TIR magazine - 0861 Travel exonerated - Melany Bendix unscrupulous
For those agents who have had the misfortune to read the article on 0861Travel in the February 2007 edition of TIR, here are some facts you need to know.

IATA:
They claimed that we misrepresented our IATA membership, and stated that our licence was cancelled on 25th October 2006, yet we still displayed the IATA logo on our website.Here are the facts:
1. IATA agreed to take us through a process of canceling the licence held by Travcon (Pty) Ltd and apply for a new licence in the name of 0861Travel (Pty) Ltd.
2. Their Peter Maseku replied that final billings would be available by the end of September 2006 in order to settle the final account and apply for a new licence.
3. No final billings were received until 8th February 2007.
4. In between that time a registered letter dated 25th October 2006 was purportedly sent to Travcon informing them that the licence had been cancelled, which was expected. However, their letter had incorrectly captured our address and furthermore came from Geneva, and not Johannesburg, whose previous correspondence sent to us was correct.
5. We simply never received such notice and were therefore unaware of such cancellation.
6. Furthermore, IATA continued to pick up returns from our offices until December 2006 as if the status quo had remained.
7. In January 2007 we addressed IATA, with their logo on our email, to press them on the issue of our final billings, and no one said anything.
8. On the 6th February 2007, Johnny Ray spoke to Peter Maseku on the whole issue of their delays. This was followed by a call from Natalia from TNW. Only after questioning did we get an email enclosing a copy of this letter dated 25th October 2006.
9. In all our dealings with IATA they always faxed notices as well as posted. Why not in this case?
10. Another question is how does this information get to journalists? Surely it is confidential. After getting this info through unlawful means, TIR did not confront us with it. Instead they decided to play judge, jury and executioner.One should never assume and then judge. The spotlight is now on TIR to explain how they got the info and to retract their allegations against us. AS far as we are concerned, IATA’s notice was defective and therefore the licence was only cancelled on 6th February 2007.

ASATA:
It is hard to actually make out what point TIR is making about ASATA membership. The simple fact is that we were members. ASATA disbanded its ASINTO section we belonged to and we advised the Franchisees accordingly. It is also a fact that we deleted the ASATA logo off our website and emails and since the beginning of 2006, and yet TIR claim that the have a signed letter from us dated May 2006 which purportedly has the ASATA logo on it. Once again they are assuming this to be correct. Furthermore we have never represented in our contracts that we are members of ASATA, and yet for the sake of 1 letter, we have been accused of “blatantly” mis-representing the fact that we a re members of ASATA. Simply, this is not true and our membership was not material to any existing franchisee.

It also once again puts into question how TIR has unlawfully obtained confidential information from ASATA.Start Up businesses:TIR states that “Franchisees are falling like dominoes” and that we have the “worst travel agency closure rate in travel industry history”Firstly, we are the only Travel Franchise Company that does start up agencies, so their statements are void of any sensible analytical data on this subject. But let’s analyze some of the stats that they have alleged. According to their, 30% of the Franchisees have closed in the last 3 years. Statistics for new businesses in this country is that after 3 years, 95% of new businesses have closed down. The stats for Franchise operations, is that the number is 50%. Therefore a 30% failure rate is an improvement on the norms. Once again showing the one sided approach that TIR had in the story.

Various issues raised:
It is difficult to individually answer some of the comments and allegations made by some ex-Franchisees due to upcoming litigation, but we can say the following:-
1. We have built stunning stores and wonderful branding for each persons business.
2. Everyone has been given Worldspan s a GDS system. Who in turn have supported and trained many of the Franchisee staff.
3. Our web application, MultiRes, offers one of the best and most efficient web applications in the travel agency / wholesale operations in the country today. It has been up and running for more than 95% of the year for the past 5 years and we invite interested agencies to see how the system works on a one on one demonstration. All franchisees have been given access to and registered with all major tour operators and have been given access to our prices to make competitive choices. Tour operators have been extremely supportive and their brochures can be found in the branches brochure racks. Adequate training has been given in terms of understanding our processes and systems. Not training to convert a person into a travel agent overnight. Everyone is given passwords for Multires, access to a GDS, email accounts, stationery graphics together with electronic stationery and a marketing plan. In essence, we are enablers. The business has to be run successfully by the Franchisee.

SO where has some of it gone wrong?
• Some franchisees have simply used us for a start up company, and then move onto bigger brands or become independent. Thus they avoid franchise fees once they have everything behind them. They are using this platform to get out of a 10 year contract.
• Others have failed simply because they have failed to put things together in order to sustain the business and a common theme is that they “have not followed the business plan”. A lack of their funding has contributed towards this. Our feasibility on the website has estimated that it will take 2 years before you make a profit. These franchisees are now also using this platform to resile from their 10 year contract.
• Another common denominator is that a major cause in the breakdown in relationship with the Franchisees is that we have had to continually put Franchisees into breach for being dishonest in transactions in order to pay less franchise fees. We have recently made a change whereby we now have a higher monthly fee with a rebate and Franchisee has the choice of where they place their business.

