Cash Dojo Review: Penny auctions via a complicated mess
There is no information on the Cash Dojo website indicating who owns or runs the business.
The Cash Dojo website domain (“cashdojo.com”) was registered on the 11th of May 2007, however the domain registration is set to private.
The earliest record I was able to find of Cash Dojo existing is the claim on the company’s LinkedIn profile that it was founded in 2013.
The Cash Dojo Terms and Conditions meanwhile represent the company as being based out of Cyprus:
This site (excluding third party linked sites) is controlled by the Company from its offices within Nicosia, Cyprus.
This would appear to be a misrepresentation of Cash Dojo, with the company’s Privacy Policy containing contradicting information:
If you have any questions about this Privacy Policy, the practices of this site, or your dealings with this site, please contact us at:
The Cash Dojo Network Inc 999 Canada Place Vancouver, BC V6C 3E2 Canada
That address however belongs to Regus, who sell rented virtual office space (mailing addresses).
The Cash Dojo compensation plan documentation clears this confusion up:
Company Ownership – Cash Dojo Corporation (IBC) is incorporated in Belize.
The Cash Dojo Network Inc is incorporated in Canada.
Company Location – The Company is headquartered in Vancouver, BC Canada.
Although why Cash Dojo is incorporated in Belize of all places is unclear.
Why Cash Dojo is located in Canada however is obvious enough, it’s where President and CEO Albert Liske is located.
Albert Liske, 34, has been the Chair of the Board of Directors and Chief Executive Officer of Shoppaholic, Inc., since 2007.
He has since founded Cash Dojo Corporation, a Canadian, United States and Belizean company, and was named President and Chair.
The board also named him Chief Executive Officer of Penny Dojo Inc on December 1 and board chair on December 2 of 2013.
Somewhat confusingly, Natalie Wood is also cited as CEO of the company, with Kevin Grimes credited as the compay’s “attorney at law”.
Yes, that’s Kevin Grimes of Zeek Rewards notoriety.
I will state that the “business plan” document this information was obtained from appears to be dated late 2013 or early 2014. Whether or not Grimes is still involved with Cash Dojo is unclear.
A native of Vancouver, Canada, Mr. Liske is credited as the inventor of the modern day penny auction.
Albert Liske meanwhile first popped up on BehindMLM’s radar when he signed on as CEO of the Bidsson, the penny auction attached to the Bidify Ponzi scheme.
Liske resigned from the position just two months after he was appointed.
Liske then went on to publicly accuse Bidify of fraud. Citing an “amicable solution” two weeks later, Liske then dropped his campaign two weeks later.
What exactly went down between Liske and Bidify has remained a mystery.
According to the Cash Dojo LinkedIn profile, later that year Cash Dojo was Founded, with the company only recently having gone into prelaunch.
Read on for a full review of the Cash Dojo MLM business opportunity.
The Cash Dojo Product Line
The Cash Dojo Network hosts one of the largest advertising, blogging platforms and ad publishing platforms online, as well as provides high-level online educational products and services to online users.
The only Cash Dojo service I was actually able to verify was that of Penny Dojo, which is running the Penny Auction Soft script:
Penny Auction Soft has featured on BehindMLM before, as part of the Albert Liske and Bidify controversy back in 2013 (see January 29th, 2013 update).
With no listed auctions however, quite obviously the Penny Dojo website is currently non-functional.
Regardless, the Cash Dojo compensation plan mentions Penny Dojo bids as the company’s primary product.
Other products mentioned in the Cash Dojo compensation plan include “SEO products”, an energy drink, coffee and “beauty products”.
From what I’m seeing, the SEO stuff (including website hosting) is aimed at Cash Dojo affiliates, with the other products mentioned (bar the penny auction bids) currently MIA.
The Cash Dojo Compensation Plan
The Cash Dojo compensation plan is a complicated swamp of a mess, with the official documentation coming at a whopping 48 pages.
Most of it is irrelevant (for some reason they’ve combined a FAQ with the comp plan), but I’ve done my best to break it down into something that makes sense below.
Franchisees and Affiliates
Confusion in Cash Dojo begins with a three-tiered affiliate structure.
