice post like Wednesday…what a shame.)

I suspect there will be more pointed questions concerning my answers around the various blogs and forums. A lot of “Yeah butts” and “What about this” type stuff in an attempt to keep me engaged. Let me state for the record that I don’t expect them to consider my answers acceptable. Thing is, I didn’t answer the questions for them; I did it for those who comprehend and read accurately and correctly.

Like I said, it’s not about answers. It’s about drama, rumors, and doubt that these questions are asked. Most as you’ve seen had already been answered – several times.

I’m also sorry about the long post – but I wanted to get it over an done with in one shot. I get calls and e-mails all the time about his behavior and his accusations and there’s just not enough time to pick up after this guy. So I just let it go and you should too, especially after seeing how wrong he actually is.

Onward and upward on Monday and looking forward to getting back to our regularly scheduled programming.

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In case your wondering…no you didn’t miss some secret National Convention – Funshine – or some special Birthday Bash this week with YTB. With all the news in the past week, you’d think that there should have been something to get everyone together to celebrate what’s been going on.

Think about it…last Friday we release the new Group Cruise Page with Convergentware and posted a 10Q profit. Tuesday, the company hosted another Carnival Sail-a-thon and tied the Facebook phenomenon into the mix for a very cool and creative way to promote the best vacation money could buy.

Then yesterday, the company rolled out a wish list if you will. A small group of enhancements and improvements that those of us out in the field wanted to see to streamline prospecting and provide information in various departments and topics.

To end the week long list of promotions, enhancements and upgrades we come back to a topic that has been on the mind of many for quite some time.

It’s been over a year now since we first heard about YTB contemplating a franchise model. Soon after, California slapped a $25 million lawsuit with claims of some “gigantic pyramid scheme” in with it the day before the 2008 National Convention. I’ve heard rumor that the franchise announcement was nothing more than a “ploy” to stop the impending litigation which also produced a stance from the same clowns that it would never happen. By the time a settlement was reached (something else clowns never said would happen.) the court documentation that came out verified that a franchise model was required in California because in their eyes YTB was operating an on-line travel agency franchise without registering as one.

“Defendants have operated an on-line travel agency franchise without having registered as a franchise with the California Department of Corporations, in violation of California Corporations Code Section 31005 et seq.;”

By the way, I have no knowledge of any other company ever being accused of being both a pyramid scheme AND franchise at the same time – but leave it to California to be the first to do something like this. ;-P

So, we’ve been hearing about YTB implementing a franchise model for quite some time, and for months the home office has been preparing documents, manuals, and registrations for this new development.

Today, it’s time to take one more step towards making franchise a reality.

Starting today, November 13, 2009, there will be a link to a franchise seller disclosure form in your Rep Back Office. All Reps have to do is log in, answer a few questions, and submit the form. Once YTB officially implements franchise next year, (a little more that a month and a half away) we will be ahead of the game. (And yes, I intend on registering.)

The link will only be active for a limited time. And, you won’t want to miss out on your opportunity to be one of the first to officially register as a franchise seller with YTB.

PLEASE NOTE: All Canadian Reps who might sell a franchise in the United States should fill out this form in their Back Office. Once YTB implements the franchise model in the United States, only registered franchise sellers will be able to market the YTB Affiliate opportunity.

One last clarification – you’ll only be able to register for this document from the YTB Marketing side of the business. You will not find it from the Travel Portal. Remember Reps sell Internet Business Centers – and Travel Agents sell travel. They are two separate opportunities and models.

Wait – you already knew that didn’t you? Sorry – as you were.

Actually – log into you back office and get yourself registered…

Nice job, once again YTB! Thanks for all the info and opportunity to show folks that you’re not only still around, but have plans to be around for a long – long time. It’s been an awesome week.

Got to run…there’s a newsletter to produce with a ton of new content.

C-ya!

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Do You ZamZuu?

