Rent-a-Husband allegedly divorces investors
byOct 21st 2009 2:30PM
Home repair contractor Kaile Warren had a rags-to-riches story that was enviable. The former homeless home improver credits "divine intervention" with giving him the idea for a home improvement company and brand name that would ultimately place him on a national stage that included appearances on Oprah, The Tonight Show with Jay Leno, and the CBS Early Show, to name a few.
But according to an investigative report by USA Today, Warren has all but crashed and burned taking more than a dozen investors with him who poured an estimated $4.5 million into his Rent-A-Husband chain of home improvement franchises.
Today, Warren is reportedly more than $3 million in debt with assets of just $145,000, faces investor complaints, one lawsuit, and investigation by the Maine Division of Securities.
Here's a video by USA Today on the story:
Warren, who the paper reports says he intends to repay everyone "in due time," has a story similar to so many other home repair contractor nightmares I've reported on over the years. Seemingly good people who were skilled tradesmen who started businesses, only to find out there's a big difference between swinging a hammer and running a business swinging hammers.
For Warren's part, it seems one main mistep was to put all his eggs, or perhaps more accurately, his investor's eggs, into one planned business deal: a franchise partnership with retailer Ace hardware.
According to USA Today, in 2003 Rent-a-Husband began appearing at Ace tradeshows, where Ace storeowners were encouraged to start franchises. Warren reported that by 2007 Ace estimated that by working together they could bring in $80 million in sales in the first year, and discussions for a business partnership began taking shape, a point Warren seemed to rely on when pitching investors.
But due to the recession, or perhaps some divine intervention on their own, Ace pulled out of the business partnership discussion in March 2008, leaving Warren and his investors with no hope for the planned expansion. Undeterred though, Warren kept seeking new investors, some which USA Today reported say he "preys on women and less-savvy financial types, befriends them, and then pursues any money or home equity of which he becomes aware."
According to Warren, one of the reasons he started the business was to right "the great disadvantages that are oftentimes taken of women by people in the construction trades."
So far, it would seem, he's not doing too well. Rather than right any perceived wrong, this rent-a-husband seems to have done little but divorce women and other investors of the dollars they needed to secure their own financial futures.Tom Kraeutler delivers tips on hiring home repair contractors each week as host of The Money Pit, a nationally syndicated home improvement radio program. He is also AOL's Home Improvement Editor and author of "My Home, My Money Pit: Your Guide to Every Home Improvement Adventure."