SOME MORE DEBUNKING OF THE "PRIVATE FRANCHISING" ;-)) CONCEIT....

A reader, SNOTURKY, and I have been having a running debate about this "Private Franchising" ;-)) conceit, that Quixtar/Amway IBOs use. I kind of lost my patience ;-) with him, on my last post, MORE DEBUNKING..., and to be perfectly honest, I was fairly condescending.... Snoturky said as much, in his comments, which I am posting here. I would like to offer my SINCERE APOLOGIES!

BUT, having said that, I STILL maintain that this Quixtar/Amway model is inherently unethical, and unprofitable for most people. So, without much further ado, here are Snoturky's comments and my rebuttal. Again, Snoturky's comments are in red, and mine are in blue and black.

• This is becoming increasingly troublesome, as you are starting to become condescending and disrespectful. I will not continue this discussion if this does not stop immediately. May I also request that you please stop writing in all caps and bold? It does not change it's meaning to me, and I'm sure I'm not the only one that thinks it is very iritating.
• >>>>Wouldn't you agree, Mr.Snoturky? Oh, I forgot, it was ;-)) Mr.Principle.
• Speaking of principle... We need to talk more about it. Your entire argument has been avoiding it and focusing on specific people or situations.
• Let us escape from all of these specific examples and talk only of principle. Anyone can tailor a specific example to justify anyone's opinion.
• You say that no one would pay the prices that are put on the products. First of all, whether or not you would pay the price of a specific product has nothing to do with whether or not another person would. Just because you do not see any value in 1 product versus another, does not mean that other people don't. So you really need to drop that - You don't know if people would buy them or not. I can tell you for sure that they do - several non-IBO's at full retail, and several at discounted price. If you were right about nobody ever wanting to buy them, this business would have been gone a long time ago. However, since we are not talking about specifics, but only principles, we will leave that portion out of the argument.
• Also, your argument about being a commodity does not hold water. If they are all the same, why are there so many different laundry detergents, cleaners, etc., all at different prices in any given store? The expensive ones would go out of business according to you.
• Can you believe that an extremely profitable business exists, where people put water and sugar into containers and sell them for several hundred percent more than production cost? Who would buy that over-priced stuff???
• Ever heard of Red Bull? It costs about twice as much as the one I stated above, and you get around half as much. Amazingly profitable business.
• Can you believe that people get paid millions of dollars to play games? (Football, baseball, ...)
• The point is, that some businesses that you don't think should work, do. Some products that you don't think should sell, do.
• The most basic explaination of the business:
• A person owns distributive rights to some products. He is able to sell them to other people, and is able to grant other people distribution rights. He gets royalities from those he sets up as distributors. He must sell a certain amount of product to non-distributors in order to make a profit.
• Remember what I said - There are plenty of IBO's that don't have a single down-line. They make all of their money from customers choosing to purchase his products over all of the other products and prices out there.
• All of the other stuff you try to throw in there is opinion or circumstantial stuff that does not effect the model itself.
• There is one thing that is making me angry and I have to address it:
• >>>>Boy, who is this Saintly ;-)) Upline of yours? I am dying ;-)) to meet him! Heck, I am half tempted to run away and join ;-)) your Quixtar cult - obviously I would be signing up under you.... Do the Diamonds in your LineOfSponsorship know what he is ;-) doing? Trust me, don't let word reach your Diamond, he will be very ;-)) displeased. And, by no means, should this information reach the low-level IBOs in the other LOS' because they will all quit their LOS and run to sign up underneath you - and that would make their ;-)) Diamonds mad at you....
• You are making me really mad by making accusation about my friends and me, without even knowing us! That's not called arguing. That's called flaming - when someone has no real argument and just tries to take cheap shots.
• I will have you know that my diamond does the exact same thing as my upline did for me, and I do for my downlines. Both of them are Christians (most of the team are) and are generous people.
• >>>>Is it just me, or do other people find it strange that every single Quixtar IBO who visits these critical sites, claims that THEIR LOS is as virtuous ;-)) as Mother Teresa??
• Let's see... could it be because THEY ARE? Is it possible that maybe, you don't know everyone, and that you are making un-fair generalizations and accustaions? Is there a slight possibility that everyone in the business is not a crooked terrible person?
• At first, it seemed as though you were going to be someone who really knew how to argue fairly and be subjective. You are starting to disappoint me.