I have to admit, since the Convention, there really hasn’t been much in the way of news about YTB to report. The vast majority of what was released has been implemented and underway for the last month and half. We’re simply riding the wave of momentum coming out of the convention. Of course we have Funshine Travel Trade Show down in Orlando next week which will produce new upgrades and enhancements like we experienced at the Convention. In other words, don’t worry. We’ll be reporting the events at Funshine just like we did at Convention both here and in our Newsletter. (So if you’re involved in YTB, you’ll want to make sure you’re on our mailing list.)

Like last year and the Convention, Funshine was merely a pipe dream that would never happen according to the obnoxious and outspoken critics who were absolutely certain Coach, Scott, and Kim would be long gone at this point in time. The hope was they would be “pilfering” some other industry and the critics who detest our business model would be able to go back to “business as usual”.

Unfortunately, critics appear to be stuck in a quandary with the lack of news and have resorted to more lies and deceptive statements. The activity provides people like me an opportunity to show just how desperate and angry they’ve become since things aren’t working out they way they planned. They should be desperate. Most were absolutely certain that the California lawsuit filed just a day before the 2008 Convention would fulfill their desire of complete and total elimination of YTB. Unfortunately, not even Attorney Generals have the luxury of shutting someone down with false and misleading statements about “paying for the opportunity to recruit others into a gigantic pyramid scheme” without providing the proper proof and documentation to the courts.

Think “Amended Class Action” here. Much like that blunder, where critics made all kinds of outrageous claims, and followers waiting in the wings cheered how “powerful” it was, instead came out the other side battered and severely bruised for redundant, immaterial, impertinent, or scandalous claims. While the Judicial System’s desires in California were not quite as public (exposed on the internet) the process did demand that California and YTB work out their differences (in the case of the Attorney General – illusions) and come to an agreement. Like the class action that was filed in Illinois, California courts didn’t want their time wasted either.

In the end, California got what they wanted – $875,000 in their pockets. Critics got what they wanted – a press release with claims that YTB’s pyramid has been shut down. And YTB certainly got what it wanted – a blue print in the form of settlement agreement and the ability to continue doing business in the state of California.

Because the hopes and dreams of YTB being long gone is nothing more than a pipe dream at this point for our critics, when all else fails, you simply make things up to keep up appearances that something dastardly is afoot. Which of course leaves me a great opportunity to link and document the blunders. While some get angry and bitter over the false and misleading claims made against our company, I’d advise you to take some of the following list and put it in the proper perspective.

They really don’t have much else left to do.

So let’s begin.

Over on Scam.com, we find another “no name” who came up with the brilliant idea of posting a picture from Google Earth of the YTB home office parking lot in an attempt to show how few people are actually working there now.

Small problem…check out the date posted at the bottom of the picture. February 2004, two years before YTB even moved into the current home office location. (Ouch!)

Another critic decided to hang out on Coach’s Facebook page and magically turned “They are running a SPECIAL.” into “I’m running a SPECIAL.” (meaning Coach and YTB) promoting a 90% discount on Restaurants.com.

Apparently because Coach didn’t put and asterisk (*) next to the words “the promo code is “ninety” somehow that turns it into a false claim. I guess we learn something new every day huh? So remember the asterisk when sending someone to another store through shopYTB will ya! Otherwise any promotion or special that run from these 600 stores will firmly land on YTB’s head as false and misleading.

In another strange and bizarre twist, apparently people who double opt in to our “Steals and Deals” e-mail campaign have an issue with being offered free trips. How someone doesn’t understand that clicking the link to verify that “Yes, I want to subscribe” from the very e-mail account that requested it escapes some people blows my mind. But under the circumstances, it gives them something they can complain about. Besides, I can see how a free cruise would offend some people. (??)

Truth be told here, it was the best excuse this critic could come up with after taking bets that he would get a “recruiting pitch” for signing up for shopYTB. Here’s the quote from the day before.

John said…
Rod– send me the URL in an email and I will sign up. I want to see if I do get recruiting messages….anyone want to take bets?

If you’re wondering how shopYTB and YTB Marketing got thrown into the mix, it’s all a part of mixing everything together so they can report it to California as a violation of YTB’s settlement agreement. Not to worry however. YTB can provide a date/time stamp, and the IP address from the account that opted in from the initial request.

Also…how on earth do you lose and e-mail address from the day before so you can claim you can no longer contact the TSO with questions?

