MLMs and Travel: A Bad Mix

More Info On The Fallout Between YTB and First Travel Alliance

2013-04-24T07:33:00.002-04:00

We have obtained an email sent by Jeff Scott, president of First Travel Alliance regarding the recent split from YTB.

As predicted more than a year ago, it appears to be the questionable business practices of YTB that has unraveled yet another deal. According to this email, First Travel Alliance received the commissions from vendors and passed them along to YTB who, in turn, re-directed the payments to key directors (recruiters), founders, and executives. This is textbok ponzi scheme--take money from the new entrants to pay off the liabilities of the older ones.

The email alludes that YTB changed the booking engine from FTA's to their latest Travelocity managed one without any type of notice to FTA and simply with an announcement to the RTAs.

Now it seems that FTA is looking to publicly set the record straight and is trying to retain or convert as many RTAs into their host program--a more traditional model. The email highlighted that YTB was charging the high fees which are unnecessary to sell travel via the FTA program.

Jeff Scott is currently out of the country, but we have reached out to him for comment.

Hello Everyone

I wanted to keep the lines of communication open and be crystal clear as we move through this transition from YTB. First and foremost, I wanted to apologize to all of you that have had your business disrupted by this unfortunate turn of events and for the turmoil it may have caused in your lives. All of us at First Travel Alliance want your career in travel to be enjoyable, fun and financially rewarding. We know you don’t need this kind of aggravation.

We have heard, and you will continue to hear the untruths and inconsistencies from those leading the diversion away from the real issues. These strategies have been used many times over the years with several of the businesses YTB International has attempted but failed to do business with. We are not saying YTB itself has made these assertions, but we understand that some directors have made incorrect or untrue statements.

We need to clear the air on a couple of issues that have surfaced over the last two weeks. First and foremost, YTB, not First Travel Alliance, is delinquent in payments of commissions to RTA’s. YTB has apparently continued to divert funds that were scheduled to be paid to RTA to other members and to pay executive and founder salaries. This diversion of funds continued the non-current payment status they are in today.

Speaking of commissions, let’s talk about payment of commissions. For the last year you have been paid through YTB on travel booked through First Travel Alliance. YTB has been in control of the payments and when those payments were paid out. In fact, YTB has been paid over $4.0 million in revenue from vendors and revenue received by First Travel Alliance passed through to YTB for payments of commissions. Unfortunately, we do not know when, how much or to whom they have paid commissions. YTB has either retained or received payment for all commissions owed to you. We will continue to encourage YTB to pay you the commission money it has received from First Travel Alliance for commissions earned through March 31, 2013.Starting with commissions received from vendors on or after April 1, 2013, First Travel Alliance will pay commissions directly to First Travel Alliance agents for those commissions received from April 1, 2013 onward. The first direct commission payments will be made on May 25, 2013. First Travel Alliance is assuring those who have travel booked, but commission not yet received, that First Travel Alliance will pay those commission timely and in full. For example, if you currently have a group cruise booking that sails in September, First Travel Alliance will pay that commission to you directly the month after the commission is received from the vendor and you will no longer have YTB as the middle manIn addition, First Travel Alliance will not continue YTB’s prior policy of stretching commission payments over several months based on the date travel occurs, which YTB implemented years ago in an effort to catch up on commission payments (by delaying some of them). We will pay your commissions in the month after they are received.

As you may have noticed, YTB recently redirected your travel portals to a new booking engine, but rest assured that we are addressing that through the proper channels and expect to have that corrected promptly. While we expect to have a bump or two in the road because of YTB’s actions, we look forward to focusing exclusively on travel and continuing to provide you with the best travel products available.

Now let’s move to the more positive side of this note. We have and always will take great pride in our ethics and integrity in this industry. First Travel Alliance is strong and expanding rapidly with agents that are true sellers of travel. We are very interested and excited about the opportunity to continue to offer many of you the ability to sell travel through our company. We are not interested in you trying to sell non-travel products or recruiting for recruiting’s sake. We want only to help you sell as much travel as you would like while making money and enjoying the benefits that the travel experience brings.

First Travel Alliance is pleased to remind you that you can be a First Travel Alliance agent without paying any upfront fee or the $49.95 monthly fee. Why worry about “3 and Free” when you can be a First Travel Alliance agent for $19.95 per month and the first 3 months are free. That is -- not paying an upfront fee that goes to marketing and then a large monthly amount to pay down-lines. It is also not selling time share memberships and travel certificates that create the “SIZZLE” used previously and suggested time and time again by YTB.

For those who are interested in selling travel, let’s get going!!!

It is time to truly “HAVE FUN AND MAKE MONEY”

If you are currently an Independent Contractor/ Out Side Sales Agent, you have signed your agreement and you are currently booking under the First Travel Alliance CLIA and ARC numbers. We will be sending you additional information for building your profiles.
For those of you who have not signed up, we can get you set up quickly with a 3 step process.
Step 1. – Send an email to Registrations@FTA-Vacations.com requesting to become a First Travel Alliance Agent.
Step 2. - We will send you the Independent Contractor agreement.
Step 3. – Sign and return the agreement to the address on the email.
That is it…

Once approved, you can use the First Travel Alliance CLIA and ARC numbers when booking travel direct with all of our vendors. You will book as First Travel Alliance Agents and receive the commission rates that you have for the past year. Again, your commissions will be paid directly by First Travel Alliance, as explained above.
The First Travel Alliance executive team is proud that we have continued to provide our members the highest level of quality and the best vendors in the industry for you to completely support your clients.

Now, let’s everyone do what we do best *** HAVE FUN AND MAKE MONEY ***
If you have any questions or comments, we invite you to contact your First Travel Alliance support team at _314-830-4900_. We invite you to join us and look forward to answering any questions you may have. We also invite you to join the Friends of First Travel Alliance Facebook group.

YTB Rolls The Dice With DIP Loan

2013-04-17T14:46:00.001-04:00

In a SEC filing today, YTB advised that they have found a lender (Jamravel) willing to lend then $420,000 to cover operating expenses while they try to re-organize under bankruptcy.