This is becoming increasingly troublesome, as you are starting to become condescending and disrespectful. I will not continue this discussion if this does not stop immediately. At first, it seemed as though you were going to be someone who really knew how to argue fairly and be subjective. You are starting to disappoint me.

Like I said in my comments on my MORE DEBUNKING..... post, I agree. I was condescending. Was it meant to make a personal attack on you? Absolutely not. But when you have listened to, and read comment after comment after comment, by Quixtar/Amway apologists on the critical websites, where they almost NEVER address the specific criticism, but attack the messenger, or make vague analogies that have no substance, or talk about something totally irrelevant..... You tend to have a short fuse.... Sometimes it feels like you have to be condescending to get the message across....

I mean, you definitely sound like a very intelligent guy, BUT you seem to not even try to use that god-given intelligence! You seem to be hell-bent on trying to prove that this 'business' is similar to a real franchise, when clearly it is NOT. You haven't addressed a single one of holes that I poked in the whole 'Private Franchising' analogy, on my MORE DEBUNKING.... post.

Here are some of the issues that I brought up earlier, but you did not care to address:

• So far, I have NOT heard a SINGLE CD/Tape that provided CONCRETE INFORMATION/TRAINING to run this so-called business. SAME with Seminars/Rallies/Meetings. And I have been to quite a few of each. Can YOU show us ONE?
• ONE EXAMPLE of Concrete Information/Training?

• McDonald's Franchisees have to go to Hamburger University ONLY ONCE, and the cost of the training is ONLY A FRACTION OF THE SALES FOR A STORE.

• You DON'T need hundreds of CDs to explain "THE PLAN". IF the business were TRULY LEGITIMATE (in the sense that ALL the participants would be able to make money, not just the top level IBOs who are making money off of the SO-CALLED SYSTEM), then you WOULD NOT NEED SO MUCH MOTIVATION. You wouldn't have to listen to the same thing over and over and over again, and pretend that you are getting 'Training'. Showing the "PLAN" alone would be sufficient to convince a prospect to sign up.

• PLUS, McDonald's/TacoBell WOULD NEVER, NEVER, EVER GIVE INDIVIDUAL FRANCHISEES A CUT OF THE TRAINING SYSTEM COSTS!!!!
• What about this System CONFLICT OF INTEREST? Consider this. If ALL the NEW IBOs are informed that top-level IBOs DO MAKE MOST OF THEIR INCOME FROM THE SO-CALLED TOOLS/SYSTEM, NOT QUIXTAR/AMWAY BONUSES, do you think they would blindly use the System without questioning?? And, YOU DO KNOW THAT FACT ABOUT SYSTEM INCOME, DON'T YOU?? How do you address that?

• Ray Kroc/McDonald's Coprn. is the FranchisOR. Now, let's assume that you OWN a McDonald's store. You/McDonald's-Store-Owner are the FranchisEE. The FranchisOR, i.e. Ray-Kroc/McDonald's-Coprn. grants you, the FranchisEE, Franchise Rights and collects a royalty, off of your sales.
• McDonald's Coprn., i.e. the FranchisOR, also makes sure that there won't be any Competing FranchisEEs, within a specific geographic region around your store. i.e. McDonald's Corpn., the FranchisOR will make sure that there will NOT be any unhealthy competition between you and another FranchisEE, and thus your business can survive and prosper.
  