You have Bid Franchisees, Belt Franchisees and affiliates.
Bid Franchisees are the only ones who can sell Penny Dojo bids, Belt Franchisees gain access to “higher earnings” and affiliates can earn commissions on the sale of Penny Dojo bids, but they need to purchase them first from Bid Franchisees.
Belt Franchisees meanwhile are what we’d otherwise refer to as regular affiliates, with what Cash Dojo refer to affiliates not having anything to do with the MLM income opportunity.
For the sake of simplicity, I’m ignoring Cash Dojo’s “affiliates” altogether. Instead I’ve used the term to refer to what they call “Belt Franchisees”.
Cash Dojo Affiliate Ranks
There are seven affiliate ranks within the Cash Dojo compensation plan.
Along with their respective qualification criteria, they are as follows:
- Blue – spend a minimum $99.99 a month, accumulate at total of at least 300 points and generate at least $300 in retail customer sales (minimum 3 customers) or $600 in advertising revenue a month
- Yellow – spend a minimum $199.98 a month, accumulate a total of at least 500 points and generate at least $2000 in retail customer sales (minimum 5 customers) or $4000 in advertising revenue a month
- Orange – spend a minimum $299.97 a month, accumulate a total of at least 25,000 points and generate at least $25,000 in retail customer sales (minimum 250 customers) or $50,000 in advertising revenue a month
- Purple – spend a minimum $399.96 a month, accumulate a total of at least 100,000 points and generate at least $100,000 in retail customer sales (minimum 1000 customers) or $200,000 in advertising revenue a month
- Black – spend a minimum $499.95 a month, accumulate a total of at least 1,000,000 points and generate at least $1,000,000 in retail customer sales (minimum 10,000 customers) or $2,000,000 in advertising revenue a month
- Red – spend a minimum $599.95 a month, accumulate a total of at least 2,000,000 points and generate at least $2,000,000 in retail customer sales (minimum 20,000 customers) or $4,000,000 in advertising revenue a month
- Brown – spend a minimum $699.93 a month, accumulate a total of at least 4,000,000 points and generate at least $3,000,000 in retail customer sales (minimum 40,000 customers) or $8,000,000 in advertising revenue a month
“Points” are accumulated via a variety of tasks within Cash Dojo.
“Advertising revenue” refers to revenue generated via use of Cash Dojo online properties an affiliate purchases (blog page, web hosting etc.).
Rank Advancement Bonus
Cash Dojo affiliates are paid a Rank Advancement Bonus when they qualify at certain affiliate ranks for the first time:
- Orange – $25,000
- Purple – $100,000
- Black – $1,000,000 paid over 12 months
- Red – $2,000,000 paid over 12 months
Retail Commissions
Retail commissions are paid out on the sale of Cash Dojo products and services to retail customers (non-affiliates).
How much of a commission is paid out is determined by a Cash Dojo affiliate’s rank:
- Blue – 15%
- Yellow – 20%
- Orange – 25%
- Purple – 30%
- Black – 35%
- Red – 40%
Residual Commissions
Cash Dojo affiliates can earn commissions on the sale of Cash Dojo products to retail customers.
Commissions are paid down four levels of recruitment, using a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any of these level 1 affiliates recruit new affiliates of their own, they are placed on level 2 of the original affiliate’s unilevel team.
If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a total of four levels.
How much of a commission is paid out is determined by what level within a unilevel team a product or service sale was made:
- level 1 – 20%
- level 2 – 15%
- level 3 – 10%
- level 4 – 5%
Bid Commissions
The sale of Penny Dojo bids attracts a commission, however only “Bid Franchisees” can sell Penny Dojo bids.
Penny Dojo bids retail for $1 each and are sold in bundles (no specific price for bundled is provided either on Penny Dojo website or in the Cash Dojo compensation plan material).
For each pack sold (be it directly to retail customers or to Cash Dojo affiliates for resale, Bid Franchisees earn up to a 40% commission.
