Several companies have statements like,

[Company] may terminate a distributor for any reason or no reason at all.

If you read that, I hope you are smart enough to run the other way.

But a lot of companies like to hide what they tell you. Put it so you don’t understand it when you read it. Like this.

[Company] reserves the right to suspend or terminate any Distributorship at any time for cause…

Usually they tell you right before this, lot’s of reasons they could terminate you. And those reasons usually make sense. Then they add the one above.

There is one word in there that you may not understand. A simple looking word.

Keep in mind that your mlm policies and procedures are a legal contract. What does that little word “cause” mean in legal terms?

From Black’s Law Dictionary, page 212 of the 7th eddition, says “CAUSE – Something that produces an effect or result”.

Now you have a little word that could be real trouble. When you sponsor someone, does that produce and effect or result? When you buy product, sell product, fail to sponsor someone, and on and on, don’t those things all produce and effect or result? Of course they do.

So the real result is that everything you do, right or wrong, produces an effect or result and becomes cause for your termination.

CAUSE doesn’t look so harmless anymore, does it?

Cause kind of means we can terminate you because we want to. Now isn’t that what the first statement I showed you above says but in words you can easily understand?

You don’t have to doom yourself to failure the day you sign up for a company. Do your home work. Reading and understanding mlm policies and procedures is just a small part. You only have to do it one time with your company. When you make the right choice you will have a home for life.

We can help. Read Success In 10 Steps.

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Did you miss the gotcha on line one?

This little one.

All Independent Business Owners (IBOs) are required to read, understand and comply with ALL [Company] IBO Polcies and Procedures..

Do you really think they put it in your contract, your policies and procedures, for no reason?

Why would they want you to read and understand your policies and procedures anyway?

Well, they don’t really want you to read them because you might actually understand them and realize what a bad deal you are getting into.

Fail to read them and now you didn’t comply. They gotcha.

But if you agreed that you read them and understood them then when you show up in court, it is an open and shut case. You lose. Because you understood what a bad contract you were agreeing to comply with.

Really, you can’t see why they are setting you up from day one?

My recommendation is to stop everything you are doing. Stop wasting your money. Stop working to build something that they want to take away from you? Get an education. Find companies that have reasonable policies and procedures. Fair ones. Learn about The 5 Pillars To Success.

Don’t be one of those people doomed from the start because somehow you think you can make more money in network marketing with no education or skills than what you have ever made in a job where you where trained to succeed.

Read Success In 10 Steps Join Mentoring For Free.

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Why are you being asked to check the boxes?

The boxes usually say something about you agreeing that you have done something. Checking the box is how you acknowledge that you agree.

The things you are agreeing to may be that you read your terms and conditions and agree to abide by them. Or it could be that they have multiple boxes. One for terms and conditions, another for policies and procedures and still another about the compensation plan.

I have found that most people check these boxes and continue with out even reading why they are checking them. If they do read the statement then almost no one looks at the document that the statement refers to so they have no idea what they are agreeing to do.

If you were to read the terms and conditions that your are agreeing to abide by then you would likely find a statement like this one.

I have carefully read and agree to comply with the [Company] Policies and Procedures and the [Company] Marketing and Compensation Plan, both of which are incorporated into and made a part of these Terms and Conditions.

So not only did you agree by checking the box that you had read the terms and conditions but those terms had the statement from above. I think it is pretty clear what they ask you to agree to do.

You have violated the contract with your new company’s contract on the day you signed up because you did not carefully read the documents. Did you?

And they tell you in your policies and procedures that if you violate any part of this contract that you can be terminated. So you just set yourself up for termination at any time in the future.

So, Are You Already In Trouble?

Learn to stay out of trouble. Join Mentoring For Free. It’ free.

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]]> http://mlmcompass.com/policies-and-procedures/are-you-already-in-trouble/feed/ 2 http://mlmcompass.com/policies-and-procedures/the-mlm-dream/ http://mlmcompass.com/policies-and-procedures/the-mlm-dream/#comments Sat, 21 Jun 2008 16:51:04 +0000 Don Standard http://mlmcompass.com/?p=111 The MLM Dream and Your Policies and Procedures. What do they have to do with your MLM Success?

