Hey, for those of you who don’t know who I am. My name is Dustin Martorano of Lake County Boot Camps and formerly was the owner of ChiTown Boot Camps.
“Why you’re reading from a teleprompter Dustin?”
“So You Admit You’re THE Owner of “Chitown Boot Camps”
Today, I’m gonna tell you how one man’s greed caused a boot camp company with 3 locations, 180 members, and 8 employees go out of business.
“Now You Say Someone else’s Greed Closed It Down But You’re The Owner”
About a year and a half ago, I met Sam Bakhtiar at a fitness marketing event in California. We got to talking and discussing the possibilities of opening a boot camp in the Chicago area.
You and Neil the other partner you owe money to talked about it and asked me to be a part of it. I never wanted to be a part of it and definitely made it known that I will not be moving to Chicago
After a few weeks of phone calls, we had formed this business with a few other partners but I’m not gonna mention their names.
You mean the other partner (Neil) that you still owe money to?
Anyhow, each of us has detailed responsibilties that we were supposed to do in order for this business to function the way it’s supposed to function.
It’s hard reading from the teleprompter isn’t it?
Sam’s responsibilites were to manage the business and to ensure it’s success through his management and marketing capabilities.
For the record when Neil and I were partners of ChiTown it didn’t go out of business
While after about a year of running this business and doing most of the work myself, I realized that Sam was never going to do any of the work.
Did I ever tell you he was going to work “in the business”? Leave LA to come to Chicago?
He made several critical errors over the past year and a half that eventually led to me having to close down this business.
We all made mistakes sure but when Neil and I were involved we were in business. YOU went out of business 6 weeks after purchasing ChiTown from Neil and I which you still owe a large chunk of money. See the agreements below
The first of those errors happened last December, when he ran a paid in full campaign mistakenly to our entire list. This paid in full campaign was only supposed to be ran to our past clients and prospects, but instead through his carelessness he sent this email for an extremely discounted boot camp to our current client list which caused us to lose 35 EFTs.
Totally true. I made a mistake. But let’s look at the numbers. 35 people signed up for $600. 35X$600=$21,000.00. All 35 were month to month clients converted from daily deal sites with an average retention rate of 3 months (price of $97/month) So that means they were actually worth 35people X $97/month X 3 months = $10185.00
SO WE MADE MONEY ACTUALLY.
ALWAYS KNOW YOUR NUMBERS
We went from… I’m not sure of the exact numbers but it was a $600/year paid in full. Then, over the next two months with the cash we had made from those paid in full he paid dividends to myself and the other partners and pretty much completely drained our bank account.
I didn’t hear you and other partners complain about getting a large chunk of cash. Didn’t you THANK me up and down when you got a fat check?
Furthermore the account wasn’t drained all the checks cleared, employees got paid and we never had debt when Neil and I were partners. What did you do in 6-8 weeks after you took over?
I actually think you planned to run the company to the ground so that you don’t have to pay your partners and clients back.
But that’s just a theory
So, that was the first big mistake. Did I mention he didn’t do any work, sporadically will send out a text marketing promotion to our list which our company ChiTown boot camps had to pay for even though he was a partner in the business. That was the first mistake.
Business lesson: One company shouldn’t pay for another. The books should always remain separate.
A company shouldn’t pay for PERSONAL things like your “parking tickets and taxes”
Then, about six months later after we had basically broken even for six months continuously with me going to the boot camp locations, each about once a week and him not doing anything. Sam Bakhtiar got on the phone once a week to basically bully and boss around all the other partners and to demand results. When, in reality he wasn’t doing his end of the job, again his end of the deal was he was supposed to market our company.
Bully and boss around? We all had a weekly share holder meeting and we exchanged ideas and formulated a game plan.
We were breaking even because of horrible retention rate.
Retention rate = responsibility of the person in direct contact with the clients = Dustin
While the fact was 99% of our clients came from my marketing efforts, my groupon and social living contacts and through referrals.
Your contacts ha…..