How much of a commission is earnt by a Bid Franchisee depends on how much they spent on their Franchisee membership:
- $500 Bid Franchisee – 1% (residual down 1 level of recruitment)
- $5000 Bid Franchisee – 10% (residual down 3 levels of recruitment)
- $10,000 Bid Franchisee – 20% (residual down 5 levels of recruitment)
- $15,000 Bid Franchisee – 30% (residual down 7 levels of recruitment)
- $25,000 Bid Franchisee – 40% (residual down 10 levels of recruitment)
Note that Cash Dojo affiliates who resell the bids are paid a separate percentage commission to their regular retail sales commission.
How much of a commission a regular affiliate earns on the reselling of a bid pack to a retail customer is determined by their Cash Dojo affiliate rank:
- Blue – 3%
- Yellow – 5%
- Orange – 7%
- Purple – 8%
- Black – 9%
- Red – 10%
Residual commissions on pack sales are also paid (same rules using the unilevel structure outlines in “residual commissions above”), but with the following percentage amounts:
- Blue – 7%
- Yellow – 5%
- Orange – 3%
- Purple – 2%
- Black – 1%
- Red – no residual
These percentages appear to be in reverse. I’ve copied them verbatim from the Cash Dojo compensation plan but I suspect 0% is supposed to be the white affiliate rank (no MLM).
Auction Revenue Commission
Each Penny Dojo auction has a generated revenue amount, based on the amount of bids used in the auction (revenue is generated when the bids are sold, but for the purpose of commission calculation the same term is used to refer to the value of the bids used in an individual auction).
Cash Dojo split this revenue with the affiliate who sold the winning bid to the auction winner:
- Blue – 8%
- Yellow – 10%
- Orange – 12%
- Purple – 14%
- Black – 16%
- Red – 18%
- Brown – 20%
Check Match Bonus
Using the same unilevel structure used to pay residual commissions, Cash Dojo pay a 10% matching bonus on residual commissions paid to unilevel team affiliates between levels 5 and 10.
How many levels a Cash Dojo affiliate can earn the Check Match Bonus on is determined by their affiliate rank:
- Yellow – level 5 only
- Orange – levels 5 and 6
- Purple – levels 5 to 7
- Black – levels 5 to 8
- Red – levels 5 to 9
- Brown – levels 5 to 10
Car Bonus
To qualify for a $2000 a month Car Bonus, a Cash Dojo affiliate must have
- a minimum 5 personally recruited affiliates on level 1 of their unilevel team, each generating a minimum 1000 Dojo Dollars a month
- a minimum 25 recruited affiliates on level 2 of their unilevel team, each generating a minimum 1000 Dojo Dollars a month
- a minimum 125 recruited affiliates on level 3 of their unilevel team, each generating a minimum 1000 Dojo Dollars a month
Franchisee Bonus Pools
The Franchisee Bonus Pools are made up of 15% of the company’s global non-affiliate sales volume (sales to retail customers).
There are four pools in total, with affiliates able to qualify for a share in each as determined by their Cash Dojo affiliate rank:
- Core Pool (1%) – pay monthly affiliate fee
- Purple Pool (4%) – qualify at the Purple Belt rank or higher
- Black Pool (5%) – qualify at the Black Belt rank or higher
- Red Pool (5%) – qualify at the Red Belt rank or higher
Note that these pools are accumulative, with higher ranked affiliates able to qualify for a share in each of the four offered pools.
Joining Cash Dojo
Affiliate membership with Cash Dojo is tied to an affiliate’s rank.
This pegs the cost of Cash Dojo affiliate membership between $99.99 and $699.93 a month.
A Franchisee position costs between $500 and $25,000, and is in addition to regular Cash Dojo affiliate membership.
The main difference between how much is spent on affiliate and franchisee membership is income potential through the Cash Dojo compensation plan.
Conclusion
Back in 2013 when it was founded, Cash Dojo might have had a shot. What with penny auctions being all the rage after Zeek Rewards.
Unfortunately what Zeek Rewards and every MLM penny auction after it showed us was retail interest in the niche was non-existent.
To combat this Cash Dojo plan to release “me too” mobile games, which they claim are “based on some of the most popular viral concepts seen in the past 3 years.”
Why anyone would waste their time on clones of games that are already out beats me, but Cash Dojo seem to think it will work.
