Alticor's New MLM

Note: Please read "Why Bother?" first.


Alticor, the parent company of Amway and Quixtar (which will soon be known as Amway also), is now funding a new MLM company… But wait, it’s not an MLM, it’s a CIC.

That’s like saying it’s not Multi-Level Marketing, it’s Network Marketing.

Here is what the new CIC company, Fanista, has to say about what CIC is:

CIC – DON'T WORRY, NO ONE KNOWS WHAT CIC IS, WE INVENTED IT. So here's what it's all about:

It's short for Common Interest Commerce. It's a way to get paid for things you usually do for free.

Sign up for CIC, free of charge, and right away you can make money doing exactly what you already do anyway – feeding and sharing your passion for entertainment. No strings … it doesn't cost anything to join, and subscriptions to magazines like Birds N' Bloom and Horse Illustrated aren't going to start flooding your mailbox.

Signing onto CIC means you could earn real cash, in three ways:
5% of purchases by friends you refer to Fanista
5% of purchases made by people they refer to Fanista
5% discount on everything you buy at Fanista
[Source: www.fanista.com]

They also admit: “That's where CIC comes in. It's similar to other “refer-a-friend” programs you've probably seen."
[www.fanista.com]
Normally this wouldn’t be something to worry about, but considering Amway’s track record with how they treat its distributors (and in light of recent events) this is not the case. Alticor funding this company means they probably have a strong legal control over the way the company will run.

Before I get into the contract of Fanista I would like to ask some questions and give a disclaimer. Why would Alticor/Amway decide to fund a separate and possibly competing MLM business as opposed to just adding the opportunity as an available option for existing distributors? Will distributors be able to use this opportunity and promote it to their downlines, or will that violate the no compete clause? Why was this company developed entirely in secret? How long have you known that Amway’s parent company was funding a new MLM venture? My Disclaimer: I am not a lawyer, I am in no way making judgment on the legality of the Fanista.com terms and conditions nor am I making recommendations to anyone. That being said here is my opinion on the contract:

One of the first things that caught my eye:

Whether you are a “Visitor” (which means that you simply browse our Site) or you are a “Member” (which means that you have registered with Fanista), this Terms of Use Agreement sets forth the legally binding terms for your use of our Site. YOUR USE OF OUR SITE CONSTITUTES YOUR AGREEMENT TO BE BOUND BY THE FOLLOWING TERMS AND CONDITIONS. PLEASE READ THEM CAREFULLY BEFORE USING THE SITE. IF YOU DO NOT AGREE WITH ANY PART OF THESE TERMS OF USE, YOU MUST NOT USE OUR SITE.
[Source: www.fanista.com]

Now I’m sure this is just legal mumbo jumbo; however, I did find it interesting that not only are they trying to control the “Members” who have stated they have read and agreed to the terms, but also just the casual site visitors. Also as a side note, one must “use the site” in order to even access the terms thus violating that they must read the terms before using the site.

Our Site is intended for access and use solely in the territory of the United States, and we will not ship product outside of the United States.
[Source: www.fanista.com]

The Fanista opportunity will only be available in the U.S.A.

We reserve the right, in our sole discretion, to refuse service, terminate accounts, cancel orders, refuse to post or remove any posting by you, or to restrict, suspend, or terminate your access to all or any part of the Site at any time, for any or no reason, without notice or liability.
[Source: www.fanista.com]

Now again I’m sure this is probably a pretty standard contract; however, doesn’t it make you feel warm and fuzzy inside knowing that if you build up a significant income through Fanista and decide to make it your sole source of income that they can easily terminate you “for any or no reason, without notice or liability[?]”

Members may not provide false, inaccurate, deceptive, misleading or deceitful reviews or recommendations.
Source: www.fanista.com]

The same way Amway sent out an email to tens of thousands of IBOs with the “inaccurate, deceptive, misleading [and] deceitful review” of Orrin Woodwar, Chris Brady, and Team’s business building practices? Just curious…

In addition, you may not create or post reviews or any other content on the Site that (1) contains threatening, libelous, defamatory, obscene, indecent, lewd, or inflammatory material; […] (5) consists of or contains political messages, commercial solicitation, chain letters, mass mailings, or any other form of "spam";
[Source: www.fanista.com]

Why not? Oh, I get it! This is one of those do as I say not as I do things. Let’s read on:

You agree to compensate, hold harmless, and defend us from any claims, damages, losses, liabilities, costs, and expenses, including attorneys’ fees, resulting from your use or misuse of the Site in violation of these Terms of Use.
[Source: www.fanista.com]

So let me get this straight now we have to defend you even if you are in the wrong? That sounds familiar.

