There is a huge rift between the laws governing Multi Level Marketing and Franchise Regulations. And there is also a huge enforcement gap. In fact there is so much over regulation in Franchising, that the regulatory agencies have really hurt America and entrepreneurship.
Franchise sales people are very closely regulated as to what they can and cannot say. In fact even if something is true they are not allowed to say it without empirical proof, proof which costs thousands of dollars to produce. Yet an MLM company can have people sitting in coffee shops running off at the mouth, telling everyone it is a private “Franchise” and say whatever they want.
You see as real franchisor; to be a franchise, has to pay $35,000 for franchise documents, $40,ooo a year for audits, $25,000 per year to stay registered in all the registration and notification states, yet these MLM folks pay little if anything and call their businesses a “private-franchise” they just made up that word? So why can’t I call my business, which is a real franchise a “Private Franchise Washing Club” and skip all the rules? I own CarWashGuys.com you see. Or can I simply call it a “Franchise Religion” and skip all the requirements, like the Catholic Church, which resembles a franchise even more than a modern franchise does.
We have double standards, as the MLMs do not monitor their sales folks and the government can call a real franchisor a “Fraudster” make up false declarations file them against the founders and their company. A company, which the founder may have worked their entire life to build up; screw that crap. Where is fair? It is all a lie really.
So whereas we can talk about political reform in the mass media all day; what about regulatory reform, bureaucracy reform? How can we call an honest business man a crook and then let 40,000 per day meetings at coffee shops blow smoke up the rears of unsuspecting recruits of MLM companies, using trickery, vagueness, dodging questions, etc. If a franchisor did that in franchising, they would throw them in jail. And even if they did nothing wrong of the sort, well someone could say they did, how could anyone prove they didn’t kick their dog? My dog cannot speak English; can yours? Think on this in 2006.