Behind these games are Dojo Dollars, which are an inhouse currency system used to bid on “sweepstakes” Penny Dojo auctions.
At this point I have to note there might be something else to Dojo Dollars, with my own research uncovering what appears to be attempts at a cryptocurrency:
Whether or not Cash Dojo launches its own cryptocurrency remains to be seen.
In any event, getting customers to play games and spend free points in Penny Dojo auctions won’t necessarily convert them into retail customers.
And what with Zeek Rewards being an $850 million dollar Ponzi scheme and the most succesful of the MLM penny auctions to date, Cash Dojo certainly have their work cut out for them.
The MLM penny auction niche has been home to a number of Ponzi schemes over the years, leaving a bad taste in mouths of both MLM affiliates and customers.
Discounting the history of the niche though, what Cash Dojo offer up is unnecessarily complex and, in my opinion, unlikely to take off.
The bid distribution model is kind of silly. You’ve got people who buy into Cash Dojo to the tune of $25,000, as the only ones who can actually sell the bids.
What happens if enough of them drop off and give up? No idea, but as it stands both affiliates and customers cannot purchase bids from Cash Dojo itself.
Otherwise Penny Dojo is nothing we haven’t seen before. Bidders pay real money for a shot at winning a “prize” at a deeply discounted rate, with the model relying on everybody except the auction winner getting ripped off (spending money and having nothing to show for it), in order for each auction to turn a profit.
Lose enough consecutive auctions and it doesn’t take long for retail customers to realize they’re being taken advantage of. Hence the complete lack of retail viability we’ve thus far seen in the niche.
Will some mobile games and a virtual currency change that? I doubt it.
I’ll also note some concern over the “buy-back” rule, which permits an auction winner to “sell” any product one back to Cash Dojo, for 80% of the advertised retail value of the prize.
Given that penny auction prizes aren’t typically stocked in inventory unless an auction is won, this effectively turns every Penny Dojo auction into a cash auction.
That brings with it regulatory issues, as you’re essentially auctioning off cash.
Penny Dojo auction concerns aside, what’s then left is an eclectic mish-mash of products and services offered – leaving Cash Dojo a difficult opportunity to explain because there’s nothing really tying any of it together.
Coffee, energy drinks, a blog platform, SEO and hosting services… what on Earth is the linking factor behind Cash Dojo’s product combination?
No idea… but combined with an overly complex compensation plan, you can bet it’s going to be a hard sell – both in terms of retail customer acquisition and affiliate recruitment.
Good luck explaining Cash Dojo to anyone in less than five minutes, by the time you’ve finished explaining just the Bid Franchise component you’ll have probably already lost them.
Ultimately based on the lack of traction the MLM penny auction niche has (it’s currently well and truly dead), I believe what we’ll see with Cash Dojo is a small number of Franchisees sign up, hype (or attempt to) the opportunity and then wonder where their money went.
Cash Dojo affiliate membership in and of itself is unattractive with the Penny Dojo auctions as a lead service (having to buy bids from other affiliates who paid more money to join than you? Please…). The rest of the product offering doesn’t really help, with everything available elsewhere through far more specialized and refined MLM companies.
Too little too late Liske. The time for resurrecting what you thought Bidsson was going to be has long-since passed.
Thank you for taking the time to review the Cash Dojo Network.
I think it’s important to note a few things for your readers that you might have missed.
– Cash Dojo introduces a unique crypto-reward program (much like airmiles).
People earn Dojo Dollars when they download and use our apps and games. We incentivize game play and app use. The Dojo dollars are used to bid on Dojo dollar auctions in the Penny Auction.
These items are under $25 and serve as a free and excellent introduction to new customers to the penny auction concept.
– Cash Dojo is selling Franchises and there is a formal process involved in purchasing a bid franchise. This includes reviewing our Franchise Disclosure Document. In some cases bid franchises are not available to certain states.
– Everyone in the network (free affiliates or belt franchises) can sell bids. These bids however come from bid franchise owners. This means that the Penny Dojo website does not compete with it’s affiliates.
