Island Red Cafe more like a ponzi to me
I am sure many of us has been introduced to Island Red Cafe. It strike me after i visited indavidlee blog where he blogs about the Island Red Cafe Investment Plan.
I was introduced about this investment plan like 6 months ago but i couldn’t be bothered to join. The food was so so and guess what, i went there once and didn’t step in there again after that.
As usual, after the meal my friend who introduced me to this cafe explained about their investment plan. I can’t really remember the details but this is what imdavidlee wrote about the Island Red Cafe investment plan :-
1. Whenever the region accumulated 50 slots investment, an Island Red Cafe branch will be opened. 1 slot = RM6000. The investor will be the shareholder.
2. Shareholder’s benefits:
- Fixed return RM300/slot each month (5% of the investment) for 1st and 2nd year. So, total that you will get is RM7200.
- Fixed return RM150/slot each month (2.5% of the investment) for 3rd, 4th & 5th. So, total that you get is RM 5400
- RM100/slot food voucher will be given every month & will be given for total 5 years which equivalent to RM6000.
- VIP member discount 15%
- Birthday discount 30%
Why i say this kind of investment is a ponzi?
Remember the Maddoff Scam? It works on the same mechanical on this investment plan. The masterminds of Island Red Cafe is looking forward to gain money from the public by sharing the franchise business to them and promising returns to the shareholders.
This can happen if there is continuous members joining into the business. Money generated from new clients will be used to pay the earlier clients. This process continues on and on.
What happens if there is no more new members joining into the business? Island Red Cafe wouldn’t have the money to pay the earlier members and the whole system crumbles.
Conclusion
I won’t invest a single penny on this business due the nature that it’s a ponzi and it’s also multi level. To those who has invested in this plan, i wish you all the best of luck. Only time will tell whether this Island Red Cafe will be a success or failure.
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(2 votes, average: 4.5 out of 5)
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18 Responses to “Island Red Cafe more like a ponzi to me”
By LOKE on May 30, 2009 | Reply
One of the most “well known” businesses is Lamp Berger. Many people think that it is a scam. What do you think of this business (MLM)?
By Horizon on Jun 1, 2009 | Reply
I got an email from a friend today saying the same thing. Besides Island Red Cafe, Stevens Corner was mentioned too…
By Kampung Boy on Jun 1, 2009 | Reply
I have heard about Stevens corner as well. I thought Stevens corner was doing very well in KL?
According to my friend, they want to open Stevens corner in each of the Jusco outlets in Malaysia.
That’s big!
Lamp Berger? Confirm scam… Now we don’t hear much about them anymore. As it’s hard for them to get new members to feed the earlier members.
So it’s dying off… Almost got scammed by this as well! ^^
By LOKE on Jun 9, 2009 | Reply
Then, congratulations !
By dree on Jun 21, 2009 | Reply
I saw this cafe listed as one of the scams in MY. Personally, i don’t have anything against MLM companies except the fact that some of them over promise and under perform. Or the worst ones are those which run away or bankrupt once they collect a sum of money.
Thanks for the write up about this. At least a lil’ more insight about how this franchise works.
By Penang Tionghua on Jun 27, 2009 | Reply
A business is called by the people as a scam or a bad pyramid when it closes down and the partners loses or being cheated of some or all the monies they put in without reasonable cause or explanation, among other things.
Only at that time of the loss or deprivation could one define the business as a scam or a bad pyramid.
Before that happens a rational person would not call it a ‘bad’ pyramid or scam. The last situation “bad pyramid or scam” has not happened yet.
Which famous manufacturers, factories or MNC do not have a pyramidal organization structure?
So, there are good and bad pyramids.
When the partners or members earn money, they would not call the business a scam or pyramid. However, at the time of loss they blame everyone except themselves.
The Golden Rule:
Willing Buyer and Willing Seller.
Caveat emptor!
The main crux being if one is afraid of losses then stay put in employment. Don’t ever talk or discuss about business because it irks to talk things one does not know,understand and appreciate fully.
Business normally has certain risks. To invest or not is ones’ own judgement.
One can drag a bull to the water, but one cannot force it to mate.
The end results would show the good or the bad part of one’s judgements.
If the business turns out to be a profitable and not a scam, then one’s judgement must also have a name to be called, for example wrong judgement or something not so nice such as s**pid f*ol?
To call it a scam or something nasty before the actual happening is to project one’s wisdom and judgement unnecessarily.
Be rational, stay and watch the show if one does not want to participate. One would know whether one strikes a lottery.