And read this thread, the disclosures required by the law, for a FranchisOR. Would Quixtar be considered a LEGAL FranchisOR without these disclosures?

http://mlmlaw.blogspot.com/2005/08/how-to-be-real-small-business-owner.html

Would the Quixtar Corpn. say that they are a FranchisOR ? IF THE CORPORATION DID SAY THAT, DON'T YOU THINK THAT WOULD BE ILLEGAL?

SO, DO YOU NOW ACCEPT THAT THIS SO-CALLED 'BUSINESS' HAS NOTHING TO DO WITH FRANCHISING?

If you still insist on calling this a 'Franchise', how am I supposed to respond? Tear my hair out in frustration? Honestly, that is how I feel.... Like I said, your 'overall' articulation, seems to indicate that you are a pretty intelligent guy - BUT you seem to be insistent on NOT thinking for yourself! You spout the same, lame, 'Private Franchising' conceit, and other 'Tapespeak' like "think like a business owner, not a consumer". When I see an Intelligent Guy like you, drinking the 'System-Kool-Aid', and tying himself in knots to justify a scam, I kind of feel that a sarcastic tone, a condescending tone, is the ONLY way to get the message across!!!

May I also request that you please stop writing in all caps and bold? It does not change it's meaning to me, and I'm sure I'm not the only one that thinks it is very iritating.

Like I mentioned earlier, I am a man on a mission..... When I used bold letters, or capitalization, I am merely trying to emphasize that particular word/phrase/sentence in a whole paragraph, so that the reader walks away with that image in their mind, hopefully well-entrenched. But I will definitely try ;-) to tone it down a little - I will give you that ;-) much.

Think of it this way. The italics - I am trying to emphasize. The bold - I am trying to shout ;-) a little. The big font - I am shouting pretty loudly. The large font - I am screaming ;-) in your ears.

>>>>Wouldn't you agree, Mr.Snoturky? Oh, I forgot, it was ;-)) Mr.Principle.

Speaking of principle... We need to talk more about it. Your entire argument has been avoiding it and focusing on specific people or situations. Let us escape from all of these specific examples and talk only of principle. Anyone can tailor a specific example to justify anyone's opinion.

Oh, boy, here we go again!!! How do you expect me not to be condescending? Have you even read any of my posts? Almost every one of my posts, is about general, broad principles rather than any specific example.

My second post, HOW I GOT INTO THIS...., was about the ETHICS (or the LACK thereof) of forcing people to buy OVERPRICED COMMODITY PRODUCTS so that you can make a commission off of their purchases. It was also about my contention that it IS UNETHICAL for a few people to profit off of the loss of many people - which is a virtual certainty because the majority of the people will be left holding the bag, at the bottom of the pyramid. Thirdly, I contend that the majority of the Tools/System King-Pins, DISTORT the Scriptures, for their own material gain; and in the process have wrecked many homes, friendships, and finances. This argument would be the SAME, if these problems existed in any other MLM, too.

My third post, "PRIVATE FRANCHISE"?? YEAH, ;-)) RIGHT!, was aimed mainly at a broad debunking of the Private Franchising CONCEIT that is used by Amway/Quixtar IBOs. That this so-called 'business' is NOT a Franchise. That a TRUE FRANCHISE has RETAIL SALES to consumers who are not in the same business. My second contention was that REAL TRAINING for franchisees usually happens only once, and that the costs are a very small fraction of their sales. My third contention was that REAL TRAINING for real franchisees, is exactly that - REAL TRAINING! That there is NO CONFLICT OF INTEREST, because the Franchisor is primarily in the business of making money by getting a cut of the ACTUAL RETAIL SALES OF THE PRODUCTS/SERVICES by the Franchisee. That the Franchisor does not try to rip off the franchisees by shoving down the Franchisees' throats, a SCAM, disguised as a so-called 'Training System', that is TOTALLY WORTHLESS! Mind you, these arguments are the same, whether you consider a McDONALD'S, a WENDY's, a HOLIDAY-INN, or a HOWARD-JOHNSON! i.e. THESE ARGUMENTS ARE NOT SPECIFIC, BUT A BROAD EXPLANATION OF THE FRANCHISING CONCEPT.