Very odd.

When you run out of things to complain about YTB, you can always fall back on the name calling and slandering of it’s members. That’s always a lot of fun and given enough time and energy you can go back months to find a single article on the Examiner so you can file an abuse report. Management and I however had a good laugh at this idiot for not checking the dates and trying to pin me with a plagiarized article.

Wonder if it’s okay with him if someone else copies my original work on the Mexico reopening on May 31st if they wait to the very next day?

Honestly, I find it amusing that some think I’m a deadbeat writer while others apparently like it enough to re post my work, and journalists quote that I’m “one of YTB’s most articulate defenders“.

And being the doting parents that critics are, with this illusion they need to keep me in line, they take our new YTB Success System launched at Convention and turn it into another claim that I’m doing something underhanded.

While they most certainly read about the announcements posted here regarding the new partnership with Pinnacle Systems unfortunately they got distracted with a Tina Turner appearance. Not only did they take exception to a missing “r” in the name, but of course had to ask why I felt the need to comment about her famous legs. Completely irrelevant to the upgrades and announcements I know, but when your a critic and need to find fault, that’s about all your left with. It also provides a great excuse as to why they can lay claim “I didn’t know”.

Through it all folks. Don’t think for a second that you or anyone else will be able to enlighten these poor lost souls who have nothing better to do than conjure up examples like these. I know it looks really bizarre, but they claim to be quit content in their activities and illusions. To correct and educate will not only prove futile, but the backlash of name calling and pestering would certainly tell you that they have absolutely no intent to change their thinking or perception – regardless how stupid it makes them look.

But it certainly makes for a great post and a good laugh when you add it all up.

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Direct Sales date back thousands of years with roots in Egypt, Syria, Babylonia and India. Traders, merchants and caravans are examples of the early direct seller who formed this ancient tradition and basic need to exchange goods. Fast forward to a century ago here in the U.S. and you’ll find the birth of The Direct Selling Association (DSA) who will celebrate it 100th birthday next year. As a fan of Direct Sales, I wrote an article about one of the oldest Direct Sales Companies still in existence today. Founded in 1886, they’re a real powerhouse today – producing $10.7 BILLION in annual sales. Never heard of The California Perfume Company? They changed their name to Avon in 1939.

With all the economic news that this country has had to endure over the last year, it’s refreshing to see one business model that’s not only surviving, but thriving in these tough economic times.

Direct Selling News just released a comprehensive list of the the worlds top direct selling companies with wholesale revenue of $100 million or more. On the list we find some very old and prominent companies such as Avon, Mary Kay, Primerica Financial Services, Herbalife, Tupperware, Nu Skin, Shaklee, ACN, Pre-Paid Legal, Market America, Keller Williams, Pampered Chef, Southern Living At Home, and oh…lookie here…YTB International.

If you’ve never heard of this list before – well, it’s never been out before. Think Travel Weekly Power List here, but for the Direct Sales Industry. For the first time, Direct Selling News decided to come up with a list of it’s own for the Direct Sales Industry. I realize that for some, Direct Sales doesn’t amount to much, (in fact, it’s despised by some who just plaster the word “pyramid” on what ever they like) but when you look at these sales by the numbers, and compare them with some of the dates these companies were founded, you have to admit it’s pretty impressive list of “Networkers” who some claim will eventually run out of people.

The purpose of the list in Direct Selling News was to “journal the might of the direct selling industry”. In the report, YTB International ranked #46 overall with $162.5 million in sales. Not too shabby for a company that’s been a very heated topic in the travel industry, had it’s share of legal battles and has been a daily rant for a select few with a false and limiting belief that Direct Sales is a sham. While YTB’s numbers are fairly straight forward, reporting it’s numbers to the SEC as a publicly traded company, like the travel industry, very few Direct Sales companies do the same.

Like Travel Weekly, Direct Selling News made every effort to verify sales in this industry with checks and balances via sources like Hoover’s Company Records and Dun & Bradstreet, SGA Executive Tracker Companies, Standard & Poor’s Descriptions Plus News, Company Briefs–Gale Group, Global Duns Market Identifiers, Market Guide Company Profiles, America’s Corporate Finance Directory and Directory of Corporate Affiliations.

