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August 13, 2005
Amway Happy in China?
By QBlog in Miscellaneous
Forbes is reporting that China is closer to approving legislation that would allow Multilevel Marketing companies like Amway to more actively participate in direct sales.
The newspaper [National Business Daily] quoted an unnamed senior official with Amway China as saying the company is happy with the approval of the draft law governing direct sales and is working to prepare for a license.
In April, MLM giant Avon won approval to test direct-selling in China while MLM businesses like Amway and Mary Kay were given the cold shoulder. In 1998 China banned direct-selling due to widespread abuse.
Comments
To quote that famous line in "Animal House" (you know - that movie starring James Belushi's better acting brother, the late John):
"Thank you sir, may I have another?"
(I'm sure this post will go over a few people's heads - especially the younger generation.)
Lest anyone forget, or ignore the links provided in the story; Direct selling companies such as Amway, Avon, and Mary Kay ALREADY conduct business in China.
The companies have not been banned from China, but rather operate using a different model, including Avon.
Thank you sir may I have another...
http://www.amquix.info/sounds/thank_you_sir.mp3
So it's a good thing there was a name change...isn't Amway an abbreviated version of "American Way".
That wouldn't sit well in communist China.
But riddle me this...why would the chinese public overpay for substandard product when they already have substandard product at low, low, prices already?!?!?!
"why would the chinese public overpay for substandard product when they already have substandard product at low, low, prices already?"
For the "residual income," of course!
Nice one lawdawg, but seriously.......
Bootleg merchandise is a booming industry over in China. You can buy a DVD of movies that currently in American theaters
(or so I have been told -- wink wink)
So, what happens when the tools [i.e theee major revenue driver in AmQuix] become quickly duplicated and sold on the street?
The business model won't work?
Looks like the kingpins are looking at the popluation of China (can't blame em) but they are ignoring the fact that their major revenue stream is going to get "all fished out" by bootleg piracy.
anyone here?
another IBO> anyone here?
Imran> Yes son, ur dad is here, what's up? Can't sleep?
And many others are here as well. What are you, blind or stupid?
Go to your room.
I am at work, don't let my username fool you. I might be an IBO, but only under protest because of my wife. I am giving her a chance in the bus even though I know it will fail. I just had some questions some one might be able to answer. On the FTC website, it says anyone selling a business opportunity has to divulge personal income reports on the bus and give names of people they sold it too. How come quixtar people don't do that. The FTC also says that any mlm that tells you to recruit more than sale is questionable. the platinum guy my wife signed up under came to our house to personally show us the plan. he said to go find 6 recruits and then go find 6 more. sounds fishy to me
why won't the ftc do anything about this?
another IBO:
I've never heard that, can you show us a link or something to your statment?
Lawdawg, maybe you can shed some light.
Imran, maybe you can just shut up......
http://www.ftc.gov/bcp/conline/pubs/invest/franchse.pdf
The info is under the title use the ftc rule facts for consumers
Imran, like I said before, anybody here?
Another IBO,
The FTC rules you posted are for true franchises. Quixtar people like to pretend they are franchising, and depending on how they present things, they generally are offering a legal "franchise" opportunity.
A Franchise is simply the purchase of a license to market trademarked products or services under a set of contractual guidelines.
However, the cut-off for a "franchise" under the FTC regulation that you are looking at is a $500 sign up fee when you start.
RULE OF THUMB: Any business "opportunity" that costs less than $500 should be distrusted because they are avoiding the federal disclosure requirements.
CORROLARY: Any "opportunity" that costs more than $500 to start and which doesn't give the full disclosures (including lawsuit information) should be reported to the FTC.
CORROLARY 2: Just because the FTC doesn't require disclosures for a franchise with a low sign-up cost doesn't mean you shouldn't.
You should DEMAND the following from anyone claiming to sell you an "opportunity". If they say the FTC doesn't require it for crappy little MLMs. Tell them: "I'm not the FTC. Now cough it up or get out of my face." The required information is:
- Just about everything they know about the officers and directors of the franchisor company including their business training, employment history and criminal history, experience in selling frachises, whether they've been sued in civil suits and any big black marks on their credit history (not just for the company, but for the people who run it)
- A statement describing any recurring funds required to be paid, in connection with carrying on the franchise business, by the franchisee to the franchisor or to a person affiliated with the franchisor, or which the franchisor or such affiliated person imposes or collects in whole or in part on behalf of a third party, including, but not limited to, royalty, lease, advertising, training, and sign rental fees, and equipment or inventory purchases.