The loan is secured by a"first priority security interest and lien on all of YTB’s assets." According to the latest valuation, YTB has a Market Cap of $969K. The loan must be repaid with 9% interest by June 14, 2013.

YTB is no stranger to short term loans with "loan shark" interest rates. They gambled and lost several times with that tactic.

It boggles the mind that YTB is creating so many millionaires and is such a great product, that they are in bankruptcy and cannot obtain competitive interest rates.

It is unknown if the lender, Jamravel, has any relation to YTB or any of the former executives or directors.

YTB Splits From First Travel Alliance, Will Issue Travel ID Cards Again

2013-04-04T12:36:00.000-04:00

There is never a shortage of surprises with YTB. In late 2011, they sold their assets to Sixth Scott dba First Travel Alliance with promises of getting back in the good graces of Royal Caribbean and the other vendors who refused to work with YTB due to their marketing tactics.

This morning, YTB announced that the 1+ year long deal with First Travel Alliance is no longer going forward and they are relying on Travelocity to handle what looks to be 100% of their fulfillment.

One can only speculate what happened to the deal, but a source close to the company said that there were several undisclosed liabilities and that yet another lawsuit against YTB would be forthcoming.

In the announcement this morning sent out by President and CEO Andy Cauthen, the bankrupt YTB announced that it was reverting back to the very marketing tactics that got them in trouble with the Attorneys Generals in California and Illinois--the issuance of a Travel Agent ID card.

Interestingly enough, Cauthen states that the "Home Office Team and the Founders" are dedicated to the new changes. The founders have all left the company. Kim Sorenson died a little more than a year ago, Lloyd "Coach" Tomer was forced to leave by the Board after the California and Illinois lawsuits, and most recently Scott Tomer resigned from the company. From the tone of the announcement, it seems like they may be re-entering the business.

YTB is currently operating in bankruptcy with more than $7 million of debt. They have not filed any SEC reports since the middle of 2011 and have issued a statement that the reports that were filed in 2011 are substantially inaccurate.

Below is the email sent out by Andy Cauthen:

YTB Plans and Horizons

"The best way to predict the future is to create it." ~ Abraham Lincoln

On March 1st -- just a month ago -- we announced that YTB filed for Chapter 11 reorganization. This proceeding will give YTB an opportunity to reorganize our business and direct our focus on new plans and horizons.

Our commitment is to the travel business. YTB has developed and marketed, and will continue to improve the best home-based business available anywhere -- an on-line travel business for independent RTAs. Over the years, the YTB Travel Network has sold over $2 billion in travel, and YTB was ranked for many years among the top 50 travel agencies in the nation.

Today we are bringing the travel business back into YTB’s house. The reorganization process we are going through allows us to reassess our business relationships. In the course of that analysis and after much consideration and planning, it has been decided to move away from the FTA affiliation and place all travel services, support, and vendor relationships back to YTB.

We view this change as a positive and very exciting move for YTB. It will not be without some adjustment as we go through website modifications, vendor relationships, and staffing.

There will be some patience required on your part, but it will be worth it. We thank you in advance.

Here TODAY:

Travelocity. We are in a great place with the World Choice Division of Travelocity. They will be providing our travel inventory for air, car rental, hotels, and travel packages. We are affiliated with Travelocity in Canada now, and they are now our travel partner for the US starting today. Their global business team will be in Las Vegas with us next week to make the announcement.

Upgrades to Travel Booking Engine. New logos, graphics and functionality.

We are Travel! Our primary focus is on travel and vendor relationships.

Technology and Communications. To serve you and your customers.

Business Cards. And... new YTB Travel business cards are available for you now in your Back Office with VistaPrint.

Coming SOON:

Training and Certification. Enhanced training and certification programs are in the works. CRTA was a huge success, and we are working to bring back a new and

improved version.

US and Canadian Travel Events. Funshine Travel Trade Shows.

Travel ID Card. We’ll be reintroducing an improved YTB Referring Travel Agent

Photo ID Card program.

YTB Travel Webcast. We will be focused on producing a monthly YTB Travel Webcast featuring specific vendors and booking engine content.

Customizing Your Website. We want you to have the opportunity to customize your website with your selection of colors, photo, phone number, as well as a giving you the opportunity have your booking engine focus on your favorite niche market.

Welcome Packet. To get you started on the right track we will begin planning a Welcome Packet similar to the YTB Tool Box. It will give you a “first things first” approach and be delivered to you electronically. It will include a travel sales cycle, training overview, overview of your YTB website, discussion of the world of travel, how to travel like a pro, and much more.

Our primary objective is to provide the most up-to-date,

relevant, competitive and profitable Internet-based travel

business to be found anywhere!

I would like to close by reiterating the excitement and confidence that we feel as we look toward YTB’s future.

Your entire Home Office Team and the Founders are dedicated to growing this travel business with you. We will emerge a stronger, more competitive company that is well positioned for enhanced opportunities.

Thank you for everything you do for YTB.

Andrew Cauthen

President & CEO

NOTE: Today at 10:00 AM (Central) your website will be undergoing maintenance for about 20 minutes or so.

YTB Files Bankruptcy

2013-03-03T11:01:00.003-05:00

The once-huge MLM travel company, YTB (also known as Your Travel Business and First Travel Alliance) has filed for bankruptcy citing assets of $1.3 million and liabilities exceeding $7 million according to a report in the St. Louis Post-Dispatch.

At one time, YTB boasted that they had nearly 50,000 "travel agents" and were positioned to be the largest travel agency in the world by 2010. However, lawsuits filed by the Attorneys General in California and Illinois alleging they were little more than a pyramid scheme began their slide into travel obscurity. Both lawsuits were settled and YTB was required to change the way they do business.

That change brought a new focus and they began to sell on-line malls, girdles, coffee, insurance, child protection software, photo frames and many other products while travel took a backseat.

