onlegacy-network-logoOnLegacy Network are currently in prelaunch, with an advertised expected launch date of January 2016.

The company claims to be ‘registered as Onlegacy, Inc in the state of California in USA‘, with an address in Los Angeles provided on the OnLegacy Network website.

Rogelio-Ortiz-president-onlegacy-networkIdentified as President of the company on the OnLegacy Network website is Rogelio Ortiz (right).

As per Ortiz’s OnLegacy Network corporate bio:

Mr. Rogelio Ortiz has been considered a very successful business person since his early life.

He was able to run operations back in the 80s to the largest cement company in Mexico and around the world.

He has been awarded in the state of California by governmental organizations due to the fact of his entrepreneurship as well as the way he has succeeded in business.

Rogelio brings his over 35 years of experience on business management to make Onlegacy the project of his life.

How much of that experience relates to MLM is unclear. Possibly due to language-barriers, I was unable to trace an MLM history on Ortiz.

Ortiz himself doesn’t appear to own OnLegacy Network. The company Dos Marketing shares the same street address of OnLegacy Network, and is owned by Juan Pablo Morales.

Further research reveals Morales appearing in OnLegacy marketing videos:

Juan-Pablo-Morales-owner-onlegacy-network

For reasons unknown however, Morales name does not appear anywhere on the OnLegacy Network website.

As with Ortiz, Morales doesn’t appear to have an MLM history.

Read on for a full review of the OnLegacy Network MLM business opportunity.

The OnLegacy Network Product Line

Onlegacy Network has successfully partnered with a few companies which interact in the highest growing industries around the world such as – Telecommunications, Merchant Services (Visa/Mastercard), Education, Marketing and Technology, and Money Remittance.

These partnerships will bring our members the freedom to choose what is better for them and at the same time obtain a great way to earn True Residual Income.

Telecommunications, merchant and print & creative services all feature on the OnLegacy Network website, along with various electronics products.

Unfortunately these appear to have nothing to do with OnLegacy Network’s MLM business opportunity (see compensation plan analysis below).

The OnLegacy Network Compensation Plan

The OnLegacy Network compensation plan does reward affiliates for making retail sales of third-party products and services, but primarily revolves around the recruitment of affiliates and their purchase of “inscription systems”.

Commission Qualification

All OnLegacy Network affiliates must remain “active” in order to qualify for commissions.

Remaining active requires each affiliate to pay an ongoing monthly $29 fee.

OnLegacy Network Affiliate Ranks

There are eight affiliate ranks within the OnLegacy Network compensation plan.

Along with their respective qualification criteria, they are as follows:

  • Team Leader – generate at least 17,000 GV (accumulated)
  • Director – recruit and maintain two Team Leader ranked affiliates
  • Regional Director – recruit and maintain at least four Director ranked affiliates
  • National Director – recruitand maintain at least five Regional Director ranked affiliates
  • International Director – recruit and maintain at least five National Director ranked affiliates
  • Vice-President – recruit and maintain at least five International Director ranked affiliates
  • President – recruit and maintain at least five Vice President ranked affiliates
  • Ambassador – recruit and maintain at least five President ranked affiliates

Note that GV stands for “Group Volume”, that being BV generated by an affiliate’s downline (see “residual commissions” below).

Rank Achievement Bonus

Upon qualifying at one of OnLegacy Network’s affiliate ranks, the following performance-based bonuses are awarded:

  • Team Leader – plaque award
  • Director – iPad
  • Regional Director – a “computer system worth up to $2000)
  • National Director – “travel worth up to $6000”
  • International Director – a car worth up to $20,000
  • Vice President – a luxury car worth up to $150,000
  • President – a house worth up to $500,000
  • Ambassador – $25,000 a month for ten years or a single $2,500,000 payment

Retail Commissions

The specifics of retail commissions offered to OnLegacy Network affiliates is sketchy:

By selling Onlegacy Network Products to retail customers (and stores), you can earn generous profits of up to 50%.

Presumably these commissions are paid on the sale of third-party products and services to non-affiliates, with the 50% paid a percentage of the commission said third-parties pay to OnLegacy Network (who are effectively their affiliates).

