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Pyramid Yes/No

by Virtualghost
14 replies
The Creator says no I say yes as there is no product or service offered.
What you think?


Monthly Franchise Fee Income

6 people Franchise under you 1x6 You earn $6 dollars
per month
6 people Franchise under each of them 6x6 You earn $36 dollars
per month
6 people Franchise under each of them 6x6x6 You earn $216 dollars
per month
6 people Franchise under each of them 6x6x6x6 You earn $1,296 dollars
per month
6 people Franchise under each of them 6x6x6x6x6 You earn $7,776 dollars
per month
6 people Franchise under each of them 6x6x6x6x6x6 You earn $46,656 dollars
per month
#pyramid #yes or no
  • Profile picture of the author Alexa Smith
    Banned
    Originally Posted by Virtualghost View Post

    there is no product or service offered.
    This forum's a bad place to ask for and to take legal opinions. All you'll get are guesses. But maybe that's all you're asking for, really?

    My guess is that if there's no product or service offered, then in most countries that would be an illegal pyramid. All you're paying for is the right to sell the "opportunity" to other people? I don't see any difference from a "chain letter", and they're surely illegal almost everywhere, these days?
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  • Profile picture of the author Oliver Williams
    People these days are more switched on and even more dubious about these type of '"productless" multi level marketing programs. I also think from an ethical point of view that this is not the best way to go.
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  • Profile picture of the author mobilemob
    Looks like it to me.
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  • Profile picture of the author Virtualghost
    Just asking your opinion I am aware you cannot answer to it's legallity as this is a new one being offered through unmentioned classified site and as am confident it will be shut down as they are even using paypal and as I told creator it will be one more scheme with a quick ending.
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    • Profile picture of the author Alexa Smith
      Banned
      Originally Posted by Virtualghost View Post

      am confident it will be shut down as they are even using paypal
      I'd think the PayPal facility will disappear very quickly, anyway. Together with some participants' PayPal accounts. :rolleyes:
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  • Profile picture of the author Virtualghost
    This is what the response was when I said it was a pyramid to the creator.

    "haha, no.

    Ive done alot of 'head office' work in my past and its a legitimate Franchise business plan, I will admit my main product is my Brand and logo, not an ebook and a lie.
    Its very simple and turnkey, I have a valid business license and have been in business a few years now, I've never had a bad review or complaint.

    Now, what gives you the impression of a pyramid, was it the chart because it looks like a triangle? Because if thats the case maybe I just need a new way to
    show exponential growth, even the local McDonalds has a triangle chart in the office showing what they expect."
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    • Profile picture of the author SunilTanna
      If the money ultimately comes from getting others to join the bizop, rather than selling a product to retail customers who are not participating in the scheme, run away don't walk, and definitely don't join. IMHO.

      (I am not a lawyer, but I understand that(some percentage of the revenue coming from *product* sales to bizop participants might be legally Okay, the percent being a max of perhaps 30% or 50%, but that exception doesn't apply here).

      The way that you have described this "opportunity" is that people are paying for nothing more than the right to enrol others in the scheme - they can't be paying for anything else, because there is nothing else. My opinion, is run away.

      And don't be fooled by "I haven't been busted yet" - lots of questionable schemes take years to bust, or are never busted by the authorities, or just quietly come and go with people's money.

      Or by "it only looks like a triangle shape" or "our plan is square/round/elliptical/etc not pyramid shaped" - it's not the shape of that determines whether something is a pyramid/ponzi but simply whether or not income is coming from bizop participants paying each other (as opposed to sell a product to real customers).

      Or by "social-security/taxes/corporate-america/etc is a pyramid..." - irrelevant to determining whether a particular bizop is or isn't a pyramid/ponzi.
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    • Profile picture of the author shane_k
      Originally Posted by Virtualghost View Post


      Its very simple and turnkey, I have a valid business license and have been in business a few years now, I've never had a bad review or complaint.
      After he said the above, you should have told him that Bernie Madoff had a valid business license also

      and...

      he never had any bad reviews or complaints either (not for a long, long time anyway)
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  • Profile picture of the author Rob Whisonant
    I am big time into MLM and SunilTanna nailed it about how to tell if something is a pyramid scheme. Especially the part about making money from selling the opportunity. AKA no real product being sold to consumers. That is a big no-no in the MLM world and a warning sign to run.

    Now as far as PayPal goes. They will not even do business with "legitimate" MLM companies. As soon as he gets a random site review or a complaint his PayPal account will be history.

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  • Profile picture of the author CoachManny
    Maybe I missed it but what is the product? That is the easiest way to determine if it is a pyramid scheme. Will people buy the product if there is no payplan attached to it?

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  • Profile picture of the author WillR
    As noted above the biggest defining factor of a pyramid scheme is if the product or service being purchased would be purchased by people for the same price even if no opportunity to resell it was available.

    The law wants to see people getting something of value for their money. If no true value is given except for the opportunity to resell the product or service to others, then it's most likely not legal.

    From what you have written above the only thing you are buying is the opportunity to resell it to others and in that case most countries would deem that illegal. That's what a pyramid scheme is.

    When defining a pyramid scheme the authorities would look to see if there are in fact customers who have paid their money and are using the product or service without attempting to resell it. That alone tells them all they need to know.
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  • Profile picture of the author Kim Phoenix
    If there's no product or service, and you pay to join and get others to pay up to join, that sounds like a pyramid scheme to me. Pyramid schemes are illegal, but they still pop up here and there, eventually get shut down, but not before many people lose their money. Pyramid scheme - Wikipedia, the free encyclopedia It's very important to note that many people call MLM's pyramid schemes. That is not the case. The MLM companies I can think of sell products and/or services. There may be a fee to join, but the money is not made from people joining (well, it's not supposed to be, but some will try anything). The money is made from the sales volumes.
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    • Profile picture of the author Kay King
      I don't understand the point.

      There is not enough information here for anyone to be making judgments on whether this particular business is legal or not. It doesn't matter if people agree or not - you aren't going to convince a business owner his business is "wrong". Why would you even try?

      You say it's a "new" business but the reply from the owner says he's been in business for years. It could be there's more to the business than you know - or you may be right.

      Whether there's a problem with paypal - or legality - is the concern of the business owner.
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  • Profile picture of the author MartinPlatt
    If nothing is being sold or offered other than the franchise opportunity, then I think it is...
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