Throughout the world of MLM, there is one dream that almost everyone has in common. They have the dream to build a big MLM team with a big income and then retire from their MLM responsibilites and continue to earn that big check.

Does that sound like you, or people on your team?

In the almost 30 years that I have been in MLM, this dream of retiring with a big MLM income has been a big selling point for bringing people into the business. Thirty years ago it may have been true. But is it still true today?

Check out this example from a company’s policies and procedures. In this policy, IMC is the company’s designation for their distributors.

IMC Supervisory Role. Any IMC who sponsors other IMCs must fulfill the obligation of performing a bona fide supervisory role in the sale or delivery of product to the ultimate consumer and in the training of those sponsored. Each IMC must have ongoing contact and communication with their sales organizations and also provide management supervision. Examples of such supervision may include, but are not limited to: written correspondence, personal meetings, telephone contact, voice mail contact, electronic mail contact, providing training sessions, accompanying individuals to Company training, and sharing genealogy information with those sponsored. Each IMC should be able to provide evidence to the Company semiannually of his/her ongoing fulfillment of sponsor responsibilities.

I see similar statements in almost every company’s policies and procedures that I read. They may be worded a little differently each time but all say the same thing that you don’t want to hear;

YOU CAN NOT RETIRE AND KEEP YOUR INCOME.

Let’ start by looking at the word “ongoing”. It means current, staying current, being actually in process, moving forward. With the word “ongoing” in this statement then you can’t ever stop doing what they are saying you must do. How can you retire and still keep doing all of this? For that matter, how can you get sick and keep doing everything?

Do companies actually enforce a policy like this? Don’t ask your upline, they will always say of course not, don’t worry.

Why did the company put it into their policies and procedures if they don’t intend to use it? Give the CEO a call and ask him to remove it since they say they would never use it. They will not do that for you, because of course, they intend to use it. That is why they included it.

The young lady I met last year found out the hard way. She was pregnant. And half way through the pregnancy her doctor prescribed bed rest. No activities. No going to meetings. Ninety days later the company invoked a policy like the one above. They terminated her and she lost the team that she built.

Now if the company is going to steal your dream of building a big income and retiring, right from the beginning with your contract, then why would you bother to build the company? The only answer that I have is that you didn’t read your contract, your policies and procedures. You don’t even know the rules.

To learn more about policies and procedures and how not to get taken advantage of by MLM companies, then I suggest that you plug into this blog and join Mentoring For Free.

Yes, there are companies who will not steal your dream.

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The Famous #9 Enroller Policy!

As far as I know, this policy can only be found in one company’s policies and procedures. So there is no need for me to name the company. Just look in your company’s policies and procedures to see if you have it. Do be aware that they may move it from the 9 position to another position which they have done at least once already. I have removed the company name and replace it with [Company].

9. Enroller Policy
Should an individual personally enroll someone and place that individual under another person in their downline, [Company] reserves the right of the personally enrolling individual to later regain that placed individual for other placement options should the situation deem necessary. This policy is enforced at the discretion of the [Company] Corporate Sales Manager.

Let’s take a look at this policy. First you should know that the company encourages distributors to place personally sponsored people somewhere other than their first level. There is nothing wrong with doing so in my opinion as long as the person being placed agrees to it.

Now notice that the policy is talking about these people that have been placed in the distributors downline. Now the really bad part. Later the company can take those people and place them somewhere else should the situation deem necessary.

What I know from watching the company, is that placing them somewhere else means outside of the distributors downline. That means the distributor loses this personally sponsored person and those in the personally sponsored persons downline. They have been stolen from the distributor and possibly legally since he agreed to the policies and procedures.

Should the situation deem necessary must mean when the Corporate Sales Manager wants to make more money because they always get moved to help the income of the Corporate Sales Manager.