On the question of pricing and discounts: By putting a collective body together we can leverage volumes into better pricing and overrides. If anyone understands the industry, it is not the Wholesaler who determines the price, it is the volume produced by his agents and their clients. TIR does not appear to understand this concept, so we will just leave it at that.

Why this attack on 0861Travel:
Some ex Franchisees have been represented by advocate Louis Nel who has admitted in the past that we are not in breach of our contract. He is now trying to negotiate a position for the franchisees with an aim of getting them out of the 10 year contracts. This is through the creation of a story that we have not delivered on our promises and that we have misrepresented ourselves. Obviously now that the truth is out that they were wrong about IATA, who knows what else he will cook up.

Advocate Louis Nel is well connected in the Travel Industry as he is employed by ASATA as their legal advisor and who writes a column for TIR. We know first hand that he is able to obtain confidential information from ASATA, and has used it when representing franchisees. We believe that there are huge conflicts of interest when an advocate represents clients such as travel agents, a body such as ASATA and writes a column in an industry magazine over which he has influence.

Right from the outset, when Melany Bendix from TIR approached Johnny Ray for an interview, her true intentions and information she had already had on 0861Travel were not forthcoming and the interview was conducted in a vacuum. Likewise her written questions were also put in a vacuum and she broke her word to firstly send Johnny the article before print. The whole interview was gained under false pretenses.Melany then went on to the franchisees and gave them all her allegations to maximize stirring the pot for 0861Travel.

Her behavior is unethical and lacks integrity. But this is what happens when you have an industry whose main institutions are controlled by a few people with a cross section of interests and can wield their influence to manipulate.

So Where to now?
The travel industry has a problem. Small to medium sized agencies, mainly independent or part of Franchise concepts, are in danger of going out of business in the next three years.

Why?
It is a high volume, low margin industry. Shopping centre rentals are high and so is the cost of admin staff to control IATA licenses. Airlines are in direct competition with travel agents through their websites, not because of any bad intention, but merely to save costs. We have always advocated that the internet and all modern day communication technology and software in a B2B situation can be the travel agents best friend. We are currently developing a multi platformed approach to bring together all internet tools to satisfy the airlines, the GDS service providers and cut out all back end settlement administration which has pushed costs up for both the agent and the airlines.

Noseweek Magazine - 0861travel article full of lies and deceit
There has been a lot of inaccurate reports from journalists Melany Bendix on behalf of TIR magazine and Noseweek. These articles are defamatory and full of lies and deceit.

It would be obvious for 0861Travel and the Rays to say this, therefore one has to go back a while to see what motivates these reports which are aimed at smearing the good name of 0861Travel and the Rays. This motivation is no more than revenge and money.

The story begins with a concept of Afritourism Ltd, a company which listed on the Botswana Stock Exchange. The Rays were an integral part of the concept which was well documented in the prospectus. The Rays were never in any executive role on the main board and had no control and say over any of its financial management.

As can be read from reports tabled in other posts, Afritourism, lead by the CEO Glynn O’Leary, totally mismanaged the finances of the company in the first 6 months, posted dismal results, were suspended from the Stock Exchange and went into voluntary liquidation.

The Rays, whose part it was to do the sales and reservations and develop a lodge in Sea Point, Cape Town were the lone voices warning the non-executives of this mismanagement.

It was apparent that the Directors, led by Glynn ‘Leary, were not going to implement the sales and reservations system, as contemplated in the Prospectus. As can be seen by their dismal results, the Directors did not want the transparent and highly accountable system to be implemented as they were manipulating financial information for their own gain. The Rays then called for a management buyout of their sales and reservations company, which was vetted by Afritourism and Glynn O’Leary. After this it was bought to Mrs. Ray’s attention that the lodge she was managing on behalf of Afritourism in Sea Point, had projections presented to the Board of Afritourism, which would require her to operate at 100% occupancy. She approached Barry Grey, the group Accountant, who did not give satisfactory answers. In terms of her fiduciary obligations, she reported this to the accountants and the non-executives of Afritourism. Within 3 weeks of this letter, she was suspended and later fired, and illegally removed as director of the lodge. She won her case at the CCMA, contrary to the lie reported by Noseweek.

After this event, the Stock Exchange in Botswana grew wary of the inconsistent financial information they were getting from Afritourism and when their financial statements were late they were suspended. The Stock Exchange did not stop at this. They ordered an investigation into the affairs of Afritourism. An investigation was conducted throughout Southern Africa by Deloitte Touché. The bottom line is that executive directors were fighting amongst themselves, drew huge salaries and expense accounts, mismanaged the business, unauthorized expenditure on assets not reported in the Prospectus, and most of all did not stick to the business plan as contemplated by the Prospectus. Before the AGM, Glynn O’Leary was fired, but at the AGM was appointed as a non-executive director.