Some examples provided in the OnLegacy Network compensation plan include a $50 assisted and $100 unassisted sale commission on free teriminal (wireless and non-wireless) and free POS program sales.

Presumably assisted sales are sales made with the assistance of OnLegacy Network staff, whereas non-assisted sales are made by the affiliate themselves.

An ongoing residual commission of up to 50% (of fees paid?) is also available:

  • Partner – 12.5%
  • Team Partner – 25%
  • Brand Partner – 50%

Finally, a matching bonus is available on the above residual commissions, paid out down seven levels of recruitment:

  • level 1 – 5%
  • level 2 – 3%
  • level 3 – 2%
  • level 4 – 1%
  • level 5 – 2%
  • level 6 – 3%
  • level 7 – 5%

Recruitment Commissions

OnLegacy Network affiliates are directly paid to recruit new affiliates, with how much of a recruitment commission is paid out determined by how much a newly recruited affiliate spends on their membership:

  • Beginner System ($58) – no commission
  • Basic System ($279) – $50
  • Advanced System ($554) – $100
  • Total System ($1079) – $200

Residual Commissions

Residual commissions in OnLegacy Network are paid out on inscription system purchases by newly recruited affiliates, via a binary compensation structure.

A binary compensation structure places an affiliate at the top of a binary team, split into two sides (left and right):

binary-MLM-compensation-plan

Commissions are calculated based on Business Volume (BV) points, with each affiliate inscription system assinged the following point values:

  • Basic System – 190 BV
  • Advanced System – 390 BV
  • Total System – 780 BV

As OnLegacy Network affiliates are recruited BV is tracked on both sides of the binary. For every 390 BV matched on either side of the binary, a $25 commission is paid out.

Note that the above is taken from an August 27th marketing video, narrated by OnLegacy Network’s Vice-President of Sales, Daniel Cruz. The OnLegacy Network website contains conflicting information, stating that for every 330 BV matched a $10 commission is paid out.

Coded Bonus

The Coded Bonus is paid out on the recruitment of Total System affiliates, with a maximum $150 per Total System affiliate recruited paid out.

How much of a commission an affiliate receives, is determined by their OnLegacy Network affiliate rank:

  • Director – $25
  • Regional Director – $50
  • National Director – $75
  • International Director – $100
  • Vice President – $125
  • President – $150

The Coded Bonus is first paid to the recruiting affiliate, assuming they are at the Director or higher rank. If not, the bonus is paid to the first Director or higher ranked affiliate in the upline.

If that affiliate was an International Director, they’d receive $100 with $50 of the Coded Bonus payout remaining. The system would then search for either a Vice President of President ranked affiliate to pay the remaining $50 out to.

If a Vice President was first found, the system would pay out $25 and continue to search upline for a President to pay the remaining $25 out to.

If a President was first found, the system would pay out he remaining $50 and stop searching.

If the recruiting affiliate is a President, they receive the full $150 Coded Bonus, with nothing paid to the upline.

Qualification for the Coded Bonus is also determined by an OnLegacy Network affiliate’s rank:

  • Director – 4 active customers
  • Regional Director – 5 active customers
  • National Director – 7 active customers
  • International Director – 10 active customers
  • Vice-President and President – 15 active customers

OnLegacy Network do not define “active customers” in their compensation plan material, leaving the question of whether these are retail customers or recruited affiliates open.

 

Update 23rd September 2015 – OnLegacy Network’s compliance department have confirmed that “active customer” are retail customers. They cannot be affiliates. /end update

Coded Bonus Match

Coded Bonuses paid out to recruited downlines are matchable, with the matching bonus paid out down five levels of recruitment as follows:

  • level 1 (personally recruited affiliates) – 10%
  • level 2 – 5%
  • level 3 – 3%
  • level 4 – 2%
  • level 5 – 1%

Note that to receive the Coded Bonus Match, an affiliate must be higher ranked than the downline affiliate they are earning the bonus from.

Pool Bonus

Specifics on the Pool Bonus are sketchy, with OnLegacy Network only advertising affiliates are able to “earn up to $300/month” in the bonus.

Qualification for this bonus payment requires affiliates to be a “Brand Partner or above” and maintain an “active merchant account”.