- A statement setting forth the name of each person (including the franchisor) the franchisee is directly or indirectly required or advised to do business with by the franchisor, where such persons are affiliated with the franchisor.
- A description of the basis for calculating, and, if such information is readily available, the actual amount of, ANY revenue or other consideration to be received by the franchisor or persons affiliated with the franchisor from suppliers to the prospective franchisee in consideration for goods or services which the franchisor requires or advises the franchisee to obtain from such suppliers.
- A statement describing the material facts of whether, by the terms of the franchise agreement or other device or practice, the franchisee is: (i) Limited in the goods or services he or she may offer for sale; (ii) Limited in the customers to whom he or she may sell such goods or services; (iii) Limited in the geographic area in which he or she may offer for sale r sell goods or services; or (iv) Granted territorial protection by the franchisor, by which, with respect to a territory or area. [REAL franchise opportunities offer some sort of territorial protection or exclusivity to help ensure against saturation. MLM, of course, is franchising for the business impaired, so it actually discourages this sort of behavior]
- A statement of the extent to which the franchisor requires the franchisee (or, if the franchisee is a corporation, any person affiliated with the franchisee) to participate personally in the direct operation of the franchise.
- A statement disclosing, with respect to the franchise agreement and any related agreements: (1) The term (i.e., duration of arrangement) (2) The conditions under which the franchisee may renew or extend; (3) The conditions under which the franchisor may refuse to renew or extend; (4) The conditions under which the franchisee may terminate; (5) The conditions under which the franchisor may terminate; (6) The obligations of the franchisee after termination of the franchise by the franchisor, and the obligations of the franchisee after termination of the franchise by the franchisee and after the expiration of the franchise; (7) The franchisee's interest upon termination of the franchise, or upon refusal to renew or extend the franchise, whether by the franchisor or by the franchisee; (8) The conditions under which the franchisor may repurchase, whether by right of first refusal or at the option of the franchisor (and if the franchisor has the option to repurchase the franchise, whether there will be an independent appraisal of the franchise, whether the repurchase price will be determined by a predetermined formula and whether there will be a recognition of goodwill or other intangibles associated therewith in there purchase price to be given the franchisee); (9) The conditions under which the franchisee may sell orassign all or any interest in the ownership of the franchise, or of the assets of the franchise business; (10) The conditions under which the franchisor may sell or assign, in whole or in part, its interest under such agreements; (11) The conditions under which the franchisee may modify; (12) The conditions under which the franchisor may modify; (13) The rights of the franchisee's heirs or personal representative upon the death or incapacity of the franchisee; and (14) The provisions of any covenant not to compete.
- [THE BIG ONE FOR MLM] A statement disclosing, with respect to the franchisor and as to the particular named business being offered:
(i) The total number of franchises operating at the end of the preceding fiscal year;
(ii) The total number of company-owned outlets operating at the end of the preceding fiscal year;
(iii) The names, addresses, and telephone numbers of:
(A) The 10 franchised outlets of the named franchise business nearest the prospective franchisee's intended location; or
(B) all franchisees of the franchisor; or
(C) all franchisees of the franchisor in the State in which the prospective franchisee lives or where the proposed franchise is to be located, Provided, however, That there are more than 10 such franchisees. If the number of franchisees to be disclosed pursuant to paragraph (a)(16)(iii)(B) or (C) of this section exceeds 50, such listing may be made in a separate document delivered to the prospective franchisee with the prospectus if the existence of such separate document is disclosed in the prospectus;
(iv) The number of franchises voluntarily terminated or not renewed by franchisees within, or at the conclusion of, the term of thefranchise agreement, during the preceding fiscal year;
(v) The number of franchises reacquired by purchase by the franchisor during the term of the franchise agreement, and upon the conclusion of the term of the franchise agreement, during the preceding fiscal year;
(vi) The number of franchises otherwise reacquired by the franchisor during the term of the franchise agreement, and upon the conclusion of the term of the franchise agreement, during the preceding fiscal year;
(vii) The number of franchises for which the franchisor refused renewal of the franchise agreement or other agreements relating to the franchise during the preceding fiscal year; and
(viii) The number of franchises that were canceled or terminated by the franchisor during the term of the franchise agreement, and upon conclusion of the term of the franchise agreement, during the preceding fiscal year.