You accept sole responsibility for any unauthorized use of this Site conducted with your Identifiers.
[Source: www.fanista.com]

If your security fails to thwart a hacker/cracker, and my login name is stolen and utilized, Fanista will do nothing about it? I know that is a stretch, but why should I be responsible for the actions of a cracker?

WE MAKE NO REPRESENTATION OR WARRANTY WHATSOEVER REGARDING THE COMPLETENESS, ACCURACY, CORRECTNESS, INTEGRITY, RELIABILITY, CURRENCY, ADEQUACY, SUITABILITY, FUNCTIONALITY, AVAILABILITY, OR OPERATION OF THIS SITE OR THE CONTENT, FEATURES, OR APPLICATIONS PROVIDED ON, OR ACCESSIBLE FROM, THIS SITE.
[Source: www.fanista.com]

Well we already know that correctness and integrity are not Amway’s best areas of focus, but I wonder if features includes payment to distributors.

IN NO EVENT WILL WE BE LIABLE, NOR DO WE ASSUME RESPONSIBILITY, FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE USE OR INABILITY TO USE THIS SITE (OR THE CONTENT OR SERVICES PROVIDED ON, OR ACCESSIBLE FROM THIS SITE), OR OTHERWISE, EVEN IF WE ARE ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
[Source: www.fanista.com]

Now this sounds exactly like Amway. Chris and Orrin: We are giving you warning of the possibility of damages to your company and to all the IBOs. If you don’t make adjustments to the pricing and the business model things may end up very bad for the IBOs you’re supposed to care about. Amway: Not only do we not care, we accept no liability for any harm done. We, like Pontius Pilate, wash our hands of this.

any suggestions, ideas, concepts, material or other information you submit to, or send via, this Site (“Submissions”) shall become, and shall remain, our exclusive property.
[Source: www.fanista.com]

So they plan on owning your intellectual property here as well as trying to control and approve who can write and sell books in Amway.

Posting Comments, comments on other Members’ Comments, your profile, and other comments on the Site grants to Fanista a royalty-free, perpetual, irrevocable, and fully transferable right to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute and publicly display such content, in whole or in part, throughout the world in any media now known or later developed.
[Source: www.fanista.com]

So now not only do they own your intellectual property and comments, but they also have the right to “modify [and] adapt” them twisting your words as the see fit. B-E-A-utiful.

Oh, by the way, think that they have to notify you when the get “fat and happy” and decide to change the deal?

We reserve the right, in our sole discretion, to change these Terms of Use at any time. Updated versions of the Terms of Use will be posted here on our Site and are effective immediately. […] Continued use of the Site after any changes to the Terms of Use constitutes your consent to such changes.
[Source: www.fanista.com]

Nope! If you continue to “use” the site you automatically agree to any new terms they cook up… Like a name change from Quixtar to Amway? Or like a change in commission from 5% to .005%? Who knows?!

Those sections of the Terms and Conditions apply to the members (like Quixtar/Amway customers) and visitors (everyone who ever types www.fanista.com into their browser and looks around) only. The regular and premium participants in the CIC program must also abide by those guidelines, yet have a set of even further guidelines they must adhere to. I will take a look at some of these “Rules of Conduct” below:

These Rules are designed to preserve the benefits available to all Participants under Fanista’s CIC Plan.
[Source: www.fanista.com]

I thought that is what the IBOAI was created for until they failed to have the power to protect the IBOs. Well, at least it is in a contract this time, for participant protection, and that can't be changed right?

The relationship formed between Participants and the Company includes, without limitation, the following: (1) the terms and conditions set forth in the Fanista CIC Registration Agreement; (2) these Rules of Conduct, including the CIC Plan and agreement to arbitrate, and (3) the Terms of Use posted on the Fanista.com Web site. The same, along with any pricing and fees, may be modified, supplemented, or amended from time to time by Fanista without prior notice.
[Source: www.fanista.com]

Oh that's just great, not only can they still change the rules at any time without giving prior notice, but the participants cannot take them to court, they still must arbitrate. "Preserv[ing] the benefits available to all Participants" my shorts!

