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re: FlexKom aka Flexcom aka Weeconomy - legitimate MLM or scam ??
Schulenberg &Schenk
ATTORNEYS
This evaluation of the marketing plan of Flexkom International Holding AG was prepared in
German for the German market by Schulenberg & Schenk, Attorneys at Law, Hamburg. The
German evaluation was translated by the translation agency Schnellübersetzer GmbH,
Cologne.
Our file number: 2607/13 SC01 NND34118 Hamburg, 09 August 2013
Assessment of the marketing plan of FlexKom
Ladies and Gentlemen:
We have evaluated the lawfulness of your marketing plan in accordance with the documents
"Flex-Kom_Business_Praesentation_DTS_051212 original"
and
"marketing-last Kopie"
as well as the information you provided.
Subject matter of this evaluation is whether the sales system satisfies the requirements
mandated of a legal sales system. Section 16 subsection 2 UWG (the ban of progressive
customer acquisition) and No. 14 Annex to Section 3 subsection 3 UWG (the ban of pyramidal
marketing schemes) apply.
In the latest rulings (OLG Frankfurt/Main, ruling from 12 May 2011, case number 6 U 29/11
and ruling from 19 May 2011, case number 6 U 286/10) , the courts assume that the chain
element typical for multi-level marketing schemes is missing if the focus is on the product and
not on the recruitment of new consultants. It then lacks the gambling-like character (cp. LG
Offenburg, WRP, 1998, 85).FlexKom International Holding AG • CH-Switzerland • 8280 Kreuzlingen • Burgstrasse 8
E-Mail: zentrale@flexkom.com • Internet: FlexKom International Holding AG • Telephone: +41(0) 715 / 88 03 55
Managing Director: H. Guido Gmür • CH-440.3.027.259.0 ROC Kanton Thurgau
A significant characteristic for the system to be legitimate is first that the sales partner receives
a value in exchange for his or her initial investment. The FlexKom system provides the sales
partner a real value in form of personalized QR code apps. Each of these apps contains 2
FlexMoneys, which have a real value of € 2.00 and can be used for purchases at respective
stores and in addition, they can be used to make free phone calls.
If starting with the E-BIZ kit for €199.00, the sales partner receives 100 QR code apps worth €
200.00. If starting as Junior Team Member for € 399.00, the sales partner receives apps worth
€ 600.00 and as Business Team Member for € 799.00; the sales partner receives apps worth
€ 1,000.00. Finally, if the sales partner starts as Global Team Member and pays € 1,490.00,
he or she receives apps worth € 2,000.00.
Therefore, the sales partner receives real value in exchange for his or her initial investment.
At the start of the business, the FlexKom system is not designed to offer sales partners the
option to acquire a career level. There is no incentive to make an investment as great as
possible to receive any higher commission for recruiting new sales partners. Regardless what
starter set someone chooses, one starts always at the level of team member.
The fact that sales partners are only entitled as Global Team Member to acquire acceptance
points for the system is owed to the circumstance that more in-depth training is required for
this activity. The training sessions with external trainers can be attended at no cost at the
Flexkom Academy.
In addition, the position of the Global Team is limited in relation to the population and
therefore, the potential card owners.
In addition, the rulings (OLG Frankfurt/Main, loc.cit.) require that the sales partner have
financially attractive alternatives to acquiring new sales partner. However, this is the case with
the FlexKom system. Each level of the compensation plan can be achieved by recruitment of
new customers for apps or cards. In this context, it should be noted that the recruitment of
customers for apps or cards is overall not done by the sales partner but through the
appropriate acceptance points. Moreover, apps or cards are easily marketed because they do
not cost and the card owner receives a discount on his or her purchase at the issuing
acceptance point. However, the recruitment of apps or card customers is not only financially
attractive because of the upward career plan. In addition, sales partner receive a commission
on each use of apps or cards starting with phase 3. Experience from Turkey proves that the
sales partner receives a monthly commission of approx. € 3,000 on 10,000 card owners. A
total of 93% of the sales and commissions come from sales generated through the use of apps
and cars and only 7% of commissions are generated by the development of the distribution
system.
Therefore, the distribution system focuses clearly on marketing cards or apps and not on the
recruitment of new sales partners.FlexKom International Holding AG • CH-Switzerland • 8280 Kreuzlingen • Burgstrasse 8
E-Mail: zentrale@flexkom.com • Internet: FlexKom International Holding AG • Telephone: +41(0) 715 / 88 03 55
Managing Director: H. Guido Gmür • CH-440.3.027.259.0 ROC Kanton Thurgau
Moreover, sales partners are granted a right of cancellation and return by the FlexKom
system. It gives the sales partner the right to cancel his or her contract within 2 weeks, to
return the apps or cards and to receive his or her investment back. The OLG Frankfurt/Main
(loc. cit.) has the following opinion about this, it states that "such return options are typically
not granted in pyramidal sales schemes because these ask regularly for initial investments
and any return of it is excluded so that these investments can only be amortized by the
recruitment of new customers and the promise of respective benefits."
Therefore, granting the right to cancel and return is another important evidence for the
lawfulness of the FlexKom system (cp. Harte/Bavendamm, UWG, 2nd Edition, margin number
42 to Section16 UWG; Leible WRP, 1998, 18, 20).
Conclusion:
Therefore, the FlexKom marketing plan is not a multi-level marketing scheme but a legal sales
system under the illustrated requirements.
With kind regards,
Stephan R. Schulenberg LL.M. Eur
Attorney
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