With respect to the disclosures required by paragraphs (a)(16)(v), (vi), (vii), and (viii) of this section, the disclosure statement shall also include a general categorization of the reasons for such reacquisitions,refusals to renew or terminations, and the number falling within each such category, including but not limited to the following: failure to comply with quality control standards, failure to make sufficient sales, and other breaches of contract.
- If the franchisor offers an initial training program or informs the prospective franchisee that it intends to provide such person with initial training, a statement disclosing:
(i) The type and nature of such training;
(ii) The minimum amount, if any, of training that will be provided to a franchisee; and
(iii) The cost, if any, to be borne by the franchisee for the training to be provided, or for obtaining such training.
- If the name of a public figure is used in connection with a recommendation to purchase a franchise, or as a part of the name of the franchise operation, or if the public figure is stated to be involved with the management of the franchisor, a statement disclosing:
(i) The nature and extent of the public figure's involvement and obligations to the franchisor, including but not limited to the promotional assistance the public figure will provide to the franchisor and to the franchisee;
(ii) The total investment of the public figure in the franchise operation; and
(iii) The amount of any fee or fees the franchisee will be obligated to pay for such involvement or assistance provided by the public figure.
- [ANOTHER BIG ONE] (i) A balance sheet (statement of financial position) for the franchisor for the most recent fiscal year, and an income statement (statement of results of operations) and statement of changes in financial position for the franchisor for the most recent 3 fiscal years. Such statements are required to have been examined in accordance with generally accepted auditing standards by an independent certified or licensed public accountant.
- All of the foregoing information in paragraphs (a) (1) through (20) of this section shall be contained in a single disclosure statement or prospectus, which shall not contain any materials or information other than that required by this part or by State law not preempted by this part.
- All information contained in the disclosure statement shall be current as of the close of the franchisor's most recent fiscal year.
Wow, thanks lawdawg. I knew you would come through.
Is there a way that those last 2 posts can be consolidated and "nailed" to the forum?
Very helpful.............
I'll make a blog post about it this week (with the highlights of the regulation) at lawBlawg.
David Robinson -- you are a straight shooter (as least as straight as one can be in the "biz"), so let me ask you this....
How much of lawdawg's abovestated info. would you be willing to provide to a prospect?
Well, let me ask this then:
How much of that information that Lawdawg provided above is already included and answered in the "disclosure print" that is presented with the new IBO registration process (both online and offline applications), but which the sponsoring IBO just tells the prospect to just "skip and get to the end of" where the IBO then signs on the dotted line, in order to save time and possible arousing suspicion by the new prospect?
David Robinson -- you are a straight shooter (as least as straight as one can be in the "biz"), so let me ask you this....
How much of lawdawg's abovestated info. would you be willing to provide to a prospect?
Posted by: df at August 14, 2005 05:17 PM
df,
I don't present Quixtar as a "private franchise" and really think the term is not appropriate. Lawdawg's criteria is for franchises and I suppose if IBOs misrepresent the Quixtar Business or MLMs in general as franchises, then they should be held to that criteria.
Straight shooting as much as possible:
I do not present a hypothetical matrix.
I disclose the average income as required.
I give out a copy of the required SA4400.
I stress sale of product.
All prospective IBOs are given my full name address, phone number, and email.
I disclose the tool problem. And stress my groups use of non-tools at no cost other than an ISP.
I state the full cost of joining and the recurring renewals at the IBO level, Member level, and client level.
Prospects are given full addresses and phone numbers to different departments at Quixtar.
Refund information is disclosed.
MLMs are not restricted by territories.
I stay away from terms like "investment".
I also disclose 'advertising rules"
And most recently I disclose the non-compete clause.
In answer to MLMscam's question, all legal info required for MLMs is listed on the "sign up sheet". I emphasize "for MLMs", including representation of the nutritional line. And if my prospects want to go line by line on the "sign up sheet" before signing, I encourage it.
I think we all realize that if anybody in the world would have a "bank of attorneys" at their disposal, it would be Alticor/Amway/Quixtar and I follow the rules as they are at the present.
If the FTC or SEC or any other gov't or legal entity rules that the franchise criteria must be followed, I would make adjustments as required.
So in short,( yeah, right) I DO NOT make disclosure BASED on what Lawdawg has stated, although some of it does parallel his criteria.