A final word:
1) MLM is not for everybody or for one’s interest or having or not having interests. One must have the special skills, commitments and stamina to succeed. Interest is not the sole element.
2) One must have the capability to command a line-up to effect the best harvest for one’s own team.
3) It is not an employment or an ordinary 9 to 5′o clock job. If one can achieve this fast and the team earns money and profits, the fear of losses or risks do not exist anymore.
By Penang Tionghua on Jun 28, 2009 | Reply
For information on positioning of Island Red Café, visit the website below:
http://www.iota.org.hk/edu_public-b.htm
By rafe boon on Jun 30, 2009 | Reply
yes, i agree. u realise how sad it is when these MLM people brainwash people into believing a system that is non-sustainable? n even more sadly these people who are tricked into these schemes would actually set aside their jobs, career, relationship and family and blindly follow a scam of which they think will make them millionaires. As far as i am concerned, Island Red Cafe is another BIG SCAM and i ask the question, when will these people LEARN? eat & make money? please
By Kampung Boy on Jul 1, 2009 | Reply
Island Red Cafe will unfold as a scam when there is no more new people joining in. Just careful people as there is no free lunch in this world.
By Penang Tionghua on Jul 6, 2009 | Reply
As I have said on scams and bad pyramids, I would add the following verses:
Heroes never die
Cowards never survive
Enterprise must multiply
MLM becomes the way of life
False prophets are abound
Truths are still around
If inexperienced judgement be sound
Then experienced people are clowns
It’s not important when would people learn
Of first importance is one must learn to earn
How could one be a good and sound teacher?
When one is a MLM tempurung naive creature?
By Penang Tionghua on Jul 6, 2009 | Reply
When a person passes value judgements or opinions about scams or bad pyramids without any background data of the owners, it means he holds a pre-conceived opinion or mindset that the owners are out to cheat even before the business starts.
A rational person would not arrive at that conclusion if he does not know the owners personally or their track records.
The person must know the owners to pass the opinions or value judgements otherwise all good efforts would be destroyed by the irresponsible writings
Do the owners have a track record of scamming, scheming a scam or cheating?
A person or writer cannot just make a sweeping statement or value judgement on the good and no good.
This means the person or writer shows his irresponsibility by brainwashing the public through blogging or comments in the blogs and treats other people or followers of MLM as lesser persons, lesser clever and lesser smarter than himself.
This is an insult to other peoples’ intelligence that only the bloggers or commenters’ opinions or statements are the right ways, especially when he poses a question, “when would people learn?
Reversing the phrase, it would be “when would I (bloggers, commenters et al) learn?”
The nation loses by the writers’ irresponsibility in brainwashing and attemping to suppress enterprise and entrepreneurship by creating phantoms in the minds of the youth.
How could the writers know what is in the minds of the owners whom they have no data to back that they are schemers of scams?
A person’s writings would show that he is a schemer of some sorts; for good or bad only the passage of time can tell.
Prophets of Doom can predict anything. Only God and Prophets can decide the future, humankind being mortal should not play such roles and declare any folding or unfolding of the future to confuse the minds of the people.
By KnowThyMoney on Oct 5, 2009 | Reply
I heard from my friend that the branch at Penang is already closed down for renovations.
By OhMyGod on Oct 15, 2009 | Reply
The branch in Shamelin & Pandah Indah also closed
SCAM
By Kampung Boy on Oct 15, 2009 | Reply
I wonder where is Penang Tionghua now? -_-
By Penang Tionghua on Oct 19, 2009 | Reply
I just stopover your blog after a long absence.
Take a look at the Chinese Newspapers today 19/10/2009 - big news.
Closing down some outlets is to trim or restructure the structures of the ex-management.
Also, outlets not following the licensing agreement, e.g refusing to accept payment by e-vouchers of members would face possible sanction or close down by the present management.
The present management has to close down or rationalise all outlets of ex-management.
Action has been taken to support members to achieve good directions and accountability.
Further than the above, I could not comment more coz I have no locus standi to act for the company. Please refer to the Chinese newspapers today for details.
The present management which took over on the date as per their website is still actively supervising the operations of the licensed outlets accepted by them.
The Head Office and the present management are still in Malaysia.
My comments on 6 July 2009 above are not on any particular organization. I do not comment on organizations and individuals.
Please read my writings again. They are a purely and totally knowledge-based article - the arts and science of MLM.
My contention is still the same - not all MLMs are scams.
In scams, the owners would run helter-skelter after making a load, and would disappear.
By anon on Nov 5, 2009 | Reply
Bro,
Well analyzed. Time has proven that you are correct.