Fees, Recruiting and Support
2-A Fees
A daily membership fee may be charged to cover operational cost such as rent, utilities, etc.; these membership fees should not represent the price or cost of products, which may be offered to members and their guests for consumption.
2-B Club Attendance Not Mandatory
Attending Club sessions is a personal decision for the member or guest (whether or not he or she is a Distributor); Club operators must never state or imply that there is an obligation to attend.
2-C Inducement to Sell Other Products or Services, Cross Selling and Soliciting
The Rules and Conduct and distributor Policies applicable to all Herbalife Distributors include the following rules:
Rule 8-A Inducement to Sell Other Products or Services
During the course of a Distributorship and for one year thereafter, neither the Distributor nor their spouse, or any other person assisting in a Distributorship will, directly or indirectly (through or by means of any person, entity or artifice), solicit, promote, sponsor or recruit any Herbalife Distributor or any Herbalife customer they became aware of in the course of their Herbalife Distributorship, to join, promote, sell or purchase products of, or participate in as a salesperson or otherwise, any multi-level marketing or direct-sales company, nor will they
Encourage anyone to do what is prohibited under this rule.
Any infraction of this Rule is a violation by both the Buyer and Seller and is likely to result in sanctions up to an including termination of the Distributorships involved.
Rule 11-B Inducement to Change Sponsors
In order to protect the sponsor, no Distributor may interfere with the relationship between another Distributor and their Sponsor in any way. A Distributor may not offer, entice, encourage, solicit, or otherwise influence or attempt to persuade another distributor to change their Sponsor or line of sponsorship, either directly or indirectly.
In addition, the following restrictions apply with regard to the operation of a Nutrition Club:
- No Distributor or their spouse, and no person assisting in a Distributorship or Nutrition Club, may target members of another Nutrition Club (whether or not those targeted are Distributors) to become a member or attend any other Nutrition Club, nor will they encourage anyone to do what is prohibited under this Rule.
- It is a violation of Herbalife’s Rules if a Distributor sells Herbalife products to another Distributor, if the Seller is someone other than the Buyer’s Sponsor (or first upline supervisor if their Sponsor is not a Fully Qualified Supervisor), or the Buyer is eligible to buy product at a 50% discount from the Company.
2-D Member Referral Incentives
Club operators may offer reasonable, in-kind rewards, such as free products, for the referral of new members, but Club operators are prohibited from paying cash or cash equivalents for such referrals.
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Serving and Selling Products
3-A Authorized Herbalife Products Only
Only authorized Herbalife products for the Hong Kong may be provided for consumption while operating a Nutrition Club. Non-Herbalife products may not be provided, sold or promoted on the Club premises.
3-B Product Consumption
Nutrition Clubs are social gatherings, bringing people together with a focus on good nutiriton. They are not retail stores or outlets, nor are they restaurants or carry-out establishments.
Subject to this restriction, Club operators may offer complimentary products such as shakes, teas and herbal Aloe concentrate. Club operators may post a list of available flavors of shakes and teas, as well as any optional ingredients such as protein or fiber, but consistent with the proper operation of a Nutrition Club they may not post, list or charge individual prices for these products or ingredients. The only permissible Nutrition Club fees are daily membership fees to cover operational
costs such as rent and utilities.
In the Nutrition Clubs and elsewhere, Herbalife products must always be served,
Consumed and applied in accordance with the instructions on the printed product labels.
Carry-outs
Although it is preferable that all product offerings be consumed on the Club premises, registered Club members may carry-out one shake per day.
Carry-outs must be in unbranded containers of not more than 12 oz. (or 354mL)
in capacity. Carry-outs may only be for the personal consumption of that Club member, or another registered Club member. Carry-out is limited to shakes and does not include tea ore Herbal Aloe Concentrate.
Product Retailing
Nutrition Clubs are social gatherings, bringing people together with a focus on good nutrition. They are not retail stores or outlets, nor are they restaurants or carry-out establishments.
Club operators may keep product inventory on hand, and they may sell their inventory at retail. However, products may not be displayed in a manner that is visible to persons on the outside, and displays may not exceed more than one container of each type of Herbalife product. An official Herbalife product catalog may be made available to Club members, but product pricing may not be posted.
Club operators may not pressure their members or guests to buy the products, and may not state or imply that product purchases are required in order to enter, attend, become a member, or remain a member of the Club.