– Only 14 minutes is required to understand the concept.
youtube.com/embed/aOi_k6o4quU
What would happen is every Bid Franchisee owner quit? Y’know, given you’re only going to sign up so many of them.
I required much more than 14 minutes to get my head around the comp plan. You’re dreaming if you think anyone is going to digest a wordy 40+ page comp plan in a quarter of an hour.
That is an excellent question and I am happy to answer it for you.
The Cash Dojo Bid Franchise program is designed with this concern in mind. Each purchased franchise has a fixed 5 year term (please review our franchise disclosure document and franchise agreement for more information about this).
Everyone in the network can sell bids, however all the bids sold MUST come from a franchise. This makes these franchises highly valuable.
All bids sold under this program are sold at cost. Any franchise sold includes an equal amount of retail bids. Everyone that signs up at Penny Dojo as a retail customer or sponsor is automatically purchasing bids from these franchises.
Hypothetically if all the franchises decided to stop, Penny Dojo this would not occur all at once. The volume of bids automatically being sold by remaining franchises would increase dramatically therefore it is highly unlikely all franchises would quit.
However, in the unlikely event of this Cash Dojo would exercise its right to repurchase a limited number of these franchises to continue operation.
The Cash Dojo business model incorporates many of the lucrative ways people earn money online into one network so it is difficult to understand the entire program immediately, each business model feeds into another.
There are many reasons why a Penny Auction MLM style model failed and we have put in a lot of thought on how we can correct this to become successful. Some of the concepts Cash Dojo offers will help the platform succeed.
– Every paid bid used in the penny auction is also one minute of International phone time. This is an added bonus to the BUY NOW function offered in every auction. If a user decides to not use the BUY NOW function then money spend on bids still offers a user value.
– Penny Auctions typically lose money on auctions sold under $25. Cash Dojo addresses this by incentivizing the mobile apps with the Dojo Dollar reward program. I know that your first thought is “The me too App Idea” won’t fly.
I have to disagree and here is why.
Our applications are addictive as it is without the ability to bid on Dojo Dollar auctions for free.
Each time someone passes a level in games or uses our apps they earn Dojo Dollars. This concept rewards users for their time and efforts and typically when FREE is included in any business model it creates a whirlwind of action.
Will this result in paid bids being sold? Absolutely! But everyone needs to keep in mind it’s the ad revenue generated that we are after.
Television and CPA offers are the reason why websites such as Quibids and Beezid generate millions of dollars a year in profits.
When you combine the Bid Franchise and incentivized app business model you have a real winning business model that compensates affiliates and franchises fairly.
Which states?
Franchise is normally about selling a complete business concept, e.g. business location, products, marketing, “visual style and branding”.
It can also be about including independant merchants into a business concept.
But it usually don’t include selling the franchise itself, “recruiting other franchisees” (e.g. a McDonald’s franchisee selling new McDonald’s businesses to others). The franchisees should normally be restricted from that type of business activity.
Have I misinterpreted something here? 🙂
what’s dat you said boss? Cash Dodo ??
my mind jus’ pulverized reading about cash dodo’s complicated ‘plan’
maybe the ‘plan’ Is to dodorize investors into investing?
“i’m so convoluted and complex, i must be a great mind at work. invest! invest!”
“Earn rewards from download and use of apps”. Understood.
“Those rewards will incetivize game play and app use”. Not necessarily. Incentives usually only have a short term effect. And here they will need to be interested in both the game and the reward (the reward won’t have any effect on people if they’re not interested in the penny auctions).
“The Dojo dollars are used to bid on Dojo dollar auctions”. Understood.
To attract a bunch of customers, the affiliates will need to promote downloads of apps. The apps will then generate rewards when people use them, and the rewards can then be used in limited amount penny auctions (“to give new customers a free trial”).
A relevant question here should be “Name some of those apps?” and “Tell us more about the number of downloads and the use of those apps?”.
That part won’t be profitable in itself. It has a marketing purpose, but it won’t generate any revenue or profit (unless you’re selling those reward apps for a price). You mentioned “download of apps”, but you didn’t mention anything about selling those apps.
That part may attract some customers to the retail bid auctions. The profit will come from selling retail bids (Penny Dojo bids) to those customers.