2.4 Company shall mean Power of Entertainment LLC dba Fanista, or any of its affiliates, subsidiaries, and related companies, unless otherwise specified.
2.5 Customer shall mean a person who makes a purchase from Fanista, but who is not registered within Fanista as an RU or as a Participant.
2.7 DownLink shall mean any persons beneath a Participant in Fanista CIC. A Premium Participant’s DownLink may include RUs, Customers, and Regular and Premium Participants. A Regular Participant’s DownLink may include only RUs and Customers (Regular Participants may not sponsor other Regular or Premium Participants).
2.10 Participant shall mean a Participant in Fanista CIC. Participants are classified as Regular or Premium.
2.19 UpLink shall mean the Participants above a given Purchaser who are in such Purchaser’s LOS, and therefore entitled to receive commissions as a result of such Participant’s activity, subject to these Rules.
[Source: www.fanista.com]

Just so we are clear, when the contract says "company" that means the LLC that owns Fanista, but it also says that it means "any of its affiliates, subsidiaries, and related companies." So that basically means that Fanista is Amway, Quixtar, Alticor and Power of Entertainment LLC. (Or at least just Alticor and PoE LLC) So whenever they say, "the company" decides this and that it may mean Amway put pressure on them to choose this, or Amway flat out decided it. (You have a lot of power when you are worth billions and say either do it our way or you lose your funding. So it would seem.) On a small side not I like the flashy new terms of "uplink" and "downlink" to replace Amway's terms of "upline," "downline" and "legs." (In keeping with replacing MLM with CIC)

2.8 [...] (ii) the First Tier Commission will generally be 5% of the Purchase Price. If the purchaser is a Premium Participant, the First Tier Commission is the discount granted to the Premium Participant on his/her purchase.
2.17 [...] The Company anticipates that the Second Tier Commission will generally be 5% of the Purchase Price.
[Source: www.fanista.com]

Wow! Don't you just love that YOU can "anticipate" to make "generally" five percent?

3.3 Acceptance or Rejection of Registration. The Company reserves the right to accept or reject any Participant registration without cause. The Company may terminate any Participant’s CIC participation or status at any time in accordance with Rule 6.6.
[Source: www.fanista.com]

Blah, blah, blah... We already know that you can terminate whoever you want for no reason other than to cover up your wrong doings. You did it with plenty of your IBOAI board in Quixtar, you did it with the Diamonds in GB with Amway. WE GET THE POINT! YOU OWN YOUR PARTICIPANTS!

3.5 Resignation. A Participant may resign at any time by sending written notice to the Company. A Participant who resigns may immediately register as a Fanista registered user without complying with the Six-month Inactivity Rule. However, a Participant who resigns may not register again as a CIC Participant under a different Sponsor unless such resigned Participant remains inactive for six months (Rule 6.5).
[Source: www.fanista.com]

So a participant can be terminated without cause or warning, but to resign written notice must be given. I wouldn't want to be "resigned" if some random person called up, but why no appeal and written notice of termination? Also I see that the six month clause is still in effect with Amway's new venture.

3.7 Use of Companies, LLCs, LPs and other legal entities. A Premium Participant may own and operate his or her independent business through a legal entity, such as a corporation, limited liability company, limited or general partnership, or trust (collectively, a “Legal Entity”), provided the Participant complies with the requirements and conditions of this Rule 3.7. To do so a Premium Participant must initially register as an individual, and then transfer this registration into a permitted entity in accordance with this Rule. Regular Participants are not permitted to own or operate their Fanista business through Legal Entities.
[Source: www.fanista.com]

This may not mean a whole lot other than you have a lot less self protection when operating as an individual rather than LLC. Also the IRS will generally look at your taxes differently with a schedule C. (I don't know much about this and again am not implying or giving advice.)

3.7.2 The sole business purpose of the Legal Entity must be the operation of the independent business allowed under these Rules. The Legal Entity may conduct no other business.
[Source: www.fanista.com]

This means that if you did choose to have an LLC own your Fanista business you must do nothing else with that LLC.

3.7.4 No change in ownership or management of the Legal Entity may be made, and no agreement or arrangement affecting control of the Legal Entity by the Participant seeking approval of such Legal Entity may be adopted, without application to, and the prior written approval by, the Company.
[Source: www.fanista.com]

So not only does Fanista/Amway now own the participant, they own any company or LLC that acts as a participant. That's right, your company cannot fire any management, they also can't quit, you cant change ownership either, Fanista/Amway owns your company and all of its employees if your company holds the Fanista Partisipantship. Sounds like that would violate the employment rights of your management, but appartently Amway, the company that use to tout free enterprise, doesn't care. They want free enterprise for themselves and none other now.

4.1 Abide by the Business Guide/Amendments/Duty of Good Faith.
[Source: www.fanista.com]

Where was the good faith when Orrin and Chris asked for a peacefull seperation from scAmway? Woops... It's getting late and I slipped and said "scAmway" instead of "Amway." Something I have never believed until mid August 2007.