According to Direct Selling News, one thing became clear during their research: A number of Direct Sales companies are still growing despite the economy and despite all the misrepresentations and myths surrounding the industry.

“Almost miraculously, our organization has continued to grow,” says Joe Urso, Aerus Chairman and CEO. “Selling high-end products is not easy, especially in a down economy. Our team has continued to grow by inspiring others to pursue the opportunity for a better life that we offer.”

The report also states that USANA recorded its sixth consecutive year of record sales, Pampered Chef had a 5 percent increase in recruiting and Tastefully Simple product sales bumped up 5 percent. And like YTB’s Founders are telling their field or TSO’s and Website Sellers right now, Executives from other companies are telling people that despite the economy, their companies are not only larger in regard to revenue, but are coming out of this recession better than ever.

From the report.

And many direct selling executives tell us they believe the industry will emerge from the recession bigger, faster and stronger. “Over the course of the next few years,” says USANA President Fred Cooper, “we anticipate USANA—and the network marketing industry in general—to continue to show patterns of growth.”

Emerging bigger, faster and stronger has special meaning for those of us in YTB. The company wasn’t fighting just the recession and the poor economy. Just over a year ago YTB was in another club, sued for $100 million by a bunch of ambulance chasers who wanted a quick buck. A year later, the class action thrown out for being redundant, immaterial, impertinent, and scandalous, YTB is prominently placed in a $100 million club for actual sales with another prestigious group of peers.

My how things have changed for YTB as the debate over pyramid crumbles and legitimate rises from the ashes.

Congratulations to all 65 members of this list. You’re the cream of the crop in the Direct Sales Industry who have collectively produced billions of dollars in revenue – one person – one sale – one day at a time.

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A four year old class action lawsuit looks as if it will finally close pending court approval in December to the tune of $123.4 million to be paid by Expedia, and another $5.5 million to be paid by Hotwire. The suit filed back in 2005 came to a head back in June when a Superior Court ruled that Expedia collected a total of $184.4 million in service fees which the company pocketed as “pure profit” from consumers who purchased hotel stays and other travel packages between 2003 and 2006. The judgment is currently the largest award in Washington state history for a consumer class action.

When the ruling was handed down back in June, Expedia was quoted that it would “vigorously pursue our rights on appeal“, but changed it’s mind due to the high cost of the litigation and the additional time it would take to appeal. Instead, Expedia was able to deny any wrongdoing in the settlement, and has set aside $19 million for the class action settlement, a low end estimate of the cost associated with the settlement.

The class action case was based on unfair business practices and breach of contract in the way the online travel company paid taxes. Not only did Expedia bundled the service-fee charges with taxes into a single line item, but collected taxes based a higher retail price, when they paid wholesale, thus pocketing the difference.

Expedia’s second quarter profit fell to $41 million, down from $96 million a year ago – a 57% drop.

Although we don’t see much about the hotel tax issue at all on message boards and blogs due to over aggressive concerns concerning Travel MLM’s being “flawed”, the battle over traditional online travel companies has been a heated debate in courts all across the continent.

In June, a Los Angeles Superior Court ruled that Expedia and Hotwire had to pay $35.6 million to the city of San Francisco. A Georgia Supreme Court has also required Expedia to pay the city of Columbus, Ga. a 7% tax on the retail rate of hotel rooms, which forced Expedia and other online agencies to cease doing business completely in the city. New York adopted a new hotel-occupancy tax ordinance requiring that OTA’s remit taxes to hotels based on the net rate, then pay the city an additional taxes for service fees or margins. Also in Canada, an Ontario Superior Court is seeking $47.5 million in damages for violating Canada’s Competition Act and Consumer Protection Act for disguising taxes and service fees.

In all, some 46 city and county taxing districts have filed lawsuits due to this issue.

But what will critics in the travel industry be talking about today? An overly aggressive and unfounded theory about how YTB will run out of people to recruit in some “pay to play” pyramid scheme suit up in Illinois. (An issue that has already been thrown out in a District Court there for being redundant, immaterial, impertinent, and scandalous.)

