Advanced Media Information Limited (AMI) offered businesses and individuals an opportunity to sell advertising space on touch-screen kiosks in hotel foyers, enabling guests to access information on local amenities such as restaurants and bars.

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.

Businesses and private individuals who bought the advertising franchise 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.

AMI 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 per annum.

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. The investigators 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.

Commenting on the case, 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."