Reading Between the Lines of Your MLM Policies & Procedures
Read More: Although it’s just as important as any contract anyone will sign in their lifetime, many Network Marketers do not read the policies and procedures they sign when starting their business. Whether it’s due to naivety, misplaced trust, or simply not fully appreciating the impact this document can have on their business, their lives, and the lives of their family, the completion of this one act, or lack thereof, can have staggering and far reaching repercussions.
The policies and procedures agreed to as part of starting up an MLM business are not written to protect you, your family, or your heirs. They are not written to ensure you are paid fairly or treated well. In fact, they are not written with your best interest in mind at all. However, they are legally binding, and these legally binding contracts are drawn up by lawyers who are paid by the Network Marketing companies to protect their interests. With the right education, you can learn how to spot these clauses which can be easily identified by certain buzz words and phrases. Some of these words and phrases include:
- “ON-GOING”- (The marketer can never take a break or they are in violation of their contract. This means that an extended vacation, retirement, or even the unfortunately falling ill can result in the loss of the marketers business.)
- "INCREASING” - (The marketer’s duties or responsibilities are always growing larger.)
- “RESERVES THE RIGHT” - (The organization retains the right to the final word, just in case they need it.)
- “AT THE SOLE DISCRETION OF” - (The organization’s judgment is final.)
Is it me or is this starting to sound more like being an employee rather than a business owner?
- “MAY ELECT”- (The organization may decide to change the agreement … at their “SOLE DISCRETION”)
- "INCLUDED BUT NOT LIMITED TO"- (The organization can add on to the agreement at their “SOLE DISCRETION”)
These are just a few but I think you get the idea.
And then there is the grand daddy of them all; “FORFEITURE OF YOUR RIGHT TO A TRIAL BY JURY”. This is covered in a seemingly innocuous statement that starts something like this…
“Any controversy or claim arising out of or relating to the agreement, or the breach thereof between the company and any Network Independent Marketer shall be resolved by arbitration.”
And ends like this…
“ … Independent Marketers waive all rights to trial by jury or to any court.”
Nice, huh? So this means that the marketer has agreed to settle any and all disputes using arbitration with no recourse, regardless of the outcome.
But wait, it gets worser. The statement goes on to say …
“… Nothing in these Policies and Procedures shall prevent the company from applying to, and obtaining from any court having jurisdiction, a writ of attachment, a temporary injunction, preliminary injunction, permanent injunction, or other relief available to safeguard and protect the company’s interest prior to, during, or following the filing of any arbitration or other proceeding …”
In plain English, this means that although you are bound by the decision of the arbitrator, the company is not.
I’m sure you can see how although your compensation plan is important, although you want to represent a product you believe in, although you love your up-line and get all the support you need from them, none of this is important if it can all be taken away in accordance with the agreement you signed.
Now, what about the people in your down line; your friends, family members, and other people who trusted you and joined your business? They are held to these same guidelines. So not only are you responsible for what happens to your own business, you may feel somewhat responsible to what happens to their businesses. After all, you did sponsored them into the business.
Or course, the case can be made that your up-line had the same responsibility to you and failed. And that would be true. But where does the buck stop? When is someone going to stand up and take responsibility for reading and understanding these documents?
To learn more about how to protect yourself, start with Big MLM Truths by Michael Dlouhy. And above all, read your Policies and Procedures "BEFORE" you sign them. It will save you years of failure and frustration.
Jasmeen Blocker
Mentoring for Free
http://jblocker.mentoringforfree.com
Views: 834
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Comments: 21 
About the Author: Jasmeen Blocker
Member Since: 12/29/2009
Company: Mentoring For Free
Industry: MLM
Primary Web Site: http://www.TheMLMBusinessReview.com
GREAT TIP...Know your P&P
So many people don't know where to find them but this is so important.
Would you buy a house before you read the contract?
Jasmeen - You are so very right. I was like most people and did not read my policies and procedures for the first 5 companies I joined. Thankfully I have empowered myself by receiving a network marketing education. Appreciate you sharing with other the key words to look for.
Debi
The P&P Jungle.
Hi Jasmeen, great article, that points out a bit problem for us Marketers. But don't all companies try to protect themselves? What can we do as marketers ourselves, just no sign any contracts?
Much Needed, Often Over-looked.
Great article with to the point statements. Hopefully everyone in BetterNetworker will see this. If you haven't put it out on a blog post, you might want to think about doing it.