For those that desire to reside in reality, or have been “taken” by the concealment of service fees by Expedia over the years now have several options according to the Expedia Litigation Settlement Website.

1. Tell them you want a cash settlement (Send me a check)
2. Tell them you would like a credit (To be used on a future Expedia purchase)
3. Object to the settlement (It was all some big “misunderstanding” and it’s YTB’s fault.)
4. Opt out (You don’t care to receive cash or credit now due.)

Here’s what you need to be considered and qualify as part of the settlement:

You need to have “made a “standalone” hotel reservation through Expedia between January 10, 2001 and June 11, 2008 and paid a bundled “Tax Recovery Charge” and “Service Fee” in connection with that booking…

and/or

…you made any hotel reservation (either “standalone,” or as part of a “package” including airfare and/or car rental) through Expedia between February 18, 2003 and December 11, 2006 and paid a “Tax Recovery Charge” and “Service Fee” charge in connection with that booking”

A Final Approval hearing will be held on December 1, 2009, at 10:00 a.m. to determine if the proposed Settlement is fair, reasonable and adequate – whether the Named Plaintiffs will receive incentive awards in an amount not to exceed $7,500 each – decide if counsel should receive an award of attorneys’ fees and costs – or Order of Final Judgment and Dismissal should be entered.

While the final chapter certainly hasn’t closed on the subject of unfair and deceptive trade practices, it is however apparent at this point that many have taken issue and given notice over the Expedia issue. We’ll see what comes in the future for YTB concerning the claims surrounding YTB and this nonsense about misleading and deceiving people. While it has returned $125K to consumers in California, it’s a small pittance compared to the $129 MILLION settlement with Expedia.

But as we’ve seen for the past few years, YTB is apparently a bigger threat and far more dominant in the minds of a select few who want to wallow in thier own illusions that YTB is the real problem in the travel industry.

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According to YTB’s 10Q filing with the SEC, the office of the Illinois Attorney General has agreed to extend the date by which YTB must respond the Illinois complaint to this Wednesday, August 26, 2009. If you’re not aware, or forgotten due to last months Convention and the improvements YTB is currently enjoying we wanted to prepare you that another chapter is about to revealed for discussion of both pro and con on blogs, forums and message boards all over the internet. (We are talking about YTB after all!)

Before the ink was able to dry on the California Settlement on May 14th, Lisa Madigan, the Illinois Attorney General, filed their civil complaint against YTB and the Founders the same day. Many of the claims and allegations were a mirror image of what was found in the California complaint. Although Illinois had opened an ongoing “investigation” that started just days after the California complaint filed last August, 2008, Illinois apparently chose a “wait and see” attitude. (Possibly in the hope that California would be successful in shutting YTB down.)

YTB management obviously can’t discuss legal matters publicly or with the field. However the two words we hear over and over from the Founders and Executives is “very optimistic”. We would agree with this optimism based on the successful settlement agreement in California, and the Illinois class action that has already been thrown out. The allegations brought against the company are based in fear, myths, and deception and one needs to keep in mind that the foundation of court rulings and decisions are based on fact and documented law.

We’re not going to bore you, (or for that matter insult or taint your intelligence) with the gross misrepresentations and allegations made against YTB. Other than claims that YTB continues to promote Royal Caribbean, NCL and IATA as a benefit of joining – the premise of the entire complaint is based on the belief that one must to “pay to play” for the opportunity to recruit others into the YTB business. (The “gigantic pyramid scheme” mantra.)

We possibly need to elaborate for you, like YTB will this week with the courts that the YTB model, as it has always been from day one, does not require payment for the opportunity to recruit others. Nor does YTB “pay” someone simply to recruit.

The $449.95 provides a travel website and $49.95 a month provides the continued maintenance of a travel website in order to sell travel. (Travel sales generated from these travel websites were documented at $424 million in 2008) Payments to the field as either an Associate or Website Seller (Rep) are dependent on the travel site (or product) being sold and maintained. Most Host Agencies such as Uniglobe, Travel Planners International, Nexion, MTravel, Expedia Cruise ShipCenters, and Dugan’s Travels are also dependent on the sale of sites being sold to others (in order to therefore generate travel sales) and all charge a startup fee and monthly maintenance fee for website hosting and maintenance of a booking engine, support, training, licensing, and/or E&O insurance for their product or service.