One of my SPECIFIC arguments was to counter a specific example that you brought up - "That the Quixtar/Amway Corpn./the-business-model itself is legitimate, irrespective of the actions of a few people". I countered by giving a SPECIFIC argument, that these abuses were NOT ISOLATED, and that they had been continuing with knowledge and complicity of the corporation's owners for over 25 YEARS.

My fourth post, MORE DEBUNKING OF...., was basically a more in-depth exposition of the broad, general principles I explained on my third post. Secondly, I made the broad, general contention that, since the Amway/Quixtar Plan is sold to prospects on the promise of Residual Income, one should only consider repeat Monthly-Consumables, in the calculation of the so-called 'Residual Income' (which is a myth, but I will get to that later). And that, since these monthly consumables are basically COMMODITY PRODUCTS, and ARE OVERPRICED, it would be UNETHICAL, to sell this FLAWED BUSINESS MODEL (that an artificial loyalty to Quixtar Products is created in the hope of getting that so-called 'Residual Income') to somebody.

My fifth post, "INSIDER"s OBSESSION...., was primarily aimed at a broad, general exposition of the 'Retail Sales Rule', and its importance in determining the legality or the lack thereof, of ALL Multi-Level Marketing Schemes, including Quixtar/Amway.

NOW, SNOTURKY, can you show me how my "entire argument has been avoiding it and focusing on specific people or situations". Can you tell me how I "tailored a specific example to justify anyone's opinion" ?

You say that no one would pay the prices that are put on the products. First of all, whether or not you would pay the price of a specific product has nothing to do with whether or not another person would. Just because you do not see any value in 1 product versus another, does not mean that other people don't. So you really need to drop that - You don't know if people would buy them or not. I can tell you for sure that they do - several non-IBO's at full retail, and several at discounted price. If you were right about nobody ever wanting to buy them, this business would have been gone a long time ago. However, since we are not talking about specifics, but only principles, we will leave that portion out of the argument.

I kinda feel sorry for you ;-).... but you just put your foot into your mouth again... How are prices/economic-value of products sold by the MLM, NOT a general principle to consider in evaluating an MLM????!!!!

Secondly you accuse me (WRONGLY, as I just proved above) of using specific examples to twist something out of context, and then you do EXACTLY THAT!! Listen to your statement - "First of all, whether or not you would pay the price of a specific product has nothing to do with whether or not another person would. Just because you do not see any value in 1 product versus another, does not mean that other people don't."

When did I ever say, that MY acceptance/rejection of the ECONOMIC-VALUE of Quixtar's products is the deciding factor???

What I said (I am REALLY tempted ;-) to be condescending here, but I am holding my tongue) was this.

Okay, buddy, let me try to get this through your head. "Your Opinion" and the "Opinions of people I know" don't mean jack in the Real World. The REAL test is - IS there broad acceptance of the product in the marketplace outside of the Quixtar IBOworld? What is the drop-out rate of new IBOs, greater than 67% right? IF the Quixtar Products were such great quality and they were cheaper, how come these IBOs didn't stay on as 'Members' to take advantage of these products??? Quixtar IBOs trot out this argument ONLY when they are Quixtar IBOs, they don't even look back once they have quit the business.

Now, tell me, how can I continue to be patient with you? CLEARLY, you are an Intelligent guy, but you are trying so hard to justify this scam, that you are tripping over yourself.

Here are the latest Quixtar Statistics, from the Corporation's data itself.

Quixtar Q12 Business Statistics reported in August 2004 and October 2002

• 1. 67.8% of IBOs who registered in 2003, did not renew in 2004.
• 2. The average IBO had just 0.23 members and clients registered.
• 3. Only 18.4% of IBOs registered even one person.
• 4. The average IBO had 38.5 PV/month. (100PV is shown in the plan)
• 5. 65.6% of IBOs never once attained 100 personal PV in the previous 11 months.
• 6. 21.5% of IBOs had a ditto delivery profile
• 7. Only 1.9% of Members and Clients had ditto delivery profiles.
• 8. The average PV point cost $2.70.

