an advertisement . please help improve it by removing promotional content and inappropriate external links and by adding encyclopedic content written from a neutral point of view . november 2011 learn how and when to remove this template message directbuy type private founded merrillville indiana united states 1971 headquarters merrillville indiana united states key people james l. gagan founder mike bornhorst president products home furnishings home improvement entertainment and outdoor flooring and accessories website directbuy.com directbuy showroom farmington michigan directbuy is a membership buying service headquartered in merrillville indiana . 1 it claims that it is the largest franchiser of members only consumer buying centers in north america . 2 members pay a significant fee which then entitles them to buy merchandise directly from the manufacturer and its authorized suppliers . product categories include home furnishings home improvement entertainment & outdoor flooring and accessories . 3 contents 1 history 1.1 workforce reduction 2 membership terms 3 awards and partnerships 4 criticism 4.1 consumer reports 4.2 west virginia lawsuit 4.3 cease and desist controversy 5 references 6 external links history edit directbuy was founded in 1971 in merrillville indiana 1 by james l. gagan and the first canadian franchise was founded in 1996 . the company was incorporated as directbuy in 2004 . united consumers club ucc remained the holding company for directbuy until december 19 2007 when directbuy was acquired by trivest a private equity firm and allied capital corporation stock symbol ald with 83 million to support the buyout . 2 4 workforce reduction edit in november 2015 directbuy laid off nearly 70 corporate employees due to a workforce reduction effort designed to augment cash flow . fortunately for the northwest indiana region many employees were offered opportunities to return for interviews in call center operations which had been rapidly expanding due to the continued efforts to strategically downsize retail locations . membership terms edit initial membership costs vary by franchise location and have two or three year terms . in 2007 consumer reports reported that memberships at some directbuy locations in the new york area ranged from 4 600 to 4 990 for a three year membership and then 190 a year for the next seven years . 5 6 in 2009 the star tribune reported that enrollment fees are 4 700 and then 99 a year after 30 months . 7 the customer must decide at the time of their open house visit before leaving the showroom whether to join directbuy after receiving a presentation of services . directbuy states that a customer may be shown confidential pricing during the open house and its policy is in place out of respect for our members manufacturers and the retail industry . it also prevents consumers from asking traditional retailers to match directbuy prices . 8 some franchises are offering 30 day trials to certain potential clients 7 9 valid for up to 1 000 in purchases . 10 awards and partnerships edit in 2006 directbuy was ranked 42 on the franchise 50 a list of the top 50 franchises as rated by their owners published by franchise business review and ranked 1 franchise in the miscellaneous retail business category in entrepreneur magazine . 11 in october 2007 directbuy of boston south was recognized for 20 years of participation with the better business bureau and 9 consecutive years without a customer complaint . 12 in 2007 and 2008 directbuy of ottawa received consumers choice award for business excellence in the category of blinds and shades . 13 in 2008 directbuy locations in vancouver and coquitlam won consumers choice award for business excellence in the category of kitchen design and bathroom design . 14 criticism edit consumer reports edit consumer reports 2007 review is that the lack of price transparency makes it hard to evaluate whether you ll save by joining directbuy . but even if you were to save 25 percent on purchases after joining you d need to spend more than 20 000 just to recoup your membership fee . directbuy might save you money if you re furnishing a house from scratch or doing a major renovation but cautioned its readers that since you can t shop around beforehand you ll be joining blind . 15 prices for items such as electronics are higher than available from online retailers ; the deep discounts were found on flooring and high end furniture . customers can not return items cancel orders or terminate their membership . an 8 % handling fee shipping fees and tax are added to the cost of items purchased . some complain of poor customer service and long waits for purchased goods . since directbuy outlets are franchises service varies by location . most outlets have a good record with the better business bureau though some have a poor one or have been suspended from the bbb . 