4.2 Use of Media. Participants may not use any broadcast communication methods including mass mailings, telemarketing, national or international advertising, radio, television, facsimile services, computer communication networks including the internet, or any other means by which personal contact is not present to secure Customers or DownLinks or to solicit the sale of Products.
[Source: www.fanista.com]

Again, do as I say not as I do. Also this means that "computer communication networks" such as like MySpace.com or facebook.com cannot be used to advertise your Fanista venture. Oh wait it didn't say "like MySpace.com or Facebook.com" it did say "including the internet." Well I guess Fanista participant's cannot show the plan, or contact, or recruit, or advertise in any way over the internet, and that must include email, instant messaging and websites. Ouch.

4.6 Professionalism. A Participant shall at all times conduct himself or herself in a courteous and considerate manner and shall not engage in any high-pressure tactics, but shall make a fair presentation of the Company’s products, services, and/or CIC Plan, when and where appropriate.
[Source: www.fanista.com]

Why should your participants not engage in "high-pressure tactics" when you, like Amway, are just goint to do it later on anyway. You are either with Quixtar or with Team, give us a signed statement of your loyalty to Quixtar by our deadline. Ring any bells?

4.6.2 A Participant shall at all times make a fair presentation of the products, services, and CIC business opportunity. 4.7 Participant Relationship. Participants are independent contractors whose relationship to the Company is defined by these Rules and the other materials described in Rule 1 (Introduction) above. A Participant may not (i) represent that he or she has any employment relationship with the Company or any of its affiliated companies and/or other Participants, nor (ii) refer to himself or herself as “agents,” “managers,” or “company representatives,” either orally or in stationery or other printed material.
[Source: www.fanista.com]

Just so you know, even though the company owns you once you agree to the contract, you cannot imply that you represent their interests.

4.9 Other Selling Activities. Except as provided in this Rule 4.9, Participants may engage in other business ventures, including other selling activities, involving products, services, or business opportunities not offered or marketed by the Company. However, Participants may not take advantage of their knowledge of or association with other Participants whom they did not personally register, including their knowledge resulting from or relating to their individual lines of sponsorship, in order to promote and expand such other business ventures. [...] Use of the LOS or any other knowledge obtained through the Company’s CIC program to market products, services or business opportunities not offered by the Company constitutes an unwarranted and unreasonable interference with the business of other Participants and the Company.
[Source: www.fanista.com]

So we can pretty much join any other MLM or business or job we want as long as we never, ever tell any Fanista LOS member? I am confused. This means I can't ask my Fanista LOS to join Amway, but according to Amway's current rules not only can I probably not participate in Fanista but I had definately better not ask other Amway ABOs to try Fanista. Wow, so I can work at a retail store, but if I dare ask someone I met on Fanista to shop with me I meet legal risk? This is starting to get complicated. (At least for a simple mind like mine.)

4.9.2 Nothing in this Rule 4.9 restricts, for example, a Participant regularly engaged in the operation of a service or retail establishment from serving clientele who may be Participants or Customers and who have sought them out.
[Source: www.fanista.com]

Well that relieves me, if they seek me out I am good to recomend them to anything... Wait a minute, how can one prove who sought who out? Also didn't thousands of the members of TEAM seek out Orrin and Chris? Amway didn't seem to like that anyway.

4.13 Accurate Personal/Business Information. All Participants shall provide the Company with accurate and current personal and business information [...] The Company may withhold payments from any Participant who fails to provide such information on demand by the Company.
[Source: www.fanista.com]

Don't give Amway... excuse me, Fanista, the information they want... They won't pay you.

5.4 Premium Participants. Premium is the highest publicly available status in Fanista’s CIC system. Premium Participants receive commissions on the purchases of Customers, Regular or Premium Participants sponsored by the Premium Participant. In addition, Premium Participants are entitled to discounts on purchases for personal use equal to Fanista’s then-available Lower Tier Commission. The Company may, but is not required to, provide other customer solicitation tools for Premium Participants.
5.4.1 To achieve Premium status a Regular Participant must earn at least $5.00 in Commissions within a 12 month period. To maintain such status a Premium Participant must earn at least $5.00 in commissions within a 12-month period.
[Source: www.fanista.com]

Still sounds just like MLM (possibly worse due to the commissions not being near as high, and the bonuses being... well.. non-existant) so why try and fancy it up with the coined phrase CIC?

5.5 Other CIC Status Levels. The Company in its sole discretion may provide additional compensation to individuals it selects because it believes they provide unique value to the CIC program.
[Source: www.fanista.com]

WE CAN CHOOSE FAVORITES INSTEAD OF BEING FAIR TO EVERYONE!

