Frequently asked Questions about TIF - Quixtar

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Frequently Asked Questions about Team In Focus, the Entry Level Plan, and the Maximum Achievement Program

April 24, 2002

Index of Questions

1. What is Team In Focus (TIF)?
2. What is the Entry Level Plan (ELP)?
3. What is an illegal pyramid scheme?
4. Is this Entry Level Plan illegal?
5. Why is Quixtar legal?
6. What is the difference between Quixtar and Team In Focus?
7. How is the Entry Level Plan compensation plan different from other compensation plans?
8. Isn't the Maximum Achievement Program (MAP) pack itself considered a product?
9. What attempts has Quixtar made with Team In Focus leaders to make the Entry Level Plan comply with the Rules?
10. What specific Rules does the Entry Level Plan violate?
11. What federal and state laws have been broken?
12. What changes need to be made to the Entry Level Plan to make it legal?
13. How is the money divided that is collected from the sale of the MAP packs?
14. Am I in trouble if I purchased a MAP pack?
15. How do I get a refund for the MAP pack I purchased?
16. Was my upline Diamond terminated?
17. How can you terminate Diamonds who have devoted their lives to the Quixtar business all these years?
18. How will this affect my Quixtar business (if my Diamond was terminated)?
19. Do I need to make a choice between Quixtar and Team In Focus?
20. What will happen if I promote or participate in the Entry Level Plan?
21. My upline says the Entry Level Plan was designed to help people who want to build a Quixtar business make more money quicker. Is Quixtar against a new IBO making more money?
22. Does Quixtar have anything in place to help us make more money since we can"t do the Entry Level Plan?
23. Who can I talk to further about this?

1. What is Team In Focus (TIF)?

In Quixtar, different Lines of Sponsorship that share common approaches to building the business often work with each other. This kind of an organization typically uses the same Business Support Materials (BSMs) -- educational and training materials and programs. Team In Focus was such an organization.

2. What is the Entry Level Plan (ELP)?

The Entry Level Plan is a promotion by certain former IBOs affiliated with Team In Focus. Quixtar is not connected in any way to the Entry Level Plan, nor does Quixtar approve it. Quixtar met with Team In Focus Diamonds to understand what the Entry Level Plan is and how it works, and we have concluded that the Entry Level Plan is an illegal pyramid scheme that violates state and federal laws as well as the IBO Rules of Conduct.

3. What is an illegal pyramid scheme?

In a typical pyramid scheme:

  • participants are encouraged to make a substantial up-front payment, most of which is immediately paid upline as compensation for the act of recruiting or inducing the new participant to pay the money, and
  • participants are told they can earn back their up-front payment by persuading others to make similar payments, based on similar promises that they can make money from recruiting others, and so on, and
  • no real product or service is sold to end-user consumers -- people who just intend to buy a product or service but don't expect to make money by encouraging others to join, and
  • those placed higher in the pyramid (or those who join earlier) have a better chance to make money than those getting in later.

You may also wish to refer to [www.ftc.gov/bcp/conline/pubs/invest/mlm.htm] to see the Federal Trade Commission's (FTC) explanation of an illegal pyramid and some tips on how to tell the difference between an illegal pyramid and a legitimate business opportunity like Quixtar.

4. Is this Entry Level Plan illegal? Why?

There are numerous reasons why Quixtar has determined that the Entry Level Plan is a thinly disguised illegal pyramid scheme. Here are a few:

  • The only way to make money is by inducing others to buy a Maximum Achievement Program (MAP) pack.
  • Most of the money paid for each MAP pack -- about 2/3 of the purchase price, TIF told us -- goes immediately into the pockets of the upline as compensation for inducing the new participant to buy a MAP pack.
  • While the MAP pack contains a few items, such as tapes and a personality profile, at its very high price the MAP pack is not a product that could be sold to anyone who was not interested in making money by selling MAP packs to others. It is not, for example, a consumable item like a nutritional supplement, household cleaner, or cosmetics that an end-user would buy for use in his or her home. There is no market for MAP packs except IBOs who believe they can make money selling MAP packs to other IBOs. There is no way to sell a MAP pack to a non-IBO and no reason a non-IBO would want to buy a MAP pack.
  • As the Entry Level Plan would be rolled out through the Team In Focus organization, those at the top of the organization -- Diamonds and Emeralds who act quickly-- would quickly and easily make money just by selling MAP packs to their existing legs. IBOs in their legs who would buy MAP packs right away would probably be able to make some sales to their downline, and so on. But the lower an IBO ranks in the Team In Focus organization, and the later that IBO starts trying to sell the MAP pack to others, the fewer IBOs would be left who haven't already bought a MAP pack or else decided they don't want to participate in the Entry Level Plan. Any way you look at it, it would be easier for upline to make money in the Entry Level Plan and easier for downline and especially newly registered IBOs to lose the money they pay for MAP packs. This makes the Entry Level Plan deceptive and unfair to new IBOs.
  • Compensation systems like the Entry Level Plan have consistently been condemned as deceptive and unlawful pyramid schemes by courts and state and federal law enforcement agencies like the Federal Trade Commission (FTC), Securities and Exchange Commission (SEC), U.S. Postal Service, and many state consumer protection agencies. If you have any doubts about this, you should consult a qualified attorney, and you ought to suggest that he or she study the 1979 FTC opinion that explains in detail why the compensation plan on which the Quixtar business is based is NOT an illegal pyramid. The FTC opinion describes several varieties of illegal pyramids that closely resemble the Entry Level Plan and are fundamentally different from Quixtar. For more information on the elements of an illegal pyramid and fraudulent schemes, see: http://164.62.7.30/bcp/conline/pubs/invest/mlm.htm