Sincerely ,
Dave
Dave, can you please explain what the non-compete clause is? Thank you
Lawdawg, thank you for the answer. The ftc site I gave the link too doesn't specify the $500 part. It just says franchise and business opportunity. The business opportunity is the part I thought might concern Q*
Dave, can you please explain the non-compete clause to me. I don't know what it is.
lawdawg, thank you for the answer, the FTC site didn't explain the part about $500. I know Q* is not a franchise, but franchising. I thought the part about business opportunity would apply. after all, that is how it is brought up by IBO's trying to recruit
another IBO,
To save space here, and since you are an IBO with access to the website..click on Build and Manage My Business>Business Rules>Rules of Conduct> section 6.5
Dave
thanks
You can also read about it here:
http://mlmlaw.blogspot.com/2005/02/free-enterprise-and-non-compete.html
Dave, my wife is the IBO I don't currently have access. Can you just give me a brief description of what it is?
The full thing is quoted at the link I posted. Two posts up from this one.
yeah you can read Lawdawg's post, but if you are on the IBOship with your wife then you have access.....is your name on the IBOship?
yes, but I didn't want anything to do with it so I never got the password.
Thank you, I didn't see that link. I now have to ask because my wife sales other products such as avon, tupperware and a few others, if quixtar sales any similar product she can be held liable?
Couldn't you just ASK her for the password so you can view the site? I don't know your marriage situation, but it seems to be a reasonable request.
She should have been informed before she signed up. Certainly her sponsor knew she was involved in other MLMs?
Since she was involved in MLMs previously, BEFORE signing with Quixtar, she may need to call Quixtar Rules and explain the situation, and inform them of her sponsor's lack of disclosure.
Yes. She is competing with Quixtar and breaking the non-compete covenant.
Ease up, Dave. He doesn't want to deal with The Holy Website (TM). Seems like a pretty reasonable position.
Lawdawg,
Seriously , I didn't think I was was being hard, so I don't know why you say I need to ease up.
The man has questions about the rules of conduct, it just seems simple to me to get the password, or even request the password from Quixtar, if he's on the IBOship form and look for himself.
Granted, you quote the rules verbatim on your blog, but why not go straight to the source on this matter, better still, while he's looking at the rules at the site, he may wind up reading more rules, obtaining more info for himself.
my position is that I thought quixtar was a bad idea, but having a good marriage I was letting her do what she thought would be good for her. I can get access, but I am at work right now and can not contact her. We, because I was there at the time, specifically asked the question about selling other products and the platinum who personally came to sign us up and show the plan said there was no problem with her other marketing businesses.
As for other things he said and didn't say, he said the 70% rule only applied to people with a PV of 7500, I don't think that is true. He also wouldn't tell me the comparison of money spent on tools in his group compared to PV for his group. He aslo told me under the eagle program to go and recruit 6 people and then recruit 6 more as fast as you can. That doesn't sound right for a business of distributing products. He also wouldn't show his income tax, which I guess is his personal right, but how come he wouldn't if he was making the money he said a person could make. He also said there was no contract to sign when he was eligible to sale tools. why wouldn't you sign a contract, he had to get a separate business name for the tools business. Does no contract mean that not everyone can sale tools at that level, or that not everyone makes the same? He did say that the income from the tools was good, with a wink, so if it is good at his level how good is it at higher levels? Also, something that didn't seem right, is that under the eagle program there was at least $175 in monthly expenses outside of buying your 150-300 pv a month. I can see that his profit from tools must be good because if someone follows the eagle program he is guaranteed income from the tools, but not as much from the pv.
That is why I don't like the business, and after my wife explores a little more, she will realize that she won't be FREE, and when she starts spending too much, I will be there to set her straight.
There are many other things we can debate. I have given you the benefit of doubt in my conversations. I hope you are as reputable in debate as you are in business. If not, what does it say about you or your business?
david,
That would be illogical. The critics want him to find their information FIRST so they can "save" him. In the critics eyes, anything coming from the corporation or an IBO is garbage and tapespeak, doncha know by now the critics hold the holy grail of all there is to know about quixtar?
If anything, "due diligence" means to a critic is that the guy didn't sign up. If he did his due diligence and signed up anyway- he was brainwashed.
FYI another IBO, you don't need a password to access the rulse in the compendium. You can download the legnthy PDF from here:
http://www.quixtar.com/Documents/IWOV/VIS/010-EN/PDF/compendium.pdf
Warning: it does take a while to load.
