Media franchise firm closed down

THE Department of Business has closed down a Manchester company which sold franchise opportunities.

Middleton-based Advanced Media Information was wound up in the public interest by the High Court last week after a probe by the Company Investigations unit of the Insolvency Service.

AMI based at  Hampton House, Oldham Road, offered businesses and individuals an opportunity to sell advertising space on touch-screen kiosks in hotel foyers, enabling guests to access information on amenities such as restaurants and bars.

According to Companies House records the director of the business was 49-year old Philip Smith-Lawrence.

The investigation found that AMI generated a turnover of more than £1.6m, of which £875,000 was paid to the current director, a former director and a senior sales person.

Investigators found that the company failed to maintain, preserve or deliver adequate accounting records to explain these payments. In addition, the director did not cooperate fully with the investigators.

Customers of AMI, who bought the advertising franchises, paid between £10,000 and £20,000 in return for the right to sell advertising space on three company-owned kiosks, or a licence fee of £10,000 for outright ownership of a kiosk.

AMI also received a commission on the advertisements sold. The company marketed itself on its own website, on other websites offering franchise opportunities and through a self-produced brochure “The Virtual Concierge”, claiming that a single kiosk with 60 advertisers could generate an income of around £44,500 a year.

Investigators found that nobody achieved that figure, that some franchisees earned nothing at all from their investment and that others had not even been provided with a kiosk many months after paying their fee.

They also found that franchisees were dissatisfied with the level of training and support received from AMI and that the company had terminated franchise agreements unreasonably.

Investigation Supervisor Scott Crighton said: “AMI promoted itself as something it was not, selling franchises which did not deliver the advertised returns. The Insolvency Service will pursue such companies and take steps to close them down.”