Compliance framework
How the BeautyShop Referral Network is designed to comply with Canadian law and to be adaptable across countries.
Multi-level marketing is legal in Canada; pyramid selling is a criminal offence. The line is drawn by what causes compensation to be paid. Our plan pays only when genuine products are sold — never for recruitment. Below is the framework we apply, built around sections 55 and 55.1 of Canada's federal Competition Act and Criminal Code s. 206(1)(e), with equivalent principles applied market by market.
1. Compensation from sales, never recruitment
No participant is ever paid for the act of recruiting. The US$400 direct commission is a sales commission on the purchase of a genuine franchise product (US$899) that is fully delivered: store, domain, branding, marketing kit, sourcing and payment infrastructure. Overrides are only triggered by product sales in the network.
2. Free participation
Joining the referral network is free. There is no membership fee, no mandatory monthly payment, and no purchase required to become or remain commission-eligible.
3. Products with genuine independent value
Our star products, white label lines and franchise packages are bought by real customers who may never participate in the network. Retail customers can purchase without joining anything.
4. No inventory loading
The model is dropshipping-first. No participant is required to purchase stock to qualify for commissions or ranks, and commercially unreasonable inventory purchases are not permitted.
5. Buy-back and returns
Participants who purchase products benefit from a commercially reasonable return and buy-back policy, and are informed of it before purchase