FACT: Here is when I introduced you to my contact at Living Social. They wouldn’t run “Lake County Boot Camps” if it wasn’t for me.
Copy and Pasted Email below notice the date I hooked you up
On Mon, May 14, 2012 at 10:19 PM, Sam Bakhtiar wrote:
“My partner Dustin from Chicago also has some boot camps in the Lake County area and would like to talk to you about getting featured?
Please if you can reach out to him.”
After about six months of not making any money, but still spending 3 days of my week training in this business I got fed up. And, basically bought out all the other partners in the business including him.
So you mean to tell me that you bought a business that wasn’t making any money?
Fact: At the time you purchased ChiTown from Neil and Sam Chitown was making 5K/month NET PROFIT. Neil can verify that.
You’re too smart to buy a business that doesn’t make money aren’t you?
Now, I bought out 2 of the other partners before I bought out Sam and they understood that in order for this business to run they couldn’t ask for a huge buyout. There wasn’t barely any money in our bank account. We’re barely breaking even, but we had enough cashflow through the 180 members for the business over time to be built back up. When it came time for me to go on buyout negotiations with Sam, he was extremely pushy for a huge buyout which his actions, the work he had done in the business weren’t the money he wanted to have.
Neil (the other partner) and Sam had the same buyout. Dustin owes Neil more money that he owes Sam. (see below signed contract for both Neil and I)
Dustin owes Neil $13,000.00
Dustin owes Sam $11,500.00
Then, once we finally agreed to a buyout, he went into our bank account and took the last $6000 that we had, I believe it was $6000, no it was $4500 and he paid himself and me and the other partners with dividends completely draining our bank account which I believe he did on purpose basically setting it up where in I would have to pay him out of pocket for his buyout instead of me using the profits we had earned through ChiTown boot camps which would have been the only way we could have maintained and sustained the business.
Fact: Sam and Neil never wrote a check or a business debit/credit card.
Business Fact: You don’t buy out partners with their share of the profits. You buy them with your share of the profits.
Fact: Business was maintained and sustained when Neil and Sam were partners.
We went through this whole buyout negotiation whatever and he expected some pretty unrealistic buyout terms. He wanted a substantial amount of money and he wanted it by a certain date – by end of the year.
Fact: If it was unreasonable and substantial money you didn’t have to take it. BUT YOU DID AS A MATTER OF FACT YOU INSISTED
After about a month of running like this, after the buyout we were still breaking even with the business. I had contacted him to let him know by email that the business can no longer be run like this. There are certain options, either one – you waive the rest of the buyout or defer the rest of the buyout over a longer period of time so that it could be managed I can salvage the business.
FACT: below is the EXACT part of email Dustin send to Neil and Sam. Notice the date
Sent: Wednesday, September 26, 2012 10:46 AM
To: Neil V; Sam Bakhtiar
Subject: Re: Closing Down Chi-Town Boot Camps – Urgent Need Reponse ASAP Please
“As you guys know, Chi Town Boot Camps has taken a turn for the worst. (under Dustin’s ownership)
We are making a loss of at least $2500 each month. Our EFTS are really bad and losing 6-8 clients every week. (again under your ownership)
I cannot continue to run the business this way and am thinking of shutting down Chi-Town asap by the end of the day tomorrow.
(you don’t just wake up one day and shut down the operation. You didn’t see it coming? clients didn’t get notified)
So here is the deal, I cannot pay the balance of the money that is due to you both. there is just no money left to do so.”
Or, two – you take over the business then no one owes anyone any buyout money and you don’t even have to buy me out. The whole idea was I wanted to ensure that the 180 people that were training with us would have a place to work out and that the 8 people that were employed by us, most of whom this was their only source of income, to have a job.
Did you think that Sam and Neil want to take over a business after you ran it to the ground?
If you cared about the clients why didn’t you give them more notice?
Sam never responded to my contact to him and I was forced to at the end of the month two days ago to close the business.
Why did you need a response from Sam and Neil if you are the owner and bought them out?