Then the final sentence let’s you know who gets to decide how this movement of distributors will work. You guessed it, enforced at the discretion of the [Company] Corporate Sales Manager. No wonder everyone that gets moved ends up under him.

It probably wouldn’t surprise you after seeing this to learn that this company makes the new news often at sites whose mission is to protect distributors from companies like this one. And most of the news has nothing to do with their policies and procedures.

It sure wouldn’t take much research to avoid a company like this one.

Learn more by reading Success In 10 Steps.

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Here goes, and as usual I have removed the company name and replaced it with [Company] so I wouldn’t hurt any ones feelings.

Retail Sales Receipts
Federal law requires that you provide each customer with a Retail Sales Receipt at the time of sale. [Company] requires that you use authorized Retail Sales Receipts that can be purchased from [Company] for each sale of [Company] products. A sample is included in your Distributor Kit.

In addition, you must keep copies of each Retail Sales Receipt you issue for one year after the date of the sale. [Company] may, at any time, request that you provide your Retail Sales Receipts to [Company] in order to verify retail sales for a given pay period. If you fail to provide Retail Sales Receipts to [Company] within 10 days of a request, your Distributorship may be suspended or terminated, at the sole discretion of [Company]. Submission of falsified Retail Sales Receipts will be grounds for termination of your Distributorship.

First paragraph, no big deal but I wonder how much they make selling distributors those sales receipts that they can not get from any other source.

Second paragraph is a big big problem. The requirement to keep those sales receipts comes from the company, not the law. They want to be able to verify a distributor’s retail sales because distributors have agreed to do retail sales in order to receive compensation from the company earned in the compensation plan.

If distributors can not provide these retail sales receipts then company can take actions against the distributor. I forgot to mention that the reason I chose this particular company’s policies is because they have taken action against distributors. The action; termination. The distributors that I know about were all top distributors in the company.

This company just stole the distributors checks.

Could it happen to you? These distributors never expected it just like you probably would not. Hey one of these guys couldn’t comply because his house blew away in a hurricane. It’s funny that the IRS had no problem working with him when they learned all his paper work blew away along with his home, but this company terminated him.

They wanted his check the same as they wanted all the other terminated distributors checks.

It would really be ashame to put all your blood sweat and tears into a company for years and create that nice recurring income only to have the company steal everything from you.

This is not the only company to worry about.

This is not the only policy to worry about.

This is a well known company and there are many other well known companies with questionable policies and procedures.

Ask yourself, why is it in the contract, your policies and procedures, unless they are planning to use it. If you see it in your contract, ask the company to remove it. After all, if they don’t want to have that policy in the arsenal of weapons to terminate distributors then they would gladly get rid of it. Right?

I hope I got your attention. Read your companies policies and procedures and those of any new company that your consider joining. Not all companies have these bad statements in their policies.

There are a lot more of these to cover so come back for more. Better safe than sorry.
Plug into Mentoring For Free for company evaluation training. Just a part of the free a to z success training available to you.
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There are two basic reasons an MLM company has disclosure statements.

One is to dazzle and confuse you with charts and graphs into believing that they have the best program of any network marketing company on the planet.

When you see this type of disclosure and you have been around network marketing for a while then you should be able to recognize that they are telling you that the success rate of distributors in their company is way beyond what you have ever seen before. It will appear that almost everyone who joins makes lots of money.

All they are doing is reporting partial information. The favorable part. I have had distributors from one company that believe after looking at their company’s disclosures that one our of every 30 distributors will make $10,000 per month. That of course means that you would have to make more than $300 off of each of those 30 distributors each month. Since the average distributor does not even approach $300 of personal volume each month, then that would not be possible. Companies don’t pay more than 100% back to distributors. The numbers average around 50%. And this is MLM, you don’t make all the money from everyone in your downline. Others share those profits too.

The good news is that if you do have some success with the company then it is just a matter of time till you learn that they have deceived you. What else are they willing to lie to you about?