The marketing idea here seems to be unnecessary complicated. Have you tried it in reality, i.e. does it work?
I only have one question.
Who would spend $100’s per month on bids anywhere these days?
If I can get an answer to that my head can stop buzzing at this rediculous comp plan if you want to call it that.
“resellers”, the typical excuse of most MLMs nowadays.
But remember, TB, you “lack (their) vision”. 😀
I looked at the marketing idea in my previous post.
Promote apps (affiliates)
→ people download and use apps
→ apps generate Dojo dollars as rewards
→ people use Dojo dollars in Dojo dollar auctions
→ people get addicted to penny auctions
→ people buy retail bids from affiliates
→ sale of bids generate commissions
→ retail bids can be used in auctions
From my perspective, that idea looks rather complicated and “untested”. Franchise should normally be about complete business concepts that actually have a function.
I tried to identify a part of it. 🙂
It will probably become more understandable if I ignore that part of the vision and focus on other parts.
To be able to defend a business model legally (in court or in a market), the best way is normally to show that the business has a useful function, that it is a real business operating in a real market (or that it reasonably can be believed to be so).
Zeek’s weak spot was that it didn’t look believable enough in some parts. It looked too similar to investment, and the work looked rather meaningless (if people looked at it from the outside).
Cash Dojo has the same problem. It doesn’t look like something a judge can accept as “useful business”.
Which states?
Currently the following States are not eligible for purchasing Bid Franchises are listed in our Bid Franchise menu on our website. This however will change in the next 60 days as these States require registration and approval.
Name some of those apps?
Some of the apps can be seen here:
cashdojo.com/docs/Cash-Dojo-Franchise-brochure.pdf
The initial launch of mobile app suite includes four major android and IOS applications that are based on popular concepts (match 3) like Candy Crush for example. We will also release one app per month thereafter.
Tell us more about the number of downloads and the use of those apps?
The approximate number of downloads will vary from app to app. Revenue generated from app sales, in app purchases AND MOST IMPORTANTLY retail ad revenue will fluctuate. The vision here is reward users.
Who would spend $100’s per month on bids anywhere these days?
The Penny Auction Industry (retail) is a well established niche that generates millions of dollars a month in revenue and is a great way to save money if your looking for an entertainment auction experience.
Keep in mind that pricing on our auctions will be lower than most websites as we have established wholesale product sourcing.
Our auction will also have items on hand and this eliminates the cash auction concern on a sell back.
Example traffic estimation: alexa.com/siteinfo/quibids.com
Promote apps (affiliates)
→ people download and use apps
→ apps generate Dojo dollars as rewards
→ people use Dojo dollars in Dojo dollar auctions
→ people get addicted to penny auctions
→ people buy retail bids from affiliates
→ sale of bids generate commissions
→ retail bids can be used in auctions
→ Introduce new customers by promoting the apps (affiliates)
→ people download and use apps (generating initial app purchase revenue, in app purchasing and Ad revenue)
→ apps generate Dojo dollars as rewards for app usage
→ people use Dojo dollars in Dojo dollar auctions or for redemption in our rewards store, travel vacation network, car rental or flights
→ people get addicted to penny auctions (hopefully) or at the very least are exposed to the penny auction concept
→ people buy retail bids from affiliates
→ sale of bids and usage of bids generate commissions and bonuses
→ retail bids can be used in paid premium auctions
Correct.
– As a CPA Network Cash Dojo passes this test.
– As a Penny Auction Penny Dojo passes this test.
– As an Network Marketing company selling bids, energy drinks, SEO products, hosting and E-courses Cash Dojo passes this test.
For a more in depth examination please take a closer look at our business plan:
cashdojo.com/docs/bp.pdf
The real weak spot was that Paul was only running one auction a day. This made it impossible for bids to be redeemed within any human life time which removed the argument that bids were a revenue stream.
Cash Dojo is an attempt at righting many wrongs in the MLM & Penny Auction World.
Yes you have, but this might be our failure to explain the franchise component adequately.