As we’ve found so many times before, all the focus and attention is pinned directly on the Network Marketing aspect of the company while all rules, customs, and normal business practices are thrown out the window. Instead of YTB keeping the money generated from payments of $449.95 and $49.95 a month as other hosts do, YTB pays field representatives for sales they produce and maintain in their own organization. Limiting beliefs are compounded by critics, Attorney Generals, and former Reps who failed, based on the fear that everyone does not have the same opportunity to generate income in this fashion. There are additional phobias based on the MLM model running out of prospects, instead of realizing that it takes personal responsibility, action and effort to build an organization. To compound the emotion of these fears and phobias, the model in some cases does generate millions of dollars of income for common everyday individuals who go to work, promote and build a business of other websites under them. (As documented in both the 2007 and 2008 Rep Income Disclosure Statements.)

The cost for such an opportunity? Not a single penny.

Avon, Mary Kay, PrePaid Legal, NuSkin, EcoQuest, Amway, Primerica, Fuller Brush, and HerbaLife have all built their business via the Network Marketing and Direct Sales model for multiple decades, generating billions, no…TRILLIONS in income. However, fears concerning the window of opportunity for YTB will soon end for someone at the bottom of the pyramid. Because of this unfounded and undocumented belief, there are those who feel its up to them to step in and protect others from something that has never – EVER happened.

Is there any question that YTB believes it has meritorious defenses to the claims and intends to vigorously defend its case based on fact, not perception?

Regardless of your keen understanding and intelligence to see YTB for what it truly is, YTB should be able to successfully defend the misrepresentation and limiting beliefs made in the complaint filed by the Illinois Attorney General. Unlike the many blogs, forums, and bizarre emotional outbursts we see concerning the YTB company, it’s Founders, and the people involved, on the internet – the legal system instead must favor on the side of actual documentation and facts, not perception.

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YTB’s Quarterly financial report came out on Friday. During this years Convention, Scott Tomer announced a Q2 profit on earnings before income taxes. He was correct, as YTB did post a $1.2 million net income from continuing operations. What he may or may not have known until after the Convention however was a $2.6 million in contract termination costs for the disposal of REZconnect, which resulted in a “discontinued operations” line item resulting in a loss of $2.8 million total dropping the $1.2 million profit into a $1.5 million loss overall for the quarter. The current portion of the $2.6 million liability balance is $608,000 and is required to be shown in our SEC filing based on future commitments.

REZconnect has been somewhat of a sore spot in years past. Micheal Brent had been selling off shares like it was candy. Rumors surrounding the subsidiary also pointed to a net loss in revenue for the entire company for years. This was the first time the subsidiary had been broken out to show it’s contribution. REZconnect operations reported net revenues of $869,000 and a loss from operations of $463,000. The Board of Directors made a strategic decision about the REZconnect business model, which they stated was serving primarily brick and mortar travel agencies, and felt it was not compatible with YTB’s current and future plans.

“As a result, the Company expects to realize cash savings of $2.4 million over the next 5.5 years based upon the cash payments to be made under the employment severance agreement versus the cash payments that would have been required under the original employment contracts.  Thus, while the Company has recognized significant expenses in the current period, the cash savings in the coming 5.5 years will serve to contribute a significant savings in terms of liquidity, helping to strengthen the Company’s position.”

In this current economic climate companies need to cut dead wood. While I have not seen, nor do I really care to see what others will be saying about YTB’s financial condition, I’m willing to bet you that they’ll be pointing to the huge loss in revenue over the last year do to the pyramid crumbling. While they will most certainly be pointing YTB’s “business model” as the cause of the loss in revenue, you should take a look at other company revenues to compare what they’re doing in this current economic climate. Royal Caribbean’s revenue (and profit margins) have declined significantly, resulting from large profits plummeting to significant losses over the last four quarters.

