Case Closed CD "The Whole Truth About Network Marketing"
Designed for the most devout MLM skeptic!
LEGAL CONSIDERATIONS
I've found that in the vast majority of cases where new MLM companies are launched only to face legal and regulatory challenges, the founders were genuinely and sincerely unaware that they were doing anything wrong. For example, it's very common to see start up companies with poorly designed, or perhaps just poorly worded, compensation plans with qualifications that are based on the number recruited as opposed to the amount of sales volume created. Here's what I mean: Let's say the personal volume requirement to be an active distributor is $100 per month. To reach the rank of Gold Director the distributor must be active themselves, of course, and personally recruit five active distributors, regardless of how much personal volume each of them generate. The way the plan should be designed is to require at least $600 in personal team volume, that's a combination of your personal volume and the personal volume of all those you personally sponsored. Knowing that an active rep must achieve at least $100 in personal volume, this essentially accomplished two things: The rank of Gold Director can still be met by Bob who sponsored five active reps with a total of $500 PV, but now he doesn't outrank Sue who might have only recruited four others, but those four achieved combined sales volumes of perhaps twice as much as Bob's five did. So not only is the plan fairer, but it's now based on what state and federal regulators love to see: product sales volume – not how many people were recruited!
Here's a real life example. A doctor recently contacted me to assist in her start up of an MLM company based on a single product – a rubber shoe insole, which would wholesale for $3.00 and last up to 90 days, with strategically positions bumps that would message certain spots on the bottom of the foot, resulting in the prevention or even curing of various diseases. Including heart disease and cancer. She claimed to have already had initial consultations with two other consultants and although she didn't provide any specifics, she did say that their upfront retainer fees were higher than she expected. She went on to say that there was never any mention of either the financial ramifications of multilevel marketing a single $3.00 product that would be purchased by the consumer only 3 or 4 times a year, nor was she informed that her marketing strategy blatantly violated both FTC and FDA regulations. She did say that one of the consultants did suggest that she have her concept reviewed by an attorney. However, she firmly believed this wasn't necessary because, after all, she was a doctor. She was allowed, she believed, to make such claims as long as it was based on actual evidences – a condition which she believed was satisfied by the alleged "thousands" of personal testimonials she had collected and one study she personally conducted on 15 people. And she was dangerously wrong.
I'm not an attorney, and I can't give legal advice, but I certainly can identify what aspects of your program should be reviewed by an attorney, and I can clearly explain why. I can then direct you to what I strongly believe, based on many years of observation and personal experience, are the very few, very best network marketing attorneys practicing today.
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