The travel portion was eventually spun off and re-branded by Sixth Scott, Inc. dba as First Travel Alliance. With the spin off, promised were made that YTB would once again be able to sell the products of the travel suppliers who had blacklisted them many years ago for their questionable business practices.

Facts and documents clearly demonstrated that the travel sales amounted to little more than vacations purchased at a discount by their so-called agents. While the average "agent" paid more than $1000 a year to the company for a replicated website, their earnings were typically less than $600. However, the unrealistic promises of their charismatic leaders, Coach Tomer and his son Scott, kept people hooked. The golden ring was always theirs on the next spin of the carousel. The carrot was always dangling in front of them. Wealth and prosperity were just another monthly fee away.

In fact, there were several people who were early entrants into the program (most of whom have moved onto other MLMs) who made a lot of money. The bulk of any money (and all bonuses) were tied to the number of people you recruited and the number of people those recruits recruited, etc.

The initial entry to the program was several hundred dollars and $50 a month...plus options like a magazine, CD, attendance at recruiting events, conventions, etc.

YTB, a publicly traded company has not filed any of the legally required SEC reports since the 3rd quarter of 2011 and recently issued a statement that they believe their past filings were materially incorrect. Their stock continues to trade at a penny or less.

Another Mass Exodus From YTB

2013-01-16T08:34:00.000-05:00

As is typical with most MLMs, the core leaders will make their money off of the initial flurry of interest and then fly the coop. YTB went through this several years ago when Ron Head, PJ Jensen, and many more left when the recruiting levels dropped. Recruiting is the only way that people will make the promised money in a MLM. In YTB's case, travel was merely the enticement to get people to pay a joining fee and a monthly subscription.

But YTB, over the years has been able to re-invent itself and they have moved from travel to girdles, to online shopping malls, to coffee, to automobiles, to picture frames, and any number of "products" to entice people to sign up and pay the monthly fee.

Don Bradley Leaves YTB

We have learned that YTB has just lost three more senior level directors because they have lost faith in the company (and are no longer making the money promised). Don Bradley has resigned and moved onto (you guessed it) another MLM. Bradley was part of the 3 CEOs (Spencer Iverson, Don Bradley, and Floyd Williams) when YTB was riding high. They were an Atlanta based partnership who recruited thousands of people into the scheme. In 2009, the three partners decided to leave YTB for another MLM, MonaVie. However, Don Bradley was convinced (we have also heard that he was paid handsomely) to remain with YTB. He was promoted to the highest level of Director and lavished with all sorts of awards at the 2009 Convention. Now it seems he has left YTB behind and likely will be taking a portion of his substantial downline along with him.

Dave & Marliss Funk Leave YTB

Another powerhouse pair of YTB Directors have also left. Dave and Marliss Funk were also MVPs and Circle of Champion members and were responsible for the Dallas recruiting efforts. They have also departed for another venture. This is significant as they were two of the original directors in the company and also recruited thousands into the scheme.

Both the Funks and Bradley became staunch supporters of Coach Tomer and his scheme that consistently went downhill and never produced the results promised.

There was a time when YTB chartered a Carnival Cruise ship to celebrate the birthday of Coach Tomer. They ran contests for recruiting and the winners would get a free cruise and others could pay to come along and rub elbows with "greatness." That was 2007 and now here we are, 6 years later and what was billed as "Coach's Birthday Bash" has been downgraded to "Coach's Birthday Webcast" where the few remaining holdouts in YTB can pay to listen to Coach talk about how great YTB is and how the company is poised to explode!

YTB Admits Accounting Irregularity

While YTB still has not filed their 2011 annual report with the SEC (or any of the 2012 ones) that indicate their financial position, they did recently file a memo indicating that they have "discovered" accounting irregularities in the reports filed in 2011 and prior. Apparently they classified several non-owned assets as their own and artificially inflated their value to the tune of $7.9 million. According to the filing, they claim that the assets they claimed were indeed liabilities.

Bauknight, YTB's Cheerleader-In-Chief May Be Calling It Quits

2012-12-09T12:09:00.001-05:00

A consistent cheerleader for YTB for nearly six years, Doug Bauknight has alluded that he may be moving onto different ventures. While professing that YTB had consistently allowed him to earn a large income, he states in his newest newsletter that indeed he needed to look into another business--selling books; which he claims has grown significantly.

Now, it appears he will be moving onto a different opportunity in 2013. He says he will still maintain his booking engine with YTB, but will no longer be leading the charge of cheerleaders with his newsletter and blog.

While we still plan on keeping our booking engine up and running, and continue to sell travel for years to come, I've struggled with this decision since this summer over maintaining our YTB Blog and this Newsletter - Just Picture It Now.

While he does not come out and state that he is leaving YTB, he certainly alludes to it. You can read the full context of his newsletter here. I am not sure that his YTB booking engine will yield any measurable income. As we have demonstrated over the years, they tend to be more of a liability than an asset. The few that have made money in YTB did so by recruiting new members to participate in the Multi Level Marketing scheme. And the fewer still that made money in travel, did so by booking affinity groups. Of course, the main allure was the discounts which amounted to commissions earned on self-sold travel.

As Bauknight shuffles away from YTB, I am confident that the $600/year he will pay for the booking engine may pay off for discounts on his personal travel. The question remains, will Jeff Scott, the new owner of YTB's travel division, now called First Travel Alliance, allow people to maintain websites for their own discounts.

In other YTB news, just last night I heard that the number of travel selling RTA's (Travel Agents) has now dipped under 2,000. At one point, YTB boasted close to 150,000. With 2,000 agents selling at the levels of the old YTB, First Travel Alliance will not come close to being the powerhouse host agency they likely had intended.

Another Lawsuit Filed Against YTB

2012-11-12T16:13:00.001-05:00

According to the Madison-St. Clair Record, YTB is being sued once again for breach of contract.

A Canadian consulting company alleges an Illinois travel company, based in Wood River, failed to pay it nearly $150,000 owed for its services.