Before this report could be made public, the company went into voluntary liquidation – how convenient?

All of Glynn O’Leary, Karl Heinz Gimpel and Tim Fincham had never examined the reservations and accounting systems, so how they can even comment is a mystery, but perhaps this is indicative of how they ran Afritourism.

Obviously, the firing of Glynn O’Leary and the suspension of Afritourism struck a hard blow for Glyn O’Leary, a former director of the now defunct Tollgate.

Revenge was born.

Glynn O’Leary is connected to the media industry, and had a partner by the name of John Simpson in a company called Global Images. John Simpson is the director and Chief Editor of TIR Magazine (Travel Industry Review).

As a bonus, one of their columnists is Louis Nel, who is a mediator on legal matters in the Travel Industry. Louis Nel represents some franchisees wishing to get out of their contracts. The three wise men (Glynn O’Leary, Louis Nel and John Simpson), got together, and hatched a plot to totally smear the good name of the Rays and 0861Travel. Approximately a year ago, Louis Nel became involved in approaching franchisees to join him in his quest to discredit 0861Travel. This information was then passed on to Melany Bendix. Before the first report came out on 0861 Travel, the issue regarding the Sea Point property was already known to Melany Bendix, and these lies were spread to Franchisees to pitch them against 0861Travel. Their theme has been that the Rays sell something which has no backing. They are prepared to make this statement, and yet, not once have any of the parties, including Melany Bendix, bothered to ask the right questions and be transparent about all the issues. Included in this, some obvious things were not investigated, like:
1. 0861Travel’s balance sheets. This tells a factual picture far different to what has been reported.
2. MultiRes. No one has bothered to properly examine the system, using any expert from they industry that they wish.
3. Examine all methodology and processes used by the Franchisor.

Instead, they have had a certain goal in mind, and everything they have written has been molded to their goal and not the facts.

It is an interesting story on how the Franchisees are doing what they have done, and as usual it is only superficial and selective reporting which has told their whole story.

In August of 2006, certain Franchisees had an idea to make a bid for ownership of the 0861Travel company. It is understandable that people would want direct control of a great concept, product and brand which had taken a number of years to develop.

Negotiations of which the Rays were unaware of at the time were underway, and in September 2006, after certain clandestine meetings between the Franchisees had taken place, an offer was put forward to the Rays to purchase the company from them outright. Unfortunately for the Franchisees this offer was in turn rejected outright.

Incensed at the rejection and acutely aware that they were tied into 10 year contracts each and having a now very strained relationship with the Franchisor in terms of the manner in which the bid was made, certain Franchisees then decided to create an environment in which they would ultimately try and legally get themselves out of their Franchisee agreements. With much collusion and underhandedness, certain Franchisees in association with Louis Nel banded together to bring the 0861Travel group to its knees. Louis Nel not only is an industry legal expert, but of all co-incidences he happens to be a columnist for TIR magazine. Not even the devil himself could have dreamed up a better partnership.

It is interesting to note that since the initial TIR story broke, that both TIR and Louis Nel have approached the Ray’s individually and on behalf of the Franchisees to “resolve” their dispute. However, it appears that there is clearly no dispute, just a number of people desiring to get out of a contractual obligation using Machiavellian tactics.

0861Travel is an awesome concept and a business that has performed well according to its model. In fact, Noseweek magazine starts off by saying in their first article that “Industry experts agree that 0861Travel is a great concept”, and they then end off by saying that it actually a scam. So all of the stores that were built, operations that were put in place; and a business model that Industry people say is a good one must just be figments of peoples’ imagination??? Talk about contradictory!

Not only this, they say that the Ray’s sell to lower class people??? I wonder how the Franchisees would like to be called lower class people?? How do you make this kind of judgment on a person?
What happened to objectivity and plain old good fashioned reasoning. It apparently all flies out the window when you “report” using only emotions based upon fallacious statements and unbridled desire for revenge.

The property deal in Sea Point included 2 contracts; one for the purchase of the property and one for the sales, marketing and reservations for the property as a hospitality establishment. All parties knew that their purchase was based on occupancy to give them returns. The funds that were paid in to ITS was for the sales, marketing and reservations for the property and not the purchase of the property. The company has committed itself to repaying this money on the sympathetic aspect that the participants had no control over the deal going wrong.

The sellers of the property were given a copy of the approval by the bank which required that the 16 flats be sold. They were therefore aware that sales contracts had to be entered into. This was then endorsed by a purchase and sale agreement given by the sellers containing no suspensive conditions.

Two properties were involved. One was the main lodge and the other was the block of 16 flats. If the property deal had gone through, a substantial benefit would accrue to the Rays through the purchase of the Lodge. Therefore the Rays had everything to gain by the deal going through.

More to follow..........

T.I.R. Magazine, Melany Bendix and Lies