If that were just the end of the story, things wouldn’t have been so bad. And, what he did was he breached his buyout contract where he could not contact our members, he could not contact our staff, and he had no right to anything.
FACT: Read the contracts signed. Found at the bottom.
He kept the email list and sent out an email to all the members of ChiTown boot camp and our prospects and past clients with my information telling them to call me personally. He put my first and last name and my cell phone number, telling these clients to contact me personally for their refund and then at the bottom of the email, forwarded the email that I had sent him with the options of how I propose that we move forward with the business which in my eyes was a completely malicious attempt to sabotage my personal reputation and to basically force me out of business.
I absolutely emailed all clients making sure they get a refund since the business was shutting down overnight. No one was answering the main phone.
People deserve better than that.
What Dustin Forgot To Mention:
He ran a living social deal same day he was shutting the operation down. Proof ===> http://www.livingsocial.com/cities/1705/deals/434368-30-day-unlimited-boot-camp-program
Here is an emergency email from living social rep to Sam. See the date (copy and pasted)
===> Sent: Thursday, September 27, 2012 8:46 AM
I hope that you’re doing well. I wanted to reach out to you as we received an urgent email from someone named Neil that said that we needed to close down the live deal for Chi Town Bootcamps that is currently on LivingSocial. We were told that as of yesterday, they were forced to liquidate and are closing their doors. I don’t feel comfortable about terminating the deal and beginning the refund process until I hear from you directly given that you have always been my contact for Chi Town Bootcamps and I have never spoken or heard of Neil, the person that reached out to us. If you could please email me back and help clarify the situation, I would appreciate it. I certainly hope that everything is okay with your business and that this is just a misunderstanding. Please let me know. Thank you!
I wanted to let the world know that if you’re gonna gonna go into business with Sam Bakhtiar, you should be very wary. Sam Bakhtiar is a malicious, cutthroat, self-centered businessman who will act nice to your face and will promise things and in the end he doesn’t want to do any work.
Dustin you sabotaged your own rep by shutting down a business without proper notice to your clients. Under your youtube video here is what one client said: “Did you not take a single business? class? Quit with the blame-game AND REFUND YOUR CLIENTS!!!!!!!!
– Katie McCarthy”
Fact: Here is a copy and pasted email why Dustin lost the business.
From: Dustin Martorano
Sent: Wednesday, September 26, 2012 6:52 PM
To: Neil V; Sam Bakhtiar
Subject: Shutting Down Chi-town Effective Tomorrow
It is with great disappointment that I will be shutting down Chi-town Boot Camps effective immediate tomorrow.
John Fonseca from Belmont location has stopped our evening classes and raised the rent. I Just received notification of this a few hours ago
All he wants to do is boss others around and if it comes between you and him, he’s always gonna choose himself and leverage all his resources to make sure that he never loses.
Dustin did you think anyone will choose you over their family?
He cares less whether we had in fact a 180 boot camp members and 8 employees who needed their jobs. Sam Bakhtiar is a millionaire. The people we employed barely made $1200 or $1500 a month and again they needed this job, but due to his greed and selfishness these people no longer have any employment, our boot campers no longer have a place to call home to workout.
In order to keep this video from going any longer than it already is, I just wanted to put the truth out there and let everyone know. All you fitness trainers know, all our clients know why we shut down ChiTown boot camps. The real reason behind the closing of ChiTown boot camps, his name is Sam Bakhtiar who lives in Chino, CA. I’m not going to stoop as low as he and include his personal cellphone number in this video. I just want to get on this video to clear things up. Let everyone know that I did everything I could to save this business, and if a few things were changed or modified, there would still be a thriving boot camp in the city of Chicago with 3 locations. And, I wouldn’t be sitting here making this depressing video.
So, I thank you for watching this video. For taking the time out of your day. I just want to break everything down for you and let you know why in essence there is no ChiTown boot camps anymore. And who is directly responsible for this. Thanks for watching this video, this is Dustin Martorano and that’s all.
Don’t know how he can say that with a straight face. Great acting…
And here’s the Notice of Withdrawal Agreement…
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