YTB has been the focus of numerous suits over the years including the Attorneys General from California and Illinois. They have had class action suits filed against them which are still working their way through the system and their founders have been forced to step down from the company.

The travel assets of YTB were reportedly sold to Sixth Scott LLC and the new principal has vowed to steer the new company (First Travel Alliance) away from the multi level marketing model, but to date has not done much of anything.

YTB once numbered close to 140,000 independent "travel agents" and now, estimates suggest that number may be under 10,000 as YTB continues to flounder. YTB's stock is hovering around a penny per share and has been at that point for close to six months. At one time, the owner's had promised that the shares would be trading well over $10. YTB has failed to produce the SEC required annual report for 2011 and has not submitted any quarterly reports for 2012.

YTB Prepares To Exit Travel Industry

2012-10-09T11:02:00.003-04:00

It appears that YTB, the multi-level marketing company is no longer in the travel business. After selling their travel assets to Sixth Scott, LLC/dba First Travel Alliance last year, it appears that YTB and MLM are no longer a part of the plan going forward.

In a recent article in Travel Weekly, Jeff Scott, the new chairman has said that one major distinction from YTB is that First Travel Alliance is not a multilevel-marketing company, so downline recruiting is not part of the business model.

According to the Travel Weekly article, it appears that First Travel Alliance will be severing all ties with YTB in a few months

Jeff Scott, president and CEO of Sixth Scott LLC, which launched First Travel, said that Sixth Scott will continue to work with YTB for another few months, as it transfers training and technology. First Travel Alliance has been selling travel since March.Jeff Scott, president and CEO of Sixth Scott LLC, which launched First Travel, said that Sixth Scott will continue to work with YTB for another few months, as it transfers training and technology. First Travel Alliance has been selling travel since March.

As many know (and this blog documents), YTB took the travel industry by storm back in 2007. Of course, the storm was mostly smoke and mirrors as the founders (Coach Tomer, Scott Tomer, and Kim Sorensen) promised riches that never materialized for $500 and $50 a month. The allure of quick cash and promised riches never materialized for most people. The average annual income (after dishing out $1100 a year) was a paltry $200. But the modus operandi of the company was to promise even greater riches by enhancing the program (read: giving them more money) by buying self published magazines, attendance at conferences, referring friends, selling ancillary products and the like. There were several close associates of the founders who were rewarded and were paraded to the masses to show off the lifestyle the majority were missing.

Their tactics did not go un-noticed and they were dropped by many travel suppliers, IATAN, and had several federal lawsuits filed against them by the States of California and Illinois. There is also ongoing litigation as well.

When the scheme began to unravel, Coach Tomer mover to Florida (a homestead exemption state, so his home could not be seized) and was asked to leave the company by the Board of Directors. He still is collecting a check, however, as a consultant and has filed bankruptcy yet again in the wake of all of the pending litigation and an unsatisfied lien from the IRS exceeding $500,000.

The assets of YTB Travel were sold shortly before Kim Sorensen died due to complications of a lung transplant last year.

And most recently Scott Tomer abruptly resigned claiming that he always preferred to not be in an "office" and wanted to work directly with the field. He is still compensated as a consultant.

YTB once boasted that they had 138,000 travel agents. According to the Travel Weekly article that number is under 15,000 now.

So, what happens to the former YTB? It is anyone's guess. The company seems to be trying to replicate what they did back in 2007. Holding meetings to recruit. Promising riches if they recruit. Denying that they are a pyramid scheme, and parading a very few select people as examples of success. They are rolling out programs to buy into as well. As for any product they are selling--who knows what the flavor of the week is. I have lost count. At points in time they sold travel, girdles for men and women, insurance, cars, coffee, picture frames, anti child-pornography services, make-up for black women, posters, banners, and more. At one point they represented themselves as a mall where they had affiliate sales to major stores--this is when Tomer claimed that YTB would be the largest distributor of goods in the world by 2012--YTB was to dwarf Walmart.

Tomer also claimed that for those that followed what he said (read: gave him money when asked) he would create 10,000 millionaires by 2020. Well, the bankrupt Tomer still has a long way to go.

YTB is still a publicly traded company and have yet to provide the required annual and quarterly reports to the SEC. The last report was for the 3rd Quarter of 2011. The company claims that the abrupt departure of their CFO was the reason for the delayed reporting.

Their stock, which the Tomers insisted would be upwards of $50/share has been languishing under a penny for several weeks and hasn't been higher than a dime in a year.

But as it stands now, Sixth Scott/First Travel Alliance is in business as a legitimate online and host travel agency utilizing the dregs from YTB and will be severing ties completely in a matter of months.

I have always said that if (and that was a big if) YTB were to decide to become a legitimate host agency, they would be a formidable one. But unfortunately, YTB decided to go the other way and has left Sixth Scott with a reasonable number of underperforming "agents."

Scott Tomer Abruptly Resigns From YTB

2012-09-05T15:57:00.001-04:00

Scott Tomer, has abruptly resigned his position with YTB. According to an SEC filing submitted today:

On August 31, 2012, J. Scott Tomer submitted his resignation as Executive Vice President and Chairman of the Board of Directors of YTB International, Inc. (the “Company”), effective immediately. Mr. Tomer’s resignation also extended to each position previously held by him with each of the Company’s wholly-owned subsidiaries. The Company has no current plans to replace Mr. Tomer. The Company’s Board of Directors will appoint a new Chairman at its next meeting.

Additionally, the Board of Directors has backed completely away from the merger with LTS Neutraceuticals.

The Company has determined that, after further analysis and consideration, a merger with LTS Nutraceuticals, Inc. (“LTS”) is not in the best long-term interests of the stockholders and would not enhance the strategic or competitive stance of the Company. Accordingly, the Company has ended its discussions with LTS about a possible merger transaction.

Tomer's resignation marks the first time since it's inception that a Tomer has not had control of the company.