The second reason for disclosures is companies that are required to report this info because of a court order.

One company in this position has two disclosures they use. The first will bore you to death if you take the time to read it. They really don’t disclose anything. They just call it a disclosure. When you finally find the very hard to locate second disclosure it starts with the same worthless info. They hope you will quit reading before you get to the real disclosures that they are required to disclose.

When you finally do get to the real stuff you will see a statement that says, “In 2006, 59% of all IBO’s received no income.” Each year about this time the new numbers get published and they are usually a little worse that the previous year. Ask yourself, if you were looking at joining this company, would you join just knowing this one fact? I don’t think you would.

Out of all the distributors that I have talked to that have been in this company, not one of them had ever seen this till I showed them how to find it.

It gets worse though. I went to a meeting at the local company provided location. I was told there by several people doing well in the company that I could reach a certain level in under two years and be making $10,000 per month. But in the company disclosures it clearly says that the average income and time required to get there is much different. The disclosure says that the distributors that actually achieve this level of success, make less than $500 per month on average and takes them an average of 47 months to get there.

Would you join a company if you knew going into it, that if you are one of the successful distributors, it would take you on average 47 months to earn and average of just $500 per month.

You wouldn’t join would you?

So the next time you are looking for a new company, look for disclosures. If you find them then they will either be there to dazzle and confuse you about the truth, or they will be there because they must be and they really don’t want you to see them.

If you are in a company, I suggest you check to see if they have disclosures.

Plug into the free MLM training at Mentoring For Free and learn how to evaluate companies. It will save you years of failure and frustration. That is just part of the a-z free MLM training you will receive.

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I read Success In 10 Steps and joined Mentoring For Free three years ago and learned how to put myself in the best possible position to be successful in network marketing and it has really paid off. It starts with choosing the company that puts you in the best possible position for success.

So when I was searching for my last network marketing company, the following clause could not be in my new company’s policies and procedures and should not be in yours either.

“Distributors must renew their Agreement each year…”

“The Company reserves the right to reject any applications for a new distributor or applications for renewal.”

When I checked, had I seen this type of statement in the company’s policies and procedures, I would have quit reading and rejected the company as a possibility for me.

Why? Because the company has given themselves a way to

get rid of a distributor every year on the distributors anniversary with the company and they don’t even need a reason to reject the distributors renewal. They can take away everything I build. The contract says they can do it and you better no agree to it.

Most of you don’t know a single person who has ever been terminated from a company and if you do the company told you that they terminated them because they were bad, but you don’t have the distributors side of the story.

I know many people who have been terminated. I know the stories behind the terminations. It not only happens in this industry, but the numbers of terminations appear to be rising dramatically. Companies have learned to use the contract to take advantage of unsuspecting distributors.

If you agree to a contract with a clause that allows a company to dump you just by not renewing your contract then you are setting yourself up for big problems. It may never happen to you. It may never happen to anyone you know.

But the point is, that you want to put yourself in the best possible position for MLM success from the beginning. And that starts with reading the company’s policies and procedures, and not joining a company that puts your future in jeopardy. This business is hard enough for most people as it is.

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The policy below could present a serious problem to your MLM success in the future. This is right from a major network marketing company’s policies and procedures. I changed the company name to [company]. If you think it could be your company, just go to your policies and read 10.3 but also be aware that when the company does a revision they may put it in a different section.

Read it, then we can take a closer look at it.

10.3. AGREEMENT TERMINABLE AT WILL
You may terminate your relationship with [company] at any time by providing a signed written notice to [company]. [Company] may also terminate the relationship with you (including any partnerships, corporations or other entity) at any time by providing written notice. You or [company] are not required to have any reason, nor do you or [company] have to claim or prove any cause to terminate this relationship. If and when the relationship is terminated, you shall have no claim against [company] nor any right to claim or collect lost profits, lost opportunities or any other damages. Termination will result in the loss of all benefits as an [company] Independent Consultant.