5. Why is Quixtar legal?

The FTC in 1979 ruled on the legality of the compensation plan on which the Quixtar business is based and said that it is a legitimate business opportunity. Some of the key FTC findings help illustrate the fundamental differences between Quixtar and the Entry Level Plan.

  • The cost to register as an IBO is quite low -- only a fraction of the cost of one MAP pack -- and no IBO can earn income just by registering other IBOs unless they also generate product sales.
  • No IBO can earn a Performance Bonus from Quixtar, based on sales of his downline, unless the IBO complies with the Member/Client Volume Rule and moves 50 PV to Clients or Members each month. The Entry Level Plan has no such rule, and there is not even a product to sell at retail.
  • All Quixtar products are covered by the Buy Back Rule and Satisfaction Guarantee. IBOs who buy a MAP pack are not entitled to get their money refunded under these Rules.
  • Quixtar's other Rules, such as the 70% Rule, also ensure that the Quixtar business is a legitimate business opportunity. The Entry level Plan has no such rules.

6. What is the difference between Quixtar and Team In Focus?

Quixtar is the company that powers your business, and Team In Focus was a group of former IBOs who offered IBOs support and training. More specifically:

  • Quixtar is the infrastructure that supports your business. We own and administer the Independent Business Ownership Plan, run the Web site (quixtar.com), provide and distribute the products and services, offer customer service, pay your bonuses, and basically handle all the other behind-the-scenes activities so you can focus your effort and energy on building your business.
  • Team In Focus offered educational and training materials and programs to help you build your Quixtar business.

7. How is the Entry Level Plan compensation plan different from other compensation plans?

What sets the Entry Level Plan apart is that IBOs are solicited to buy the MAP pack primarily as an income opportunity separate and distinct from Quixtar. There may be some items in the MAP pack that can help some IBOs with their Quixtar business, but the main selling message is "earn income fast by selling MAP packs to other Quixtar IBOs." In other legitimate training systems, the main focus is helping IBOs build a successful Quixtar business. Further, the Entry Level Plan is illegal because participants only make money by bringing in more participants.

8. Isn't the Maximum Achievement Program (MAP) pack itself considered a product?

The MAP pack is training material that should support building a Quixtar business. Legitimate business opportunities sell products that are of value to end-users who don't participate in the compensation plan.

9. What attempts has Quixtar made with Team In Focus leaders to make the Entry Level Plan comply with the Rules?

For the past three and a half months, the Corporation engaged in exhaustive communications with members of Team In Focus leadership about the promotion of the Entry Level Plan. We consulted with them in an effort to help them build their Quixtar-affiliated businesses and teach others to build successful Quixtar-affiliated businesses without using deceptive or illegal techniques. Further, our attorneys talked with their attorneys and made several recommendations on how to make the Entry Level Plan comply with the Rules. Nevertheless, the Team In Focus leaders launched the Entry Level Plan, which is a violation of the IBO Rules of Conduct and federal and state law.

10. What specific Rules does the Entry Level Plan violate?

The Entry Level Plan violates Rules 4.9 and 4.10 of the IBO Rules of Conduct, which forbid IBOs from engaging in any deceptive or unlawful trade practice (Rule 4.9) and operating any illegal or unlawful business enterprise (Rule 4.10).

11. What federal and state laws have been broken?

There are a wide variety of federal and state laws that apply to these issues. They include the Federal Trade Commission Act, the 1933 Securities Act, state pyramid and unfair trade practices acts, and a large body of case law interpreting these and other statutes.

12. What changes need to be made to the Entry Level Plan to make it legal?

Eliminate the pyramidal characteristics as explained in #4.