Another Sign Of YTB's Move To Legitimacy

2012-07-31T12:16:00.000-04:00

In a prior post, I discussed my conversation with Andy Cauthen and held the opinion that YTB may indeed be looking to turn things around and go legitimate.

Today, is another step in that direction. They are eliminating the "travel agent ID card" that was such a selling point (albeit a false one) to the MLM recruiters.

On June 22, you received a letter from First Travel Alliance. In that communication they offered several levels of partnership where you are in control of your destiny and the exciting advantages available to you in the world of travel!
As a part of the transition to First Travel Alliance, we will discontinue the production of the YTB Credential Card as of August 1, 2012. After careful evaluation and communication with our partner, FTA, we deemed this to be the most prudent decision to continue to do our part in becoming the most respected name in the travel industry.Furthermore, FTA encourages you to strive to complete your CLIA certification, which is well respected throughout the industry. We appreciate your understanding and cooperation.

Will Coach's Followers Put Their Money Where Their Mouth Is?

2012-07-04T08:50:00.003-04:00

After Coach Tomer's announcement yesterday that he and his wife filed for personal bankruptcy, his Facebook page began to fill with comments from his supporters lauding his bravery, generosity, vision, etc. One commenter, even said that it was time for them to give back.

Hey YTB'ers! It's time to give back. Let's get to work!!!!!

While many in YTB would like to believe that there were thousands upon thousands who made a lot of money with YTB, the truth is that a relatively small number actually did. This number is hard to define since most pople involved in the program are instructed to "fake it till you make it."

But, without a doubt, YTB did make a lot of money for quite a few people. Even Coach had a program in 2008 to make 10,000 millionaires in 10 years. I wonder if these folks will put their money where their mouth is and truly give back to the man who "gave them so much?"

According to his bankruptcy filing, he and his wife have assets of $271,808 with liabilities of $3,863,026. The Federal Gift Tax Exemption (2011) is $13,000 for an individual and $26,000 for a married couple. Will those whom Coach help make those millions be willing to write a tax free check to Coach to lift him from this bump in the road? The difference between assets and liabilities is only $3,591,218--or 276 people....or 138 couples. If 276 people each wrote a check to Coach, he could accept the gift without any tax implications and there would be no tax implications on the giver (except a reduction in the $5m lifetime gift exemption).

Imagine the numbers who could make a smaller contribution. According to YTB's reporting on the Travel Weekly Power List, there are 12,000 people in the program. If each one wrote a check for $299.27 (less than it cost to get into the program--and certainly they have made much more than that [wink,wink]) Coach's problems would be solved.

Coach Tomer Files For Bankruptcy

2012-07-03T12:45:00.002-04:00

YTB Founder Lloyd "Coach" Tomer announced to his Facebook page that he and his wife have filed for bankruptcy.

Good Morning, Good Morning! Miss Chriss and I have recently taken a significant financial step that I want you to hear about from me. We filed for personal bankruptcy this past week. As you know, we have given our all to this company and will continue to give our all to this company. With tough economic times and everything YTB has gone through in the recent past, our resources have dried up. However, we are good, healthy and focused on not only our future, but also we are committed to help you build yours. Love ya'll! Thank you for your continued support as we build YTB to new heights! Have a WONDERFUL Tuesday!

CORRECTION: YTB Makes Power List At #52

2012-06-27T17:00:00.001-04:00

The previous post indicated that Travel Weekly's Power List for 2012 did not include YTB. It appears that the initial online version only included the top 50.

However, the print version shows YTB at #52 down from #34 the previous year. The self reported statistics indicate 95 employees (down from 300+) and 12,000 outside "travel agents."

The numbers are self reported and unable to be verified due to the delayed SEC reporting.

Under their 2011 developments, YTB states they have returned to their roots as a traditional host agency, yet also states that they sold the "travel company" to First Travel Alliance who handles all travel fulfillment. If First Travel Alliance is doing the fulfilling of all travel, aren't THEY the travel company? Traditional hosts sell travel, this statement seems to indicate that YTB does not.

YTB Fails To Make Power List

2012-06-25T16:17:00.001-04:00

YTB, the multi-level marketing company, has been included on the Travel Weekly Power list for several years. Each year, their numbers are challenged and each year, it seems that they used a different method for determining what they reported.

The minimum cut off for inclusion in the 2012 Power List is $100M in sales and it appears that YTB did not make the list.

With YTB's failure to complete the federally required SEC filings for the year ending 2011 and the the first quarter of 2012, we can have no idea how many "agents" YTB actually was able to retain as they floundered between selling travel, coffee, insurance, girdles, electricity, and any number of other non-related products.

It will be interesting to see if the acquisition of YTB by First Travel Alliance or the return of Andy Cauthen makes a difference. Will YTB be able to pull it back up, or is the downward spiral. With a market cap under $3 million and their stock trading close to 2 cents for the better part of a year, it makes one wonder.

As I said in my previous post, time will tell. But if Travel Weekly is any indicator, it seems that YTB may indeed be done in the travel business.

Why I Think Cauthen Can Turn YTB Around

2012-06-07T21:57:00.001-04:00

I spent about an hour on the phone today with Andy Cauthen the new CEO of YTB. And I am sure many of you may fall off your chair when I say this, but I think there is a new air of legitimacy for YTB; and if they can be turned around and accepted by the industry, Andy Cauthen is probably the guy to do it.

I have always said that YTB, if they were legitimate, could be the largest host agency on the planet. No one has denied that they sell a lot of travel. I have often said that they have a few very heavy hitting travel agents among their ranks. The unfortunate part was that they had a few hundred thousand that were the kings of the strike out.

My issue has always been that the way they recruited people cheapened the industry. It minimized what we do. It harmed legitimate agents and it harmed the suppliers. Some suppliers realized this (thank you Royal Caribbean, NCL, Celebrity, Azamara, and the rest) but most did not. They are beholden to their stake holders and a dollar earned is a dollar earned no matter how it came to pass. And to a degree I understand this.