So what do you think? It starts nice. You can terminate your relationship with the company. If you are making money, why on earth would you want to do that? Of course you would not. If you have any recurring income, then even if you change companies you don’t want to quit, if they are sending you checks because the checks would stop coming if you terminate.

Fair is fair, or is it?

They let you terminate your relationship with the company so they want to be able to terminate the relationship with you. Why would you ever accept that? They can terminate you and your business is gone. Are you really willing to work for years to build a business that can be taken away that easily.

How easy is it for them to terminate you? First, they just told you that they only have to send you written notice. Next they tell you that they don’t even have to have a reason to do so.

Then they follow everything up with a statement to be sure you understand that after they terminate you, your business is history. No more income for you.

So let me ask you again, do you really want to build a business that can be taken away this easily?

You may be thinking why would they ever terminate me. There are many reasons this could happen. But remember they don’t need a reason to terminate you. Maybe their reason is nothing more than to keep the money they pay you and they really just don’t want to tell you they are greedy. And of course they may never terminate you. But they have set things up to make it easy if they want to.

Think about this. If they never thought about the possibility that they may want to terminate you and never even have to tell you why they did it, then this clause would not be in your contract. Instead they have been thinking about it. The clause is evidence.

There are many similar clauses to this one in MLM company policies and procedures. So you are not off the hook here eve if you don’t have this exact clause in yours.

Now for those of you who don’t think these clauses ever get used to terminate people, here are just a couple examples that I know about.

One guy I know helped promote his product so well that the company finally said, we don’t need to pay you guys any more. They put the product in retail stores like Walmart and terminated all of their distrubutors.

One company decided to terminate about twenty-two of their top distributors to show extra income for this public company. Twenty-two people terminated with a combined income of one million dollars per month. Wow, the clause worked.

To make it worse the company executives that did this are still out there and you may be in the company that terminated these people or you could be in a company where one of these executives has moved to. I think your possibility of future termination is much higher than most peoples. What do you think? I think it is easier the second time around for them.

I could go on and on, but you get the picture. Terminations happen all the time and it is a growing concern for distributors in our industry. You really need a contract that does not allow the company to get rid of you without even a reason and they only have to notify you.

To get a great education for free on companies and their policies and procedures, check out Mentoring For Free.

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These policies and procedures are your legal contract with your MLM company. You really need to know what you are signing and how it may affect you long term.

So let’s start with an easy one. This one is found in a lot of policies and procedures so instead of naming a company I have inserted [company] where you would normally see a company name.

[Company] expressly reserves the right to terminate all Agreements upon thirty (30) days written notice in the event that it elects to: (1) cease business operations; (2) dissolve as a corporate entity; or (3) terminate distribution of its products and services via relationship marketing.

When you read this statement, what do you feel. I feel that the company is already making plans for when they fail to succeed as a network marketing company. They may want to cease business operations. What will that do to you as a MLM distributor for the company? They may want to dissolve as a corporate entity. What will that do to you as a MLM distributor for the company? Or they may want to terminate distribution of products and services through network marketing. What will that do to you as a MLM distributor for the company?

In all cases that leaves you without a business and since you are agreeing to give them this right, you have no recourse if they take it. They are putting a plan into place to take away your business.

And look at the 3rd option again. They may take away your business and stay in business themselves, marketing the product are service by some other means. I know someone who built a network marketing business to an income of $100,000 per month. Then the company ceased marketing as a network marketing company and went into traditional retail, selling the product at stores like Walmart. The distributors did such a great job of promoting the product that everyone knew about it and they where no longer needed. So the distributors were left with nothing while the company continued to earn. I have another friend who was making about $46,000 each month when his MLM company did the same to him.

To enjoy MLM Success you will want to read your policies and procedures and avoid companies that are planning in advance for you to fail due to this contract. We will cover many statements from companies policies and procedures in this blog, taking them in easy to understand pieces. Be sure to come back for more.

Those of you who get the free ebook, Success In 10 Steps, or sign up for the free
Mentoring For Free MLM skills training will be offered additional training on the subject.

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