“Bar Works has been facing difficulties with its banking facilities”, Managing Director Franklin Kinard tells investors

Bar Works is a company that buys retail spaces, converts them and rents them out as co-working offices. Renwick Haddow, the man behind the Capital Alternatives network of scam companies is a “key figure” behind Bar Works, according to an article on The Real Deal website. Bar Works, meanwhile, claims that Haddow is just a consultant to the company.

Actually, Bar Works is not a company. It’s a series of companies. There’s Bar Works Inc, which was registered in Delaware on 24 July 2015, with two branches, one in California (registered 16 March 2017) and one in New York (registered 27 October 2015). A search on Open Corporates reveals plenty more “Bar Works” companies:

Bar Works has appeared in three posts on REDD-Monitor. The first post takes a look at the Bar Works investment and a related UK-based investment, Pod Works:

The second post looks at Heron Global Partners, one of the companies offering investments in Bar Works:

And the third post features a response from Six and Flow, the company that ran Heron Global Partners’ marketing campaign. The director of Six and Flow, Richard Wood, admitted that at least parts of the marketing campaign were “potentially misleading”. He said that after Heron Global Partners had raised more than £10 million:

Bar Works: Bomb-proof business model or Ponzi scheme?

A large number of companies are offering investments in Bar Works. Bar Works produced a video explaining how the investment is supposed to work:

So the minimum investment is US$25,000, and investors receive monthly returns – as this screenshot from Bar Works USA, one of the UK-based companies flogging investments in Bar Works illustrates:

It’s always good to remind ourselves what Offshore Alert’s David Marchant has to say about investment schemes that show this sort of return:

As an investigative reporter, the easiest financial crime for me to detect is a Ponzi scheme. Any investment scheme with a performance chart that is essentially a diagonal line trending upwards with little or no meaningful variation over many months is a Ponzi scheme and, as such, doomed to failure.

Bar Work’s video tell us that,

The directors at Bar Works have had “what if” scenario analyses carried out by auditors to ensure the robustness of the model. They played out eventualities such as pricing and location, competition, global financial meltdown, property crash, property boom, and yes, even Trump as President. The end result was what the auditors referred to as a “bomb-proof business model” where investors would always be paid and the company will maintain cash positivity even when the White House becomes home to the Donald.

I’ve written to Bar Works and asked them for a copy of auditors’ reports. But I’m not holding my breath.

Difficulties with banking facilities

It seems the “bomb-proof business model” is facing banking problems. In April 2017, Franklin Kinard, Bar Works’ Managing Director, sent the following message to investors:

Over recent months, Bar Works has been facing difficulties with its banking facilities. This has resulted from the large and growing volume of transactions coupled with the broad international client base we have built up.

The result of this has been a significant increase in banking costs which has made it unviable to continue with this method of banking.

We have taken the step to change this now. However, with our new banking partners we are experiencing limitations to the size of daily transactions, volume of transactions and limitations of which countries we can send payments. We realize it is never a good time to change banking facilities and it will inevitably lead to some delays in payments and administration errors however in the medium term it will be worth the investment.

To try to minimize disruption we will phase the change over of our banking facilities which will mean we will send rents/payments in batches as the new accounts are set up with our banking provider. Initially this only relates to outgoing payments.

We are doing all we can to minimize this disruption and we really appreciate your patience and the faith you have put in Bar Works.