3-E Sales of Loose Tablets and Single ServingsProhibited
All Herbalife products must be sold unopened and in their standard Herbalife packaging.
Products which are not packaged and labeled for individual sale as individual units or single servings may not be sold in the Nutrition Clubs (or elsewhere).
This prohibition includes, but is not limited to:
- Single tablets, or Distributor-created combinations of tablets
- Single servings of Formula 1 Shake or Shake Mix
- Single servings of tea or individual tea packets
Subject to this restriction, Club operators may offer complimentary products such as shakes, teas and herbal Aloe Concentrate. Club operators may post a list of available flavors of shakes and teas, as well as any optional ingredients such as protein or fiber, but consistent with the proper operation of a Nutrition club, they many not post, list or charge individual prices for these products or ingredients. The only permissible Nutrition Club fees are daily membership fees to cover operational costs, such as rent and utilities.
3-F Mixtures
Club operators may not mix shakes or teas using alcoholic beverages, medications or other inappropriate ingredients.
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3-G Product Packaging and Display
Club operators may display one unit per product of Herbalife products unopened and in their standard packaging, but such display may not be visible to persons on the outside.
When preparing shakes, teas and Herbal Aloe concentrate for consumption, these products must be available for inspection by members and guests (again, unopened and in their standard packaging).
3-H Proper Disposal of Product Containers
To protect against those who might seek to counterfeit Herbalife products, Club operators are required to deface or destroy product labels and containers before disposing of empty containers.
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Marketing, Promotion and Advertising, Including Claims/Testimonials
4-A Testimonials/Product Claims
Club members may share their experiences from using the products, but the products are not intended to diagnose, treat, prevent or cure any disease or medical condition, and under no circumstances should there be any statements or implications to the contrary, whether by the operator or by members or guests who are offering testimony.
4-B Testimonials/Income Claims
Income and earnings testimonials, whether made orally at a Club event or in writing in Club-related materials must be appropriately disclaimed, orally and/or in writing.
The appropriate disclaimer is:
Income reported in Nutrition Club materials, or in oral testimony at Club gatherings, is applicable to the individuals (or examples) depicted and not average.
4-C Offering Nutritional Advice to Members and Guests
Club operators may offer the general health, wellness and nutritional information which are a part of their daily activities as Herbalife Independent Distributors. This includes guidance about the products, their usage and their key benefits, as well as information about the business opportunity. Operators may also provide appropriate product and income testimonials both orally and in writing (accompanied by Herbalife’s required disclaimers).
However, club operators may not state or imply that using the products will diagnose, treat, prevent or cure any disease or medical condition, and all information which is given to Club members should be consistent with the information which is provided in Herbalife support materials and publications, both in general and for specific products.
4-D Advertising
Nutrition Clubs are social gatherings publicized exclusively through word of mouth and attended only by persons who are personally invited by the Club operator, another Herbalife Independent distributor or a customer, either through oral conversation or through conversation accompanied by the provision of a written invitation.
Nutrition Clubs are not intended to nor may they attract or serve “walk-in” traffic. Accordingly, club operators may not use any advertising materials, including, but not limited to, materials on the interiors of their clubs in a manner that is visible to persons on the outside. The following forms of advertising are not permitted:
- Posters and banners
- Flyers
- Handbills
- Television
- Radio
- Newspapers
- Magazines
- Phone books
- Internet
4-E Personal Websites
- Password-protected websites that are not accessible by the general public, dedicated or partially dedicated to Nutrition Clubs, may be operated subject to their full compliance with Herbalife’s Rules.
- Non-password-protected websites, accessible by the general public, are permitted with regard to a Distributor’s overall Herbalife business, but not with regard to Nutrition Clubs specifically. A publicly accessible website may only provide the following Nutrition Club information:
- Name of Club and Club operator
- Address of club
- Map/directions
- Phone number
Any other information specific to Nutrition Club(s) which is posted on publicly-accessible websites will be considered and treated as prohibited Nutrition Club advertising.
4-F Nutrition club signage Restricted
Because Nutrition clubs are not retail establishments for the sale of products, Nutrition Clubs are subject to the following restrictions with regard to signs.
Clubs operating from residential locations: Home Club operators may not use exterior signage of any kind, nor may they use interior signage visible to persons outside.
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