Guilty myself....
You are so correct! We owe it to ourselves and to those we bring in to our business to read and fully understand the P&P's of the company we are joining or the company we are in. Thank you Jasmeen!
Think About It
If there are clauses in your P&P's that would have you telling a conventional employer or even Your Spouse "NO" then why would you let an MLM tell you to do it. Great eye opener Jasmeen
WOW...
Before I would not take time out to read Pnp's, they were always pages and pages long and a lot of times with terminology I really didn't understand and didn't care to understand quite honestly. I found out the hard way that knowing what rights you have can either make or break the business you build..
P&P
Thanks so much for this superb article...it is a pearl of wisdom for all of us marketers.
Thanks again
Phil Sebastian
Some gotcha phrases...
...to look out for! Thanks, Jasmeen, for giving us some specific things to look for. In general, though, I'm sure you'd agree that the more pages a P&P contains, the more space the attorneys had to squeeze in those 'gotchas.' Great article! :-D
So what's the answer Jasmeen?
EVERY company reserves the right to change their procedures and policies. The owner of EVERY company protects themselves first and foremost by inserting clauses in the contract. All network marketers are partners with no say (other than the choice to accept the terms and conditions) so what is the answer for network marketers? How can ANY network marketer protect their financial nest egg? There must be an answer. Any suggestions?
If I Just Invested A $100,000 Would I Read My Contract?
It just amazes me that people go into network marketing to make a nice nest egg of 10-50K per month residual yet they don't think it is important to read their legal contract??? It just makes good sense! Thanks for this article Jasmeen, I hope that people will understand the importance of building a business on a solid foundation that can not be shaken.
EMOTION Can Be A Killer....
The companies are smart....they know that people tend to BUY EMOTIONALLY.....so they get in on that emotional HIGH and unfortunately skip some important stuff...So if people approach this like a BUSINESS right from the start...hopefully they can avoid becoming involved with something they may regret in the future.
Think about it....if you were about to start a business as a franchisee with Domino's or Quiznos...or any chain....wouldn't those policies be FULLY UNDERSTOOD before ANYTHING was signed?
Great article Jasmeen!!
Wow!!
Wow, great info. Some would never think to even read their Policies and Procedures before signing or checking on the dotted line. WE have got to read and investigate to keep ourselves and businesses SAFE.
Thanks Jasmeen
Eye Opener
Well Jasmeen,
This is a real eye opener, thank you very much for this article.
I'm make me want to avoid MLM altogether, as I don't believe I've worked with 1 good contract yet.
By the way have you ever came across a good valid contract yourself or do you get the contract restructured?
exactly my point
People need to understand this about there mlm and take it for what it is. And build you inc first
Great Tip
Thanks for bringing this to our attention. I didn't think about reading the policies and procedures when I signed up. I was just excited about starting a network marketing business. Thanks for the timely information.
Time for a Re-Read!
Great advice, Jasmeen. I "sort of" read them when I first joined my MLM. I don't recall seeing anything too terrible then, but that may be because I didn't know what I was looking at!
I guess I have some bedtime reading to do tonight.
Question for All Marketers
When a contract says ON-GOING, that means you have to stay on autoship and never be able to retire? I thought that was the point of MLM was to go big and retire.
So what's the answer?
Good question Joyce. Everybody wants to protect themselves. Network marketers should do that too. Till now they had limited tools. But now they should maintain their own "list"-their organisation. If they have to, they can always take their "organisation" with them, provided they have built that trust and relationship with them. The most valuable asset we are building in network marketing is our "network". As long as we remember that, we will have protected ourselves.
Policies and Procedures
I agree...why would someone not have an in depth look at the P&P of their companies. These are the flat out rules that will make or break you in a pinch. Joyce is right because they have the right to out and out lie to you! In 99% of the cases your only recourse, if you can say this is any recourse, is to simply walk away and forget about it! It all comes down to the bottom line in most, if not all of the cases.
I Agree With You
I agree with everything your saying, but in the end what can any of us do if we want to join an MLM company? Just because you read every word of your P&P, doesn't mean the company will change things for you because you don't like certain parts.
If you think about it, most things are the same way. If you buy a home, rent an apt, buy a car, or insurance, you will have to sign a contract that in the end was written to protect them & not you.
Like I said, I agree, but really what can we do but try to comply as best we can.