The Franchises being sold have the right to use our Federally registered trademarks, include complete business guidance and training:
trademarks.justia.com/862/40/cash-86240756.html
trademarks.justia.com/862/43/penny-86243250.html
Franchises can sell or refer franchises but that in this case is not a requirement or encouraged.
Thanks for addressing the franchisee question Albert.
We’ve seen a ton of “free” mobile game centric MLM try to use this model to engage non-affiliates (Rippln being the most obvious example).
Hasn’t worked so far. Mobile gamers might be fickle but they aren’t stupid. People aren’t going to engage a game they played 2 years ago just because you slapped a new coat of paint onto it.
Those game were successful because they were innovative. Not because they just copied someone else for the purpose of marketing a an MLM opportunity.
Exactly what items are people. Bidding. On. At $1 per. Bid?
Looks like this centers around auction money and how much can be shuffled into it.
Wouldn’t the idea of a franchise means you are paying for a proven successful model of a business? Not something you hope to become a success at because they told you to spend a a lump sum up front.
Is this sale commissionable?
Exactly what items are people. Bidding. On. At $1 per. Bid?
Penny Dojo will be offering everything from high end all inclusive vacations to electronics and gift cards.
A minimum of 10 paid auctions per hour will be listed and 5 Dojo Dollar Auctions. Primetime auctions will offer more ways to win.
Is this sale commissionable?
Anyone may earn a commission on the sale of a franchise provided they are a registered franchise broker (where required in the State they reside or sign an employment contract with Cash Dojo and submit IRS filing information).
@Liske
Have you used a lawyer here?
Selling bids seems to be a disguise for selling opportunities of various types, e.g “Compliance courses” (belt system).
You don’t “make” it become a franchise by using some franchise contracts, i.e. it’s the realities of a business that determines what it is, not the contracts.
Businesses use franchise contracts because something already IS that type of business, e.g. because they’re expanding from being a one store business to become a chain of stores, and use franchise contracts instead of employment contracts because the new merchants are independant business owners.
Franchises of that type may include existing merchants owning their own stores and new merchants leasing the whole business concept (they don’t own the stores).
If you don’t really have any commercial activity it will just be a recruitment system selling opportunities. It won’t have any real commercial function, and you won’t attract any real merchants.
The primary function seems to be about selling “revenue streams” based on recruitment of a downline.
From the PDF:
Income coming from other participants in the same network is usually called “recruitment rewards”, the type of income you will find in a pyramid scheme.
If only a minor part of the income comes from the participants themselves then it can be classified as network marketing or MLM.
Have you used a lawyer here?
We have used several law firms (both MLM and Franchise Law) and have obtained an opinion letter about the program.
Franchise fraud (Wikipedia):
@M_Norway
The great news here is that the emphasis is solely on the sale of Cash Dojo products and NOT the sale of Franchises.
This is quite apparent by our compensation plan.
It is important to note that no commissions are paid on Belt Franchises at all.
That’s worrying, because it’s chain-recruitment. And at up to $25,000 a pop – that’s some huge recruiting incentive right there.
Make no mistake, whatever you call your affiliate membership (a “franchise” in this instance), paying commission on recruitment of affiliates is a regulatory red flag.
Any lawyer worth their salt should have told you that.
What you claim to emphasize doesn’t matter. The mere offering of chain-recruitment in an MLM Opportunity is the problem.
And in any event, if affiliates can make a percentage of thousands of dollars in affiliate fees that’s what’s going to be focused on.
Franchise fraud 2 (Wikipedia)
That one was a different type of franchise fraud, a “misrepresentation” type of fraud rather than pyramid scheme type.
“The laws appear to enable franchisors to withhold negative facts concerning the performance of the franchised business plan”.
That’s probably because the Wikipedia authors have looked at a specific regulation rather than the whole area of laws. Regulators won’t regulate each and every detail, most details will usually be covered by existing laws.
Additional sources:
consumer.ftc.gov/articles/0401-thinking-about-buying-franchise
en.wikipedia.org/wiki/The_Franchise_Rule
The Franchise Rule is a regulation, published by the Federal Trade Commission, a type of “specialised set of rules designed to regulate a specific area of trade”. It means that all other relevant rules also can be applied.