Entrepreneurial Bonus

The Entrepreneurial Bonus is a passive bonus paid to OnLegacy Network affiliates who recruit new affiliates and build a large downline:

  • Module 1 (recruit 4 affiliates and a have a total downline of at least 20 affiliates) – $120 a month
  • Module 2 (recruit 8 affiliates and a have a total downline of at least 50 affiliates) – $520 a month
  • Module 3 (recruit 12 affiliates and a have a total downline of at least 100 affiliates) – $1300 a month
  • Module 4 (recruit 16 affiliates and a have a total downline of at least 500 affiliates) – $6700 a month
  • Module 5 (recruit 20 affiliates and a have a total downline of at least 1000 affiliates) – $15,000 a month

For Modules 1 to 3, up to 40% of the total downline requirements can come from any one unilevel leg. For Modules 4 and 5, this percentage is lowered to 30%.

Note that the following active customer criteria must also be met:

  • Module 1 – 2 active customers
  • Module 2 – 3 active customers
  • Module 3 – 5 active customers
  • Module 4 -10 active customers
  • Module 5 – 20 active customers

Again OnLegacy Network fail to define what active customers are.

 

Update 23rd September 2015 – OnLegacy Network’s compliance department have confirmed that “active customer” are retail customers. They cannot be affiliates. /end update

 

Joining OnLegacy Network

Basic affiliate membership (Beginner System) with OnLegacy Network is $58.

Affiliates are also able to sign up with “inscription systems”, which qualify an affiliate to sell merchant services:

  • Basic System – $279
  • Advanced System – $554
  • Total System – $1079

The primary difference between the above inscription systems is:

  • Basic System unlocks merchant services commissions (upfront)
  • Advanced System unlocks telecommunications commissions
  • Total System unlocks residual merchant commissions

Note that all OnLegacy Network affiliate options require an ongoing monthly payment of $29 (commission qualification).

Conclusion

Assuming the merchant services offered through OnLegacy Network are above board, the offering and how it’s marketed is pretty solid.

Unfortunately however it’s let down by glaring compliance issues found throughout OnLegacy Network’s compensation plan.

For starters, if you isolate third-party services offered, OnLegacy Network itself functions as a chain-recruitment scheme.

I sign up, pay large upfront fees to unlock various commissions and then get paid recruiting other affiliates who do the same.

Those commissions are paid out of affiliate fees, as no retail sales are required to generate the recruitment commissions.

Much hinges on OnLegacy Network’s definition of “active customer”, with a requirement that they be retail customers going a long way to legitimize the opportunity.

I suspect however that recruited affiliates count as active customers (Advanced and Total System affiliate membership comes with a cell service for example), thus reducing the requirements to affiliate recruitment quotas.

This is inline with the rest of OnLegacy Network’s qualifications, which explicitly see affiliates required to meet recruitment quotas in order to advance in rank.

 

Update 23rd September 2015 – OnLegacy Network’s compliance department have confirmed that “active customer” are retail customers. They cannot be affiliates. /end update

 

And speaking of ranks, clarification as to what the Partner Ranks are and how an affiliate qualifies for them would go a long way.

This and a definition for Active Customers needs to be provided on the OnLegacy Network website sooner rather than later, lest those doing their due diligence on the opportunity not have enough information presented to make an informed decision.

The second biggest red-flag with the OnLegacy Network compensation plan is the Entrepreneurial Bonus.

I sign up as an affiliate, focus on recruiting either Advanced and Total System affiliates (which meets my active customer requirements), and then get paid up to $15,000 a month (provided I can get my downline to focus on the same).

This, as far as I can see, has nothing to do with selling products or services to retail customers, and is a glaring compliance issue.

It essentially reduces Advanced and Total System affiliate membership to an investment position, with a monthly passive ROI kicking in once enough subsequent investments have been made.

That would obviously be constituted a securities offering, and I didn’t see anything about OnLegacy Network being registered with the SEC on their website.

All in all OnLegacy Network do appear to have a legitimate merchant services offering. But if they want to distance themselves from yet another opportunity where offered services are just a front for recruitment, issues within the business opportunity need to be addressed.

Failing that, commissions die off when the recruitment stops, with anyone who failed to recruit enough new OnLegacy Network affiliates losing out.