International Law

Is LifeMax a Franchise?

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One of the constant themes in at BizOp news is the number of business opportunities that are actually franchises or business opportunity franchises, according to the legal definition of a franchise. Many sellers of business opportunities are actually selling franchises, and do so without providing the purchaser the required information about the opportunity.

For example, this is is something I found at the LifeMax website describing their Independent Distributorship, which looks like a franchise to me.

Becoming a LifeMax? Independent Distributor is a simple process.

Here's what to do --

Required: Register and purchase the $69.95 Business Builder Pack - this entitles you to purchase and sell LifeMax? products and earn money whenever you do. You may also invite and enroll other LifeMax? Independent Distributors to join you in your new business, and grow your organization.

As a new LifeMax? Independent Distributor you receive your own self-replicating LifeMax? website and your own BMS (Business Management System) back office to manage and administer your distributorship.

Optional: Purchase one of the currently available LifeMax? Activation Orders (Silver, Gold or Platinum) and gain "active" distributor status. Doing so puts you on the road to becoming a "qualified" distributor. To become qualified, simply enroll (sponsor) an "active" LifeMax distributor on your binary organization's left team and another on your right team.

The "optional" purchase is for an amount above $500, the required fee element for a franchise according to the Federal Trade Commission.

Could be trouble for LifeMax, if they don't have disclosure document for purchasers.

Full post as published by Misleading Advertising Law on October 20, 2008 (boomark / email).