Bar Works is Renwick Haddow’s latest investment vehicle. Haddow has a history of disastrous investment schemes, the most notorious being the Capital Alternatives network. Bar Works is going the same way, leaving investors worried about where their money has gone.
Last week a concerned investor sent REDD-Monitor the most recent string of excuses about why Bar Works has stopped its monthly payments. It’s posted below in full. The email came from “Bar Works CEO, Franklin Kinard”. True, Kinard is director of the company Bar Works USA/UK Ltd, which was registered in the UK on 27 January 2017. But the director of Bar Works Inc. is Renwick Haddow.
Of course everything Kinard writes in his latest email should be taken with a pinch of salt. There is no way of knowing when Kinard is just making things up, as he did when he told journalist Konrad Putzier that Renwick Haddow was just a consultant to Bar Works.
Here are my comments on Kinard’s latest email.
- Bar Works’ banking difficulties – We knew about this already from Kinard’s previous email to investors. Bar Works’ bankers were JP Morgan Chase. It’s perhaps surprising that a bank of this size couldn’t handle Bar Works’ money transfers. What’s more likely is that Bar Works “bomb-proof business model” somehow didn’t allow for banking fees. Oops.
- Bar Works’ liquidity difficulties – Bar Works’ money is apparently tied up in developing new ventures. If Bar Works wasn’t a Ponzi scheme, wouldn’t the existing properties be generating enough profit to repay investors?
- Payments will resume – If the existing properties aren’t generating enough profit to repay investors, how will adding more properties improve things? Bar Works’ property at Times Square, New York has disappeared from the company’s website. Has it closed down? Have investors received their money back?
- Bar Works’ restructuring – So visitors to Bar Works properties can pay by the hour. Hardly a restructuring. It sounds more like a desperate way of trying to raise cash – effectively competing with Starbucks.
- Kinard wants this fixed too – Well isn’t that nice? Unlike the investors in Bar Works, though, Kinard hasn’t risked tens of thousands of dollars of his own money in what could, at best, be described as a very risky investment. And at worst, it could best be described as a Ponzi scheme.
Until this current disruption, Bar Works payments to leaseholders had been reliable. . . . even predictable. We first encountered payment delays because large banks were nervous about Bar Works making many individual wire transfers around the world. The decision to temporarily halt payments to leaseholders was made separately when interal vetting showed that much of the company’s liquidity was tied up in the expensive process of opening Bar Works locations that were far behind schedule. Our internal examination also showed that liquidity would greatly improve once these new Bar Works open. A succession of these Bar Works will launch by June 1st. For that reason, I believe payments can resume shortly afterward.
What am I basing this on? Bar Works’ restructuring has replaced a single source of revenue with multiple income streams. We will still offer various types of paid memberships. In addition, our locations will sell timed Internet access, like we all have seen at airports. As well, our venues will have partnerships with juice bars, coffee brands, and restaurants.
Those merchants pay fixed rent to Bar Works, along with sharing their profits. And the presence of those establishments produces multiple opportunities for people to spend money each Bar Works.
Bar Works started with a simple premise: sell memberships. However, we learned that the original Bar Works model didn’t fully capitalize on traffic into our venues. Think about it. With the fixed membership system, each location was limited by the number of people the fire department allowed inside at one time. This placed a hard cap on what each site could earn.
Further we weren’t monetizing the professionals who wanted to stop through for a handful of hours to work. Those are the people that Starbucks captured brilliantly. The realigned Bar Works addresses this. Unlike Starbucks, however, the new Bar Works venues are designed for people who have work to do.
We are developing electronic layouts so you can see these sites, Also, we are working to provide more video feeds of the activity in our buildings.
I stepped into the leadership at Bar Works a few months ago, at a chaotic time. It has taken this long for me to learn about financial arrangements and management decisions that pre-date me. I can’t control what Bar Works’ previous leaders did.
However, I have powerful incentive to rectify this because my compensation is heavily linked to company performance. In other words, I get my rewards if the company thrives. So, I want this fixed as desperately as all of you.
As I said before, we are improving the quality and quantity of information that you get. More is coming.
For questions and details, you can email email@example.com, or call Nancy Rodriguez at 646 829 1564.