I may be naive, but I have a feeling that in the next six months, we will see a new YTB emerge and one that will be accepted. How do you like them apples?

Now, about our conversation. Last week, we exchanged a few emails and on his suggestion, I offered him some suggestions on what I felt a new YTB should look like. Essentially, I said drop the MLM, keep the $50/month, split commissions based on level of legitimate training, keep the overrides for YTB, and control the RTAs.

Surprisingly, he agreed. Mostly. He said the MLM is not going away, but that he appreciated my input and the ideas were solid. WOW!

How I understand it, the travel fulfillment will be handled by First Travel Alliance (FTA) which is (or soon will be) an unrelated entity. FTA will "buy" their customers (agents) from YTB who will sell the opportunity via MLM. (Boo Hiss). However, FTA will be run as a typical host agency. They will have training, preferred suppliers, and presumably charge a fee for their services. If YTB has retained even a fraction of their RTAs, this will be a mega host.

We talked about the bogus claims and the "travel for free" mentality and Andy assured me it would end. I relayed a recent email correspondence being discussed on an agent only forum and he assured me that the type of sales pitch would no longer be tolerated. He recounted a situation where a YTB RTA was putting fliers under cabin doors on a Carnival ship that said "if you paid more than $200 for this cruise, you paid too much." YTB received an irate phone call from Gerry Cahill. The activity was stopped and ultimately the RTA was terminated. Now this was the old YTB, but he was candid enough to recall the story and to tell me that would not be tolerated.

One thing that Andy emphasized was compliance. He wants to see YTB (and FTA) accepted into the industry again and he said that he will insist on being in compliance with all the rules, regulations, and conventions within the industry. No more losing the IATA accreditation for selling ID cards. If this comes to fruition, I am convinced that YTB and FTA will be well on their way back into the industry.

Cauthen told me that the California suit was a huge punch right between the eyes and the cause of YTB "losing it's identity" over the following four to five years. When California told them to change their ways, they did not know how. They tried to introduce all sort of other products--coffee, girdles, insurance, electricity, a shopping mall, and as Andy said, "elephant saddles made by Gucci." None of which worked and further caused both YTB and their representatives to question the focus.

With the resignation of the former CEO , Bob VanPatten, the Board made a decision to put all the unfocused actions on hold. They pulled out of a merger with LTS and asked Andy to come back and see what he could do. Andy is not a travel guy--he is a business guy and he is not dumb by any means. And for some reason, he has an affinity for YTB.

Call me crazy, but I think Andy is onto something. He was very candid with me and did say that he was brought in to affect change. And that if that change is not accepted, he will not stay. Those are pretty strong words.

Time will tell, but I got the impression that Andy is serious about turning it around. As much as I dislike YTB, I think they may have turned a corner. What remains to be seen is if they can pull it off like the Phoenix, or if the damage already done is too much to recover.

Personally, I spoke with Andy shortly after he left YTB. He agreed to talk to me then, but pulled out at the last minute but was adamant that he had nothing but good things to say. Back then, I thought Andy was a straight shooting good guy. And after today's conversation, that impression is reaffirmed.

I am not willing to give them a pass based on the word of the 7-day old CEO just yet, but I am very willing to give them a chance and see what happens.

Is Travel A "Non-Core" Product Or Service For YTB?

2012-05-17T09:00:00.001-04:00

The Alton Telegraph is reporting that YTB plans to shed on-core products and services in the next year. Since the recruiting heydays of 2007 and 2008, it has been very difficult to determine exactly what was a core and a non-core business for YTB. The one consistent has been the ulti level marketing recruitment of people into their programs.

The company also will begin taking a more strategic approach to its business model, it said, by eliminating non-core products and services that are not producing a satisfactory return and exploring "new growth opportunities for leveraging its competitive advantages and large sales organization.

The company has been a travel agency, a mall, a coffee shop, an insurance broker, electricity provider, online identity protector, girdle store, cosmetics firm, picture frame distributor, and probably many more.

Travel has never been a big margin industry and it was obvious that the money YTB earned was produced primarily from the recruitment of others into the various programs. Even today, there is the Leadership Summit that costs $500 to join and $149 a month simply to learn how to make money in YTB.

One thing is for sure, YTB seems to have lost any focus they may have had and this year will be an interesting one. With laying off 1/3 of their employees (last reported figures to the SEC in 2010 stated 120), that drops it to 80. However, it is suspected that there may have been even less. Will that be enough to support the recruitment efforts?

MLM junkies are known to hop from one program to the next regardless of the product or service. Will this recent shakeup scare their heavy hitters off and send them fleeing to ViSalus, World Ventures, or the next get rich quick scheme?

Stay tuned.
Read more: http://www.thetelegraph.com/articles/ytb-70286-international-third.html#ixzz1v8B7uZPS

YTB CEO Resigns As Acquisition Deal Begins To Fall Through

2012-05-16T09:44:00.001-04:00

CORRECTION/UPDATE: The YTB agent quoted below emailed and said that upon a second glance that KidZafe is indeed still on the website; however it is no longer being promoted as aggressively as it once was. He also brought up another question regarding the resignation of CEO Bob VanPatten. His wife, Cynthia, was heading up a the Suklaa product line which was a replacement for Chae Organics. Suklaa was geared toward the African American beauty market. There is no word if Cynthia has resigned, but the YTB agent did say that he had not heard mention of her for several months.

Travel Pulse is reporting that a proposed merger involving YTB and LTS Neutraceuticals has been put on the back burner and that their CEO has resigned. In addition, they have cut their headquarters staff by a full third in hopes of saving $2.7 million dollars.

Over the years, YTB has gone through several CEOs and other senior level executives in an attempt to turn around the company to earn a profit. YTB's operating losses have been the norm for many years.

