If a Sales Kit or Startup Fee Is Several Hundred Dollars, Then Is This Considered “Frontloading?”

Frontloading generally refers to a process in which a MLM company, or a sponsoring distributor, encourages a new distributor to purchase far more than is commercially reasonable under the circumstances. For a more detailed explanation, watch this video by expert MLM Attorney, Jeff Babener.

Front loading generally refers to a process in which a MLM company, or a sponsoring distributor, encourages a new distributor to purchase far more product than is commercially

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MLMAttorney’s most requested video of the month: What Is the U.S. and International Trend in Recognizing the Validity of Personal Use by Distributors in
Pyramid Cases?

In short, is it legal to motivate distributors to buy products in order for them to qualify for the compensation plan rewards as opposed to purchasing product/services for their own personal use or for resale? This question greatly impacts direct selling companies and their owners/executives. Read the recent Burnlounge decision on our website.

In the last 10 years, distributor personal use, as a legitimate end-destination for product/service has been increasingly recognized by courts, legislatures and regulators. In 2013 and 2014, two European Union tribunals; now counting more than a dozen U.S. states have amended MLM statutes. In 2004, an FTC advisory opinion applauded efficiencies of

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