5 6 west virginia lawsuit edit west virginia attorney general darrell mcgraw filed suit january 26 2011 in kanawha county circuit court against directbuy inc. its local franchise and the company s president alleging it engages in unlawful coercive deceptive and high pressure sales practices . the suit also alleges that directbuy pressures consumers with its now or never tactic . directbuy warns consumers that anyone who leaves the premises without joining the club will be banned from joining forever . this threat is false misleading and unconscionable according to the attorney general . 16 17 18 cease and desist controversy edit attorneys for directbuy issued a cease and desist letter to consumer blog infomercialscams.com for unwarranted and defamatory attacks posted about directbuy by visitors to the blog and asked that the comments be immediately removed . 19 20 the letter itself was forbidden to be posted online by the directbuy attorney citing ownership of the copyright to the letter as justification . public citizen claims that this is a common method to counter that problem by scaring recipients into keeping quiet and that the letter is a good example of the many meritless threats that companies hurl at their online critics in an effort to silence dissent 21 and subsequently posted the cease and desist letter on their website along with their response to the letter . 20 22 23 references edit a b about directbuy . directbuy . retrieved 2007 10 16 . a b trivest partners acquires directbuy inc. represents first investment for trivest fund iv press release . miami florida trivest partners . 19 december 2007 . buy directbuy products direct from the source . directbuy . retrieved 2 january 2012 . allied capital invests 83 million in largest u.s. franchisor of consumer buying centers press release . allied capital corporation . 12 december 2007 . retrieved 2 january 2012 . a b fichera chris . with directbuy it will cost you a lot to save . consumer reports . retrieved 2007 10 16 . a b cole kirsten 2006 05 16 . big membership fee doesn t always mean big savings . wcbs tv . archived from the original on 2007 10 11 . retrieved 2007 10 16 . a b ewoldt john 22 july 2009 . directbuy not up front about cost of membership . retrieved 2 january 2013 . directbuy faqs . directbuy . retrieved 2008 07 10 . briefly in business directbuy unveils new membership terms . the burbank leader . 16 september 2009 . retrieved 2 january 2013 . directbuy free membership . directbuy . archived from the original on august 22 2009 . retrieved 2009 09 13 . directbuy inc. franchise information . entrepreneur media inc. two decades of doing right by customers . pr workzone . 20 october 2007 . consumers choice award latest distinction earned by directbuy of ottawa . the ottawa citizen . 28 june 2007 . retrieved 2 january 2013 . dubin steve 30 july 2008 . directbuy locations in vancouver and coquitlam win consumer s choice award for kitchen and bathroom design . vancouver coquitlam victoria and okanagan bc . retrieved 2 january 2013 . with directbuy it will cost you a lot to save . consumerreports.com . 2007 09 13 . retrieved 2010 03 16 . ag s office files lawsuit against directbuy inc. . wtrf tv west virginia media holdings llc . 26 january 2011 . archived from the original on 18 july 2011 . attorney general mcgraw sues directbuy inc. and local franchise over pressuring and unfair sales techniques press release . charleston west virginia state of west virginia office of the attorney general . 26 january 2011 . dickerson chris 16 january 2011 . mcgraw s office files suit against directbuy . the west virginia record . leonard justin 2007 10 05 . direct buy attorney threat letter . infomercialblog.com . retrieved 2007 10 16 . a b directbuy attorney cease and desist letter as published by public citizen pdf . retrieved 2007 10 16 . beck greg 2007 10 05 . don t post this cease and desist letter or else . public citizen . retrieved 2007 10 16 . public citizen response to directbuy cease and desist letter pdf . retrieved 2007 10 16 . popken ben 2007 10 09 . donning copyright cloak directbuy forbids posting of cease and desist letter sent to consumer opinion site . consumerist blog . retrieved 2007 10 16 . external links edit official website retrieved from https en.wikipedia.org w index.php title directbuy & oldid 738636131 categories franchisescompanies based in indianacompanies established in 1971hidden categories articles with a promotional tone from november 2011all articles with a promotional tone navigation menu personal tools not logged intalkcontributionscreate accountlog in namespaces article talk variants views read edit view history more search navigation main pagecontentsfeatured contentcurrent eventsrandom articledonate to wikipediawikipedia store interaction helpabout wikipediacommunity portalrecent changescontact page tools what links hererelated changesupload filespecial pagespermanent linkpage informationwikidata itemcite this page print export create a bookdownload as pdfprintable version languages add links this page 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