YTB has yet to file it's 2011 8K (annual report) with the Securities Exchange Commission and has filed for two extensions claiming executive level departures as the reason. While the report (as of latest extension) is due on June 15th, it remains to be seen if YTB can produce it. According to Travel Pulse, they also indicated that their 10Q (quarterly report) will not be filed in a timely fashion and are addressing this. I suspect that the company will soon be delisted and revert to a private company where legitimate financials will no longer be required to be shared.

There was no mention of the merger with Sixth Scott, LLC or First Travel Alliance. Other than an announcement that Royal Caribbean was again salable, there has been little public indication that this merger is going forward.

A current YTB member reflected that it seems all of the products they were bringing to market are no longer the focus of the company despite significant investment from the YTB members.

ZamZuu is not selling the KidZafe Online Predator Safety product anymore. All the months of training and hype that this was the best product on the planet and it lasted 6 months. Same thing with electricity. Same thing with a group of services that once were available are not available anymore. They brought on a bunch of products and services that lasted 6 months or less. How do they expect me to trust them now with bringing them customers when the product or service will be gone within 6 months. This has happened to well over a dozen products and services.

And that is a good question?

The current push is for The Leadership Summit (which appears to be a higher dollar reiteration of a past program) where YTB Directors pressure the lower level members to attend these "training sessions" at a cost of $495 (one time fee) an $125 per month. The Directors have been giving marching orders to have 250 enrollments in their area for the summit to happen. The program also requires you to attend (read: pay) a minimum of 12 sessions over a year at an area location (usually involving travel expenses--currently the only areas that have achieved the 250 registrants are Baltimore and Toronto) and you must bring one new prospect with you each month. Once three prospects are enrolled in the program, for $149 monthly fee is waived. Sound familiar?

If the enrollment is successful, this will be a huge cash influx to YTB. To sweeten the pot, YTB has now followed the lead of other MLM companies and is offering a lease reimbursement program for a luxury car--but only if you enroll in the program. Ironically enough, before YTB began to crash and burn, their recruiters were mocking the other MLMs for their car promotions. Now it has come full circle.

While the program alludes to be somehow connected with Franklin Covey, Franklin Covey would not confirm their involvement.

THE LEADERSHIP SUMMIT COURSE COMBINES THE GENIUS OF FRANKLIN-COVEY TRAINING WITH REAL-LIFE ENTREPRENEURS AND LEADERS THAT WILL SHARE THEIR EXPERIENCE – AN AMAZING OPPORTUNITY AT AN INCREDIBLY LOW PRICE FOR TRAINING THIS POWERFUL!

This is very similar to the tactic YTB employed years ago when they claimed that Roger Staubach, Serena Williams, and yes, even Hillary Clinton were RTAs selling travel through YTB. At one point an independent Director also claimed that Joel O'Steen and his ministries were associated with them--a claim that O'Steen vehemently denied.

As it has been with YTB for many years, there is always another program that will bring the promised successes to the masses--but it always comes with a price. Way back when, it was $500 and $50 a month for a travel site. But then when that did not work out it was because the RTAs did not buy the Success From Home paid sponsorship magazine at a cost. And then the training was holding them back from riches, and then it was because they were not selling the stuff in the mall, it morphed into girdles, coffee, electricity, and so on, and so on.

Each new program infuses just enough cash into the company to launch the next one, kicking the company down the lane just a little. Will YTB ever get to it's destination? Or will the rock that is YTB be kicked off the road. Time will tell.

YTB To Begin Selling Royal Caribbean

2012-04-15T11:50:00.001-04:00

According to the Just Picture It Now Newsletter, YTB has found a way to sell Royal Caribbean cruises once again. Initially it will only be through their travel support number, but shortly it will be available on their booking engine as well. Here is what the newsletter said:

Effective tomorrow, (that's Monday, April 16th) we will be able to book Royal Caribbean Brands through our own Travel Support phone number.

On (or about) May 1st, Royal Caribbean Brands will reappear on our booking engines so everyone and anyone can once again begin booking cruises with Royal Caribbean.

At this time, we are not cleared to book directly with Royal Caribbean - and we do not have a specific timeline when we will be able to book directly once again with RCCL.

Bottom line - after 4 1/2 years - YTB is back with RCCL.

This is most likely one of the perks of being acquired by First Travel Alliance and likely a similar program when Royal Caribbean bookings for YTB were being run through their sister company (a legitimate host agency) in Florida that was lost when YTB and the Brents (Rezconnect) split ways.

Royal Caribbean has not issues a statement on this new found relationship just yet.

Crazed JetBlue Pilot Was Also Direct Marketer For Visalus

2012-03-29T09:25:00.002-04:00

According to the Associated Press, Clayton Osborn, the JetBlue pilot who went berserk earlier this week had a side gig selling nutritional shakes with multi-level marketing firm ViSalus.

Another longtime friend, Bill Curley, said Osbon is a Christian who has become "increasingly" religious but wasn't fanatical.

Osbon was also a direct marketer for health shakes sold by Visalus Sciences, a marketing company based in Troy, Mich. Ashley Guerra, a fellow Visalus marketer in Georgia, said she saw Osbon just last weekend and that he appeared friendly and helpful as usual.

ViSalus was one of the multi-level marketing companies who successfully recruited many directors away from YTB several years ago.

YTB Anticipates $5 Million Dollar Loss For 2011

2012-03-21T12:37:00.000-04:00

YTB has postponed filing it's 10-K (Annual Report) to the SEC due to the abrupt resignation of their CFO in March. In the filing, YTB was required to note any significant change in results from the prior year. They reported an anticipated loss of $5 million.

The Registrant anticipates that it will report significant changes in its results of operations for its fiscal year ended December 31, 2011 compared to its fiscal year ended December 31, 2010. Based on the information available at this time, the Registrant anticipates a net loss of $5.0 million or $(0.04) per diluted share compared to a net loss of $4.0 million or $(0.04) per diluted share for the comparable prior year ended December 31, 2010. Net revenues are anticipated to be $26.4 million in 2011 compared to $36.4 million reported in 2010. Total operating expenses for 2011 are expected to be $31.4 million compared to $40.0 million reported in 2010.