People are not spending in this current economic climate. Period.

It should be noted that the hemorrhaging of our RTA’s has slowed significantly in part due to the California settlement. While there was an enormous amount of speculation over California winning it’s argument of a gigantic pyramid scheme and successfully shutting the company down, the truth (as always) finally came to light. In addition, the “ungainly monster of 39 pages and 133 paragraphs” that was submitted as a class action law suit was also thrown out by the courts. Current RTA’s are just now starting to realize what I’ve known all along.

If you’d like to read my analysis of what our critics actually know about MLM and YTB in general, I invite you to read my e-book entitled “What the Critics Know About YTB“.

To further illustrate my point, I did take note of a couple of things in the notes section that critics were speculating (as they always do) about YTB’s financial condition and what the company would and would not be able to do.

Once Scott mentioned “profits from continued operations” our second payment for the California settlement was brought up. Some wondered if we happened to skip that payment in order to show profits. It should be pointed out that it was in fact paid and half of the settlement money is behind the company. Payment of $250,000 was paid as scheduled before the June 30 quarter ending.

In March, YTB’s credit card processor increased it’s reserve requirements, resulting in a $2.7 million balance to be held in reserve. While it was speculated that YTB would not be able to acquire the funds necessary to obtain the balance, that request was also achieved during this quarter. This too is now behind the company.

One of the funniest twists found in the financial statement that I doubt you will find anywhere but here is the saga of the proposed Conference Center that was envisioned by YTB to be built on land the company currently owns. Back in November, YTB sold a 9.9 acre out parcel of the 59 acres it owns to an undisclosed buyer. In late July, we found out through the media and the blogs that the buyer plans to build a Holiday Inn Express and a Country Kitchen gas station on the land that has been purchased. When news came out that the Wood River City Council voted to approve a funding agreement with Aventurs Development LLC. nobody bothered to check if the land in question had in fact been paid for.

“In addition to other consideration, the Company received a $500,000 promissory note dated November 24, 2008 as proceeds for the sale of land situated in Madison County, Illinois, which was non-interest bearing so long as there was no event of default thereunder.  Principal and other amounts under the note, collateralized by the related land sold, was due and payable on March 24, 2009.  On April 22, 2009, the Company sent a notice of default under the promissory note and mortgage to the purchaser because the purchaser failed to satisfy all obligations under the note within 120 days.  The notice required the purchaser to cure such non-payment within five business days of receipt of the notice, as required by the mortgage.  On May 6, 2009, the Company filed a complaint for foreclosure in Madison County, Illinois Circuit Court under the terms of the promissory note and mortgage because the purchaser failed to cure the non-payment within the required five business days.  On June 2, 2009, a notice of foreclosure was recorded against the land.”

Of course, like everything else that backfires on our critics for drawing conclusions based on what he reads and hears on the internet without checking actual facts, mums going to be the word on this. Instead, they’ll continue to focus on yours truly and the gross error I made when I didn’t check my source. As I’ve learned over the weekend, thanks to many comments, e-mails, and phone calls, it’s much better to surrender defeat in cases such as this in order to move on and get back on track.

Lastly, it should be noted that the company has made significant advances in curbing it’s spending and keeping an eye on the bottom line. Those of us who were at this years Convention saw evidence of that. With the current details listed in the notes section of the quarterly report just filed, we see more documentation of YTB doing what it needs to do in order to survive. Many of the hard choices made in prior months have proven to be significant, and while time will tell if the elimination of REZconnect will help YTB’s bottom line, the future looks to be significantly better than a single number found at the bottom our financial report.

A major key in YTB’s survival and prominence in the industry is educating those who may be looking for opportunities as the country starts to come out of the current economic condition. With YTB’s new tools and upgrades just announced at Convention, it may prove to be significant in showing the company’s strength instead of weakness.

PS - If you're involved with YTB, sign up for our FREE Newsletter. As a Website Owner or Website Seller, we'll keep you up to date with all the latest news, acquisitions, and developments with YTB.

PPS - Subscribe to the Just Picture It Now RSS feed, (including e-mail) for all the latest posts and updates found right here!

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