MLM Distributor Rights

Distributor Bill of Rights Draft

Draft by Dr. Keith Laggos, Money Makers Monthly

With input by Rod Cook and Mike Sheffield

1. Distributors have a right to own and operate their own independent contractor business. The company and the government should recognize that a distributorship is an independent small business with all of the rights and tax benefits of any independent small business.

2. Distributors' personal business relationships should be honored and protected. Distributors' downlines that are personally sponsored and personal retail customers are part of the distributor's business. No restrictions should be placed on any legitimate business relationship, regardless of a competing company being involved or not. A distributor has the right to expect that the company will protect his personal relationships (personally sponsored distributors and customers) from being approached by the company itself, subsidiaries of the company or any other distributor of the company or of the company's subsidiaries.

3. Product usage by a distributor's personally sponsored downline and customers is considered as retail sales of that distributor and is commissionable for that distributor and his or her upline. The use of the company's products within the sales organization is called "internal consumption." Whether a distributor or a customer receives a discount is immaterial, as in the case that factory or wholesale outlet sales are still considered as retail sales.

4. Distributors have a right to a fair and balanced contract including protection of being terminated without cause. This means that the terms of the contract should protect all parties and provide fair recourse. Distributors invest a lot of effort, time and money to build their business. Companies should not be allowed to terminate a distributorship without cause. When a company terminates a distributorship it often, through the same action, removes the distributor's financial ability to challenge that decision. The company must provide a system for a fair, independent recourse.

5. A distributor is an independent contractor and therefore has a right to use any legitimate method to build and market his or her business. This includes the right to use the company's name as long as the fact that they are an independent contractor is clearly stated.

6. There cannot be any restrictions on the distributor's spouse or family conducting any other legitimate business of their choice. The company has no right to condition their distributors' business based on any third party that is not a signature party to the independent contractor agreement/contract. Such attempts may be illegal.

7. Distributors have a right to sell or will their independent contractor business to any party that would qualify as a distributor under normal conditions. This is an important provision that also helps protect the independent contractor status.

8. Distributors have the right to expect that their company and employees will be honest and treat them courteously and respectfully.

9. Distributors have the right to expect that their company has taken all possible steps to insure that their products meet any and all legal standards, perform as promised, have taken all reasonable steps to protect the proprietorship of the products and that they are shipped on time.

10. Distributors should have the right to join any legitimate association of their choice.

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