How to Get Rid of Your Recruiting Problems Once and For all.
In any distributorship, franchise, or network marketing business opportunity the question of encroachment, or “stealing customers” is a hot topic.
Over at Pink Truth, How to recruit the customers of other Mary Kay consultants there is a discussion about this topic which has attracted a good deal of discussion.
The basic problem any sales force faces is how to grant sales territories. Should they be exclusive, semi-exclusive, or completely wide open.
While competition for sales from other concepts is just that, competition from your own franchisor, distributor or other sales consultants is seen as much different.
We will accept competition, but not from our family members.
The FTC Rule on Business Opportunities, section 437.5(n), is useful to read. This section would prohibit misrepresentations made directly by the seller or through a third party about the terms of the territory offered to a prospective purchaser.
As was pointed out, Mary Kay’s sales contract includes the following term: “Customer names and addresses furnished by Beauty Consultant to Company in connection with optional programs shall remain the sole property of Beauty Consultant and will not be used by Company or disclosed by Company to other parties without Beauty Consultant’s permission, except as may be required by law.”
This would appear to make it clear that a consultant need not worry about having her customers poached by another consultant, unless of course the customer name was not furnished by the consultant to Mary Kay “in connection with [an] optional program”. Is this deceptive? I don’t know.
But, in any event, it is apparent that the Mary Kay network marketers need the protection of section 437.5(n) to properly evaluate both the opportunity and ongoing compliance with their sales contract.