We’re not talking about the same thing here.
* Product is one thing.
* Product + income stream (opportunity) is a different thing.
They are legally different. The fact that you have a product or service there doesn’t make it become “selling products”. You’re most likely selling the opportunity itself.
A court or a regulator must look at the economic realities of it, e.g. how it’s being marketed, why people buy it and many other factors.
Selling an income opportunity doesn’t need to be illegal in itself, but it will usually be illegal if the opportunity is the primary “product”. It will be the same if you have one “product” of that type or multiple “products”.
And that letter said what? 🙂
One problem with specialised lawyers is that they may have a onesided focus on specific laws while ignoring other relevant laws.
* Kevin Grimes found no problems in ZeekRewards because he focused primarily on marketing laws (or something similar).
* Gerald Nehra found no particular problem in TelexFree because he focused on his own theories and experience, on certain conditions he saw as “completely legal”.
They both ignored securities laws almost completely. They used the same ideas you have used about “products”, if I have interpreted it correctly.
Paying people for recruitment isn’t illegal in itself. It CAN BE about fair compensation for work, fair compensation for expenses, other types of fair compensation for something.
So the focus will need to be on fair compensation for legitimate work. Recruitment into a Ponzi or pyramid scheme will fail to meet that legitimacy criterion. It won’t become legitimate if you add a product to the process either, products have a different function than that.
Another focus will need to be on “harmfulness” to consumers or investors, and harmfulness to the society as a whole. Legitimate business activity will usually not be harmful, or it will be more useful than harmful in the long run.
LEGAL DEFENSE FORMULA
Low degree of harmfulness (individual and society)
+ some degree of usefulness
+ some degree of fairness
= “legitimate enough to be accepted”
But it may still be in conflict with some laws. Clear violations of laws may eventually become harmful to the society as a whole if repeated by many people, even if the current case seems to be “legitimate enough to be accepted”.
The formula may work if there’s reasonable doubts about the laws, e.g. if an activity can be seen from more than one legal perspective.
CASH DOJO
Cash Dojo will probably be difficult to defend. It doesn’t reflect the required “usefulness to the individual, and to the society as a whole”.
It has a high degree of potential financial harmfulness to the average participant (to most individual ones). Usefulness to a few will not compensate for harmfulness to the many.
Recruitment systems will usually not have the required degree of fairness, e.g. the market will be saturated relatively rapidly.
It means that potential doubts about legal perspective will not count in favor of Cash Dojo.
Sadly, this program has been scrapped as it failed to take off. Oz and the rest had provided some great insight and points that really stood out and made me think about the entire program and its viability as a program.
Based on these thoughts I’ve decided to walk away and close the out the system.
I want to thank behindmlm from saving Cash Dojo from making a terrible mistake. Overall I’ve learned a lot about the Multi level marketing world and Internet marketing in general.
Thankfully we never had a single paying customer/signup. Which makes this decision much more easier.
Now I’ll turn my energy to doing something positive with my life.
I’d like to thank Kevin Grimes at Thompson & Reese for his hours of work on this program, Scott Inspetta for our insane compensation plan, our law firm at Gray Plant Mooty and most of all our Investors: Theo Warkentin, Hey Bidders LLC and Westergaard Holdings.
The biggest and hardest workers in this program easily has been Larry Huechert,Kriechbaumer, Peter Shannon and Natalie Wood.
This concept may have missed the boat or been ahead of its time, only time will tell.
Best,
Albert Liske
Cheers everyone, please keep up the great work!
– Albert
Sorry to hear things didn’t work out Albert. All the best for the future.
well, that’s something nice to take away.
hope you succeed next time with all the experience you’ve gained. MLM is good when done right.
Hi Oz! I never been in to Ufun, only worried abaut friends that still beliveå and won’t listen to facts.
Wrong Albert chief.
The trick in most markets is simply to reflect the ideas a lot of people already have and truly believe in, ideas they already have accepted. Or the ideas “the right people” have and truly believe in, and already have accepted.
A second factor is habits, the habits other people have. Most people will simply repeat the same type of behavior over and over again.
You probably made it more difficult to sell when you called it “franchise”