6.3 LOS Impact of CIC Participation. Regular Participants may not sponsor other Regular Participants. When an RU or Customer elects to sign up for CIC (a “New Participant,” his/her UpLink will be modified as follows.
6.3.1 When RUs or Customers elect to become Regular Participants (e.g., elect to participate in the Fanista CIC program) a Premium Participant Sponsor of such New Participant will retain such Sponsor status. However if the Premium Participant sits in the LOS two levels up from the New Participant, such Premium Participant can retain such status only if the Sponsor between the Premium Participant and the New Participant is himself or herself a Premium Participant. If the Sponsor between the Premium Participant and the New Participant is a Regular Participant, the Premium Participant sitting two levels up will lose his LOS connection to the New Participant. Premium Participants do not “inherit” New Participants losing their LOS Sponsors as a result of these rules.
6.3.3 The impact of this rule on Regular or Premium Participants is not reversed as a result of changes to the status of the New Participant. For example, if a person becomes a Regular Participant and thereafter loses Regular Participant status, his or her prior LOS is not revived or resuscitated. Upon loss of such status the New Participant reverts to Customer or RU status, and is again free to choose his or her UpLink at any time, and to change such UpLink designation at any time.
6.5.1 When a Participant is inactive for a period of at least six months his or her CIC registration shall automatically lapse.
[Source: www.fanista.com]

Meh, just thought ya'll should know.

“CIC Promotional Activities” shall include any actions that further or promote such person’s CIC status or LOS, such as any of the following activities.
6.5.3.1. presenting the CIC plan to any prospective Participant;
6.5.3.2. making any CIC related filings with the Company (such as registration forms);
6.5.3.3. attending or conducting any recruiting, training, or motivational meeting conducted or sponsored by the Company; and
6.5.3.4. accepting or receiving any commission payments, other than commissions earned prior to the beginning of the inactivity period.
[Source: www.fanista.com]

Two quick things. 1. Remember that when Fanista recruits on its site it says, "Remember, signing up costs zilch. There is no secret handshake, no meetings to attend. Just a chance to earn money doing what you already do," but now it implies that participants will be attending meetings. (Not a huge deal, most of us know that it is imperative to attend leadership development meetings to develop ourselves into the type of good, moral leader who can succeed at network marketing and at life in general.) So let's move on to the next point: "Accepting or receiving any commission payments" will automatically mean that you promote Fanista. Yes, not just cashing the check, but if they issue you one at all you are promoting them. So be carefull not to earn a check.

7.2 Sale of Support Materials. Participants may not sell or offer to sell Support Materials to prospects (including RUs or Customers), nor require the purchase of Support Materials as a precondition to becoming a Participant, RU or Customer.
8.1.5 Participant shall use only Company-produced and Company-authorized Support Materials.
[Source: www.fanista.com]

So, NO you cannot build your income your own way and train your friends and family on the best way to do it. Also, NO you cannot create another TEAM which will become the fastest growing organization in Fanista. Fanista/Amway want you to do it their way or not at all, regardless of whether they would like to promote the broken "width" model instead of something that has actually been proven to work (even with a crappy company with awful prices instead of a good company) over the past eight years.

10.1 Participants waive all rights to jury or court trial to resolve any dispute arising from or relating to these Rules or the CIC Plan except as expressly set forth herein.
[Source: www.fanista.com]

So don't even try it TEAM!

Now, posibly the most important lesson Fanista/Amway should learn for themselves:

Once a trademark is weakened or lost, it is impossible to regain its full value and importance. Therefore, the Company makes every effort to protect its trademarks, its corporate logotype, label designs, and various product names so that others cannot use them.
[Source: www.fanista.com]

O RLY? Then why the heck go to all the trouble to anger all the IBOs in Quixtar and change the name back to Amway in prayers that you can somehow salvage the Amway name in the US, which will never happen, answer that Alticor! Seriously, what is with all this legal, name save, Amway it more well known that Quixtar even though it is hated much more, mumbo jumbo? You just admitted that you can't win, why act like total donkeys about it instead of just sucking up your pride and going what is best for IBO.. now ABOs? You have nothing to be proud of anyway, American Way, or whatever, is not yours. It doesn't even exist anymore. The glorious dream of Amway that belonged to its founders was crushed when the sons or lawyers took over. Who's in charge over there?

Anyway, I was going to go into the Privacy Policy a bit, but it is about time I end this post.

To my readers: I am sorry it is so long in between posts. I am just not good at this blogging thing yet.