13. How is the money divided that is collected from the sale of the MAP packs?

According to the TIF leaders, the cost of producing each MAP pack is approximately $100, about $120 is paid in immediate bonuses to the seller and upline, and the remaining $80 is reserved by the Diamonds. As you can see, $200 of the $300 payment for the MAP pack is devoted to compensate the seller and upline for inducing a participant to buy the MAP pack.

According to TIF's literature, an IBO will need more than a dozen MAP packs sold in his or her "right" and "left" legs just to break even. Then each of those dozen must find 12 or more one-time MAP pack customers to break even, and so on. We believe it is inevitable that the last people to buy the MAP packs will have no chance to make the income promised by the Entry Level Plan, and that the Entry Level Plan is inherently deceptive and unfair to Quixtar IBOs.

14. Am I in trouble if I purchased a MAP pack?

No. However, please understand that promotion of and participation in the Entry Level Plan would be a violation of the same Rules for which certain Diamonds were terminated, and would place you in violation of the same federal and state laws.

15. How do I get a refund for the MAP pack I purchased?

IBOs who bought the MAP pack are entitled under the IBO Rules of Conduct to a full refund from the seller. The IBO Rules of Conduct require sellers of BSMs to provide refunds upon request within 180 days of purchase. Should you wish a refund, you will need to contact the person from whom you purchased the MAP pack. If you have sold a MAP pack and collected money, you are required, upon request, to give a full refund to each person to whom you sold the MAP pack.

16. Was my upline Diamond terminated?

Of the 18 Diamonds in Team In Focus, 6 have been terminated (Andy & Polly Andrews, Gerry & Sharon Betterman, Gayle Collinsworth, Mike & Lynn Jakubik, Ron & Melanie Rummel, John & Pat Terhune) and most of the others, when threatened with termination, have resigned.

17. How can you terminate Diamonds who have devoted their lives to the Quixtar business all these years?

Termination is never an easy decision and is only used as a last resort. However, after three and a half months of pointing out to the former Diamonds in Team In Focus that the Entry Level Plan is illegal and contrary to the IBO Rules of Conduct, the unfortunate decision made by certain Diamonds to go forward with its launch left us no alternative. The action taken was necessary to protect the long-term security of the Quixtar business and preserve the Independent Business Ownership Plan opportunity for everyone in the future.

18. How will this affect my Quixtar business (if my Diamond was terminated)?

Quixtar is presently working with your Line of Sponsorship to ensure you receive the training and support you desire. And while your upline Diamond may not be in the business any longer, you're still a part of one of the most dynamic businesses in the world. In fact, Quixtar was recently ranked as number two in consumer e-commerce in the United States. So, with all that Quixtar has to offer -- great products, a proven plan, a terrific Web site, and excellent support -- you still have what it takes to build a strong business.

19. Do I need to make a choice between Quixtar and Team In Focus?

The choice is this: to not violate the Rules of Conduct or to violate them. The Entry Level Plan currently violates the Rules.

20. What will happen if I promote or participate in the Entry Level Plan?

The Corporation will be placed in a position where it must enforce the Rules of Conduct by taking action up to and including termination of the contract between Quixtar and your independent business affiliated with Quixtar.

21. My upline says the Entry Level Plan was designed to help people who want to build a Quixtar business make more money quicker. Is Quixtar against a new IBO making more money?

Quixtar wants new IBOs to make money. In fact, Quixtar offers a legitimate business opportunity that gives new IBOs the chance to make money immediately through the sale of products to Members and Clients who are referred to the Quixtar Web site.

22. Does Quixtar have anything in place to help us make more money since we can't do the Entry Level Plan?

Absolutely. The Quixtar business opportunity has been carefully and legally designed to give you a wide variety of ways to make as much money as you desire:

  • First go to www.quixtar.com. You'll see thousands of products and services -- Quixtar exclusives, Store For MoreTM merchandise, Hot Buys, Partner Stores, and more -- that can provide you with a solid base of income when your Members and Clients purchase these high-quality, name-brand items.
  • Further, make sure every IBO you've registered as well as all your Members and Clients are on Ditto DeliveryTM Service. It's a great way to generate volume on a regular basis.
  • Then continue to use the site and your personal touch to register others as IBOs.
  • Finally, when you add all the rewards available through the Sales Incentive Program, you have an amazing menu of money-making opportunities.
  • Quixtar has experienced sensational growth since it launched in 1999, and the business continues in a positive direction to this day with upward-trending sales and IBO registrations.

23. Who can I can talk to further about this?

We'd be happy to talk with you and answer your questions. Contact Business Information Services at (616) 787-7636

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