Look at the first statistic. Why do those 67.8% IBOs drop out? Why don't they stay on as IBOs, or even as 'Members' (it's cheaper at $20), to take advantage of all the great products and the great values ;-)) ? See the second statistic - the average IBO had only 0.23 members and clients registered. And remember, 'Members' can buy the products at the same price as IBOs. Clearly, only clients can be considered 'Retail Customers', since they are the only people off of which you are making a 'Retail Profit'. So, assuming only half of that 0.23, are clients, the average IBO had only 0.11 clients. See the fourth statistic - the average IBO had only 38.5 PV/month. And, see the fifth, and in my opinion, the most DAMNING STATISTIC - 65.6% of IBOs never ONCE attained 100 personal PV in the previous 11 months.

And, these statistics have been REMARKABLY consistent over the years. Some Critic estimated, using the Quixtar numbers, that over 5 million people must have joined and quit Amway/Quixtar, over the last 25 or so years. 5 MILLION DROPOUTS!!!! Don't you think that is a significant, BROAD rejection of the economic-value of Amway/Quixtar products in the market-place outside of the people involved in the business??

Allow me to quote the great Scott Larsen:

"What are all these statistics of low average IBO sales, and high turnover really saying? It says to me that the typical consumer can't find enough deals or superior value through Quixtar to shift their buying habits from where they currently shop."

Also, your argument about being a commodity does not hold water. If they are all the same, why are there so many different laundry detergents, cleaners, etc., all at different prices in any given store? The expensive ones would go out of business according to you.Can you believe that an extremely profitable business exists, where people put water and sugar into containers and sell them for several hundred percent more than production cost? Who would buy that over-priced stuff???Ever heard of Red Bull? It costs about twice as much as the one I stated above, and you get around half as much. Amazingly profitable business.

Yes there are many brands of deodorant, tooth-paste, toilet-paper etc. out there. BUT, the price differences are insignificant, one brand is usually NOT 30-40% higher-priced. Think about 'Russet-Potatoes'. Everybody would agree it is a commodity, right. Does that mean, there's only ONE farmer producing potatoes? No. But if any farmer tries to charge a 30-40% premium for his produce, he would go out of business, right?

Again, I am not disputing that SOME Amway/Quixtar Products might be better value for the money. But since we are talking about the so-called 'Residual Income', we need to focus only on 'repeat, monthly consumables'. And is that 'basket of goods' better value for the money, than the other choices available in the general retail market? Clearly, as I proved above, the Quixtar Corporation's Statistics themselves say,

LOUDLY AND CLEARLY - NO!!!!

Can you believe that people get paid millions of dollars to play games? (Football, baseball, ...)The point is, that some businesses that you don't think should work, do. Some products that you don't think should sell, do.

Again, I hate to repeat this, and I am getting a little tired of repeating myself.... But, I NEVER SAID ANYTHING OF THE SORT! Please, please, read my posts.

The most basic explaination of the business:A person owns distributive rights to some products. He is able to sell them to other people, and is able to grant other people distribution rights. He gets royalities from those he sets up as distributors. He must sell a certain amount of product to non-distributors in order to make a profit.

Yes, but HOW is it a Franchise? I HAVE CLEARLY EXPLAINED ABOVE, THAT THIS IS NOT A FRANCHISE!!!! This is another one of those deceptions that is used to gain credibility by association.

It used to be, they were called Amway 'Salesmen'. Then, after a whole host of bad publicity, they became Amway 'Distributors'. When it morphed into Quixtar, they became 'Independent Business Owners' (IBOs) ;-)).... Now, they are 'Private Franchisors' ;-)) ????

The BEST term for this industry is clearly MULTI-LEVEL-MARKETING. PERIOD. But, when the MLM term got such a bad rap, they then started calling it NETWORK-MARKETING. Then it became AFFILIATE-MARKETING.

