KITCHENER, ON, Canada -- A group of disgruntled investors who say they were swindled in a bulk vending scam has filed a class-action lawsuit seeking damages of up to $20 million from the machine manufacturer and peanut supplier behind the venture.
According to the lawsuit, Revolution Food Technologies, a Canadian vending machine manufacturer, and Johnvince Foods Distribution, a Toronto-based bulk food supplier and exclusive distributor of Planters peanuts in Canada, entered into a partnership in September 2009 to promote a business opportunity to entrepreneurs to own and operate their own bulk vending businesses selling Planters peanuts.
The suit, filed in the Ontario Superior Court of Justice in Toronto, alleges that the company solicited investors to purchase up to 72 wall-mounted vending machines for $64,440 with the prospect of earning as much as $126,000 a year. The aspiring vendors were promised that professional locators would place the machines in high-earning sites, and that the number of machines in each area would be kept to a minimum.
The claim alleges that revenue fell short of projections and the defendants used high-pressure sales tactics to sign up distributors. It also contends that the biz-op promoters said the machines would dispense 4-oz. servings of peanuts, but they only dispensed 3-oz. portions. As a result, distributors were reportedly encouraged to buy more peanuts than they could sell, forcing them to discard large quantities.