Thank you for the link.
I am an educated person, and it really doesn't take much to figure out it isn't the business opportunity it claims to be. Free enterprise is not present.
My brother did it for five years and only lost money. he did get to see some of the country traveling to the seminars. Speaking of which, no one in our family really cared for my brother while he was in the business. As all he did was try to recruit us or sale us vitamins and crap like that. I don't know if you realize, but the tootpaste is not even approved by the American Dental Association. I know that is trivial, but it is just one of many things that stack up to poor business.
another IBO,
I'm sorry I didn't think we were debating. I was just trying to make sure you had the info you needed.
Just for the record, it should have been explained to you that the cost of joining is a mere $42 bucks and anything more is optional.
I got the impression you wanted to debate my not being involved.
the cost for joining quixtar was $42, but her sponsor said she should join BWW too and that was an additional cost. The website you sign up under also said you should buy some product sampler so you know what you would be selling
No debate here...I just was confused as to why you didn't have access to the site, since your wife was in....I understand now that you are at work.
Not sure if anyone will vouch for me or not, but I think the evidence is overwhelming at this blog, my own blog, and others, that I'm the last IBO that would ever encourage you to get involved if you had doubts.
where is this site set up that it is 4 am?
I got one too:
If a lot of people are posting on this blog, why is it then advertised as "just one man's perceptions?" LOL
Control freak aren't we ;)
Michael,
If you'll note, he wanted the text of the rule and didn't have a password, so I sent him to my post, which has the full text of the rule.
Not everything from the corp is garbage. Data showing that you are promoting a saturated pyramid scheme comes from the corporation, after all.
lawdawg,
Why are you so afraid of him going to the corporation directly? Like I said- he doesn't need a password to get the full compendium.
FYI Lawdawg,
here's another article to support your small business theory:
http://www.startupjournal.com/columnists/startupqa/20031222-qa.html
Thanks for the link.
BTW, I'm not "afraid" of him downloading the entire business compendium. He didn't want the entire compendium. He wanted the non-compete rule.
Why are you afraid of my blog, michael?
lawdawg,
LOL nice try to turn the tables. I am not afraid of your blog. The trouble is, most of the time I AM agreeing with you, just having a difficult time accepting it! It's actually nice to see you posting again- for awhile there, you haven't posted for weeks.
There is also a copy here and it is not password protected.
http://www.amquix.info/pdfs/compendium.pdf
Any word on Passport moving to China or any other country where people are less informed and can be easily taken advantage of?
Poorhouse Tony has been awfully quiet.
Maybe he is in "time out" by his upline after he asked if he could get off system and buy tools from EBay....
df, its called work and life. I played golf for 4 hours yesterday - company outting.
Funny you posted this here, since I don't have a single comment on this topic. Hmmm...
You played golf at your sucky J-O-B ???
Where are all the terrible job comments now? That's pretty hypocritical of you...
I got after you here because all of your ambot pals have turned tail and ran away - or they smartened up and dropped out.
That leaves you, my sweet.
So, did you ask your upline if you could buy cds from eBay? I mean, if you are independent, you should be able to buy your 'tools' as you see fit, right?
As promised:
http://mlmlaw.blogspot.com/2005/08/how-to-be-real-small-business-owner.html
No df, you posted here cause you're a f#@%g coward!! I hadn't posted in this whole thread, so you talk sh!t here like the tw@t you are!
Oh, and how am I hypocritical, cause I played in a company golf outting?? Its not like I got paid, I had to work over to make up the hours!!
Not to mention, I've never said I hate my Job - I'd would just rather be doing a dozen other things! Most people would to!
Tony> I'd would just rather be doing a dozen other things! Most people would to!
DI> Of course! Most people would rather be "showing the plan," preying on strangers at bookstores, making idiots of themselves at fuctions... :)
Poorhouse Tony:
Nice reply. Way to skip the big question-
"So, did you ask your upline if you could buy cds from eBay? I mean, if you are independent, you should be able to buy your 'tools' as you see fit, right?"
Tony, just how independent are you in your organization. Personally, I think you have your head up your upline's ass.
ya pidoras, pizu chujie doors, zaabuzte moi url - http://greatpharmacies.com/ a suda pishite pisma i spamte - admass@pisem.net
Good news to Alticor. Real good news.
How about the "Right wing" teachings now? Socialism evil and stuff?
Posted by: Imran | August 13, 2005 6:43 AM