Thousands of Women Say LuLaRoe’s Legging Empire Is a Scam
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Uh, your first clue is that you don't usually PAY companies for the privilege of becoming an employee.
https://en.wikipedia.org/wiki/Franchise_fraud
Math on a McDonald's franchise is here-
https://www.mymoneyblog.com/mcdonalds-franchise-cost-vs-prof...
"But if you spend 40 hours a week and only keep tabs on one location, it might really feel like you bought a job."
It's looking like 5-6% net return is what you get which is worse than an index fund and you are working your ass off keeping the business running.
I can't say with certainty, but my impression is that most McDonald's (and other fast food chains, possibly other franchises as well) locations are then owned by semi-regional operators that run a number of franchises. Around here, I know most of the McDonald's are run by 1 corporation. Same with the Burger Kings. It was the same way where I lived previously.
Where margins are still fat, you'll find more one-off franchises. Chick-Fil-A, for example, used to limit "Operators" to one store. Real Estate agents are often franchises.
Franchisees don't make the majority of their income from recruiting other people to become franchisees.
Franchisees don't have "parties" where they utilize social pressure to get people to make sympathy purchases of things they don't want or need.
https://www.ftc.gov/sites/default/files/documents/public_com... [PDF]
It might sound like a subtle difference, but the incentives as a result of both business models are quite different.
Franchise sellers for example WANT their franchisees to operate the franchised business well. It is a "if they make money, we make money" situation. A pyramid seller only wants their agents to grow the pyramid, and they make money from sign ups even if everyone below loses money.
One is trying to create successful businesses, the other is trying to drain sign up fees from as many people as possible.
Not true. Most franchisors make a royalty from sales, but also make a profit from being the exclusive distributor of everything in the franchise - napkins, cups, food, etc.
Your general point is correct though.
I said the franchisee only sells products to consumers/end-users, not the franchise itself. It isn't a chain-sign up situation.
Your point seems to be that the franchise makes money from franchisee reselling, but I never said otherwise...
In the UK, we call them "pyramid scams", which is a much more accurate and damning term.
The wool is being pulled over 0 peoples (in power) eyes. Everyone (again, everyone with power) knows what is going on, including the FTC.
MLMs target those particularly vulnerable to their pitch. They leverage their information asymmetry (almost everyone will lose money in a MLM to the benefit of those above) and as you say, hide what the reality of what the "business" really is with lifestyle fantasy and rhetoric marketing.
I consider myself maybe a little smart in a few very specific areas - that has not stopped me from being outsmarted or taken advantage of at times I and think this is true for most people at some point. Labeling victims as weak minded is a simple way of dismissing the wrongdoing done by MLM actors with far more resources and power than their victims.
What they do should be illegal, and the simple reason it's not is MLMs donate lots of money to lawmakers.
There are whole blogs, podcasts, message boards, etc that are all about showing how multi-level marketing is just a flimsy set of guidelines to be able to legally dodge being busted for pyramid scheming.
> [A]t the national level the job of spotting [pyramid schemes] falls to the U.S. Federal Trade Commission. It primarily does this by checking to see if a company abides by a standard established in the wake of a 1972 lawsuit against a now defunct beauty products company called Koscot. The Koscot standard, as it’s known, says that while a company can compensate people for recruiting new sellers, it can’t base that compensation on how much inventory the recruits buy. Most state laws, including California’s, also require compensation plans to be based on sales.
It’s a simple rule. The DSA requires it of all its members. LuLaRoe didn’t follow it for the first four years of its existence, instead basing its bonuses on wholesale orders. For a while it apparently neglected to track what types of clothing actually sold.
Lularoe is a ....
Lularoe is a cult
Lularoe is a pyramid scheme
Lularoe is a ripoff.
That’s enough information for me.
Fluoride is ...
Fluoride is bad
Fluoride is toxic
Fluoride is poison
"The dose makes the poison" is not something I expect an average Google user to have modeled accurately.
Edit: after reviewing other examples in this thread, my opinion of an average Google user has fallen drastically. Was mostly having a laugh at the fact fluoride salts are generally a thing I avoid, which seems to be the intuition represented by your example.
It shows you what is often searched for which is informative, even if in that case it shows that racism is common (which arguably is informative within itself, albeit depressing).
Personally I like doing "[Something] Vs " to see what people consider are competitors. For example: "hacker news vs " returns:
- "hacker news vs reddit"
- "hacker news vs slashdot"
- "hacker news vs code"
etc.