Last year, the company lost $4 million according to their 10-K. YTB has not had a positive year-end report in more than 6 years.

YTB's Ship Must Be Sinking Yet Again

2012-03-01T21:15:00.001-05:00

What has happened to YTB lately? Well, the stock that was going to make everyone wealthy beyond their imagination is about to go for under a penny a share. Today, as the Dow is in record territory, YTB's stock is trading at 1.3 cents. The 52 week high for this stock is 18 cents. The Market Cap (value) of the company is at an historical low of $1.6 million.

The 10-K for YTB is due to be filed with the SEC by the end of this month. The last report (10-Q) was not covered here at all--it was more of the same....reps down, travel agents down, losses up, revenues down. Yet YTB remains bullish on their ability to sell coffee and girdles. When the 10-K comes out, we will be better able to analyze it.

In an 8-K filed with the SEC today, YTB announced that their CFO, Jeffrey Hermann has decided to jump ship on March 14th. This will leave CEO (and wife of YTB Exclusive Supplier) Bob Patten as the acting CFO. This is a role in which he is familiar as YTB has seen many top executives leave in the past few years.

Also in the 8-K, the terms of the agreement with Sixth Scott, LLC for the asset purchase of YTB have been changed. From the language, it seems that the performance was not as expected and rather than paying YTB a fixed sum of money, the revised agreement is based on an earn-out based on the productivity (or lack of) of the network. The 8-K also alluded that the current employees of YTB operating within the asset groups being acquired will likely be terminated.

When Did Holland America Paint Their Ships White?

2012-02-13T13:39:00.001-05:00

If you want to sail on one of the most exclusive ships in the Holland America Line fleet, book your travel with YTB. Apparently HAL has agreed to paint some of their ships white just for YTB--you know because they sell so much Holland America.

Kim Sorensen, YTB Founder Passes Away

2012-02-01T15:11:00.002-05:00

YTB announced that Kim Sorensen, one of the founders of YTB passed away this morning. While we have never agreed with the business model of YTB, Sorensen was a very effective leader for the company and very well respected among his peers.

One cannot dispute that YTB sold a lot of travel and under Sorensen's watch, YTB was named a Pinnacle Agency by Carnival Cruise Lines and Travel Weekly named him one of the most influential people in travel.

We are sorry to hear of Kim's passing and our thoughts, prayers, and condolences go out to his family, friends, and colleagues.

The following is the announcement sent by YTB to their members.

April 13, 1950 – February 1, 2012
It is with great sadness that we announce J. Kim Sorensen took his last breath on Wednesday morning, February 1, 2012. While he will forever be remembered as our fearless Founder, the man who had the vision to see beyond a failed venture and turn it in to one of the greatest stories ever told, we all know that he was much more than that. A great man to say the least, Kim was a husband, father, grandfather, and dear friend to so many of us.

Please join us in remembering Kim’s extraordinary life and passion for helping individuals write their own success story. As he always said, “I need everyone to get in the game.” Let’s join together to honor his memory and celebrate a life well-lived.

Please share your favorite Kim moments in the comments below.

Funeral arrangements have not yet been determined. More details will be released soon.

Tomer, Sorensen & Scott Explain

2011-11-09T08:50:00.000-05:00

To me, this video seems to be backtracking a little bit. A few days ago, Jeff Scott said YTB was going away. Now, in this video produced for the "travel agents" they claim to be keeping it the same and have only sold the fulfillment part of YTB to Sixth Scott. Perhaps this is a backdoor method to re-gain their IATAN certification and access to the suppliers that have decided to not do business with YTB.

This will be interesting to see how it plays out as Scott Tomer concludes by saying that this acquisition was indeed all a part of the plan when YTB was founded eleven years ago.

If the video does not display, (YTB has it as "unlisted") here is the URL:
http://www.youtube.com/watch?v=h4f25rq-99g&feature=player_embedded#!

YTB's Sorensen Confirms YTB Is Out Of Travel!

2011-11-08T08:39:00.001-05:00

In an interview with Travel Weekly, YTB's Kim Sorensen has confirmed that "we won't be a travel company and won't have vendor contracts with anybody."

Sorensen continues and admits that travel was probably not the best product for YTB and MLM. He explained the newest venture for YTB. "We also sell gourmet coffee, business texting services, green energy products, other power agreements. We are vastly diversified now. We were very focused on travel back in the day."

What remains to be seen is what Jeff Scott of Sixth Scott, LLC will do with the dead wood that YTB refers to as their "travel agents." The agreement is structured based on existing agents coming over to Sixth Scott, but very few agents are productive--most simply sell their own personal travel as is evidenced by their sales and commissions. A YTB insider confided to me that there are less than 200 agents in YTB who produce more than $5,000 in sales per year. If true, Sixth Scott is paying nearly $40,000 per agent for a very mediocre agent.

Will Sixth Scott be willing to retain 30,000 people that buy inexpensive vacations every year or so? Will Sixth Scott be willing to maintain the liability of these same people calling themselves "travel agents" under the Sixth Scott/First Travel Alliance brand?

Will YTB be able to shift their existing independent contractors to Sixth Scott--or will we see a mass exodus? If there is not a MLM element to the Sixth Scott program, I believe there will be a mass defection since YTB has (since its inception) sold the travel agent program on a multi level basis.

One commenter to the TW story summed it up nicely:

Interesting. So bottom line is - if you read between the lines - "our model simply does not work for travel" AND "it certainly was never going to work being run by people who knew nothing about selling travel" AND "we really screwed up early on by not training agents and not demanding any sort of professional behavior from them" AND "now we're going to focus on selling the kind of products MLM really works with - things people don't really need but perceive that they want".

So it looks like anyone who has hung in there with YTB TRAVEL will now be offered the opportunity to stay in but as an Independent Contractor and with First Travel Alliance. I have to assume there will be no more incentive in selling other people "travel stores" but rather that the only money to be made will be via the actual sale of travel.