And then, some genuis ;-)) figured out a new term to use, to exploit some borrowed glory - 'Private Franchising'. Quite a stretch ;-)), that. But, hey, wear a suit and tie, have a few Ambot/Quixbots also wear similar attire, rent a small conference room in a Hotel, and have an 'Open Meeting'. Then talk about McDonald's or some other Respectable/Legitimate Franchise, and say that your little scam is exactly like McDonald's. Voila! Instant respectability!

If the new prospects sitting there, don't have any background in business, or if they are wearing the 'Residual Income' Blinders, they will get suckered in!

That's the idea, right??

Remember what I said - There are plenty of IBO's that don't have a single down-line. They make all of their money from customers choosing to purchase his products over all of the other products and prices out there.

I am not going to repeat myself. I think I have already clearly proved that the marketplace, the vast majority of people outside the business DO NOT find Quixtar/Amway products a compelling economic value.

All of the other stuff you try to throw in there is opinion or circumstantial stuff that does not effect the model itself.

?????????!!!!!!!!!! And you expect me to be, NOT CONDESCENDING????!!!

There is one thing that is making me angry and I have to address it:

>>>>Boy, who is this Saintly ;-)) Upline of yours? I am dying ;-)) to meet him! Heck, I am half tempted to run away and join ;-)) your Quixtar cult - obviously I would be signing up under you.... Do the Diamonds in your LineOfSponsorship know what he is ;-) doing? Trust me, don't let word reach your Diamond, he will be very ;-)) displeased. And, by no means, should this information reach the low-level IBOs in the other LOS' because they will all quit their LOS and run to sign up underneath you - and that would make their ;-)) Diamonds mad at you....

I will have you know that my diamond does the exact same thing as my upline did for me, and I do for my downlines. Both of them are Christians (most of the team are) and are generous people.

>>>>Is it just me, or do other people find it strange that every single Quixtar IBO who visits these critical web-sites, claims that THEIR LOS is as virtuous ;-)) as Mother Teresa??

Let's see... could it be because THEY ARE? Is it possible that maybe, you don't know everyone, and that you are making un-fair generalizations and accustaions? Is there a slight possibility that everyone in the business is not a crooked terrible person?

Okay, Snoturky, I APOLOGIZE, I agree I was out of line, in that I made assumptions about you and your friends without knowing you. But consider this, see where I am coming from:

I live in a large metropolis, one of the biggest cities in the US. As I mentioned in the comments section on my second post, I have been prospected, on average, once every two months. EVERY SINGLE TIME, I saw the same curiosity approach, the same lies, the same half-truths, the same deceptions..... And that has consistently been my experience, for the last 5 years or so. And the evidence on the Critical Websites overwhelmingly suggests this is the norm, rather than the exception.

Can you blame me for being a little trigger-happy?? But, like I said, I am willing to give you and your team the benefit of doubt.

BUT, don't YOU have a problem with these crooked guys 'ruining' your 'business'?? Don't you think it is unfair for honest people like you, to be maligned, and lumped in the same category with these crooks, for no fault of yours? What have you done about it?

Have you complained to the Quixtar Corporation about it? And even if you do, what do you think are your chances that the Quixtar Corporation will do something about it? Good luck!! The corporation's owners have known about it for 25 YEARS, but STILL HAVEN'T DONE ANYTHING ABOUT IT!!!

NEVERTHELESS, I have two suggestions for you.

Write a detailed letter to the Corporation, expressing your unhappiness. Tell other IBOs to do the same. I won't guarantee ;-) you that the world will change, but see what happens. I myself, am writing a complaint about my experiences at the two 'Open Meetings' that I attended recently. I will be posting a copy of that letter here. Why don't you do the same, post a copy of your letter here, after you send it to Quixtar?

ALSO, How about you and your team join the 'QUIXTAR BACKBONE PROJECT', initiated by Eric Janssen of QBlog??