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Term & Condition

The terms and conditions of a multi-level marketing (MLM) company are a set of rules and guidelines that govern the relationship between the company and its independent distributors. These terms and conditions are typically outlined in a legal document that distributors must agree to before joining the MLM program. While specific terms and conditions can vary between MLM companies, here are some common elements often found in such documents:

Independent Contractor Status:

  • Clarification that distributors are independent contractors, not employees, and are responsible for their own business activities.

Eligibility and Enrollment:

  • Criteria for eligibility to become a distributor and the process for enrollment, including any associated fees or requirements.

Compensation Plan:

  • Explanation of the MLM company's compensation plan, detailing how distributors earn commissions, bonuses, and other incentives through product sales and recruitment.

Product Purchase and Sales Requirements:

  • Requirements for purchasing and selling products, including minimum sales quotas, inventory management, and any restrictions on retail pricing.

Compliance with Laws and Policies:

  • Expectations for distributors to comply with local, regional, and national laws, as well as the company's policies and procedures.

Training and Support:

  • Information about the training and support provided by the MLM company to help distributors succeed in their businesses.

Marketing and Advertising Guidelines:

  • Restrictions and guidelines for marketing and advertising, including the use of the company's name, trademarks, and promotional materials.

Income Representations:

  • Guidance on making truthful income representations and avoiding misleading statements about potential earnings.

Termination and Suspension:

  • Conditions under which the MLM company may terminate or suspend a distributor's account, including violations of policies or failure to meet performance standards.

Returns and Refunds:

  • Procedures and policies related to product returns, refunds, and chargebacks.

Confidentiality:

  • Obligations regarding the confidentiality of proprietary information, trade secrets, and the personal information of customers and other distributors.

Dispute Resolution:

  • Procedures for resolving disputes between the MLM company and distributors, including any requirements for arbitration or mediation.

Changes to Terms and Conditions:

  • Notification processes for any changes to the terms and conditions, and the distributor's responsibility to stay informed about updates.

Succession Planning:

  • Guidelines for succession planning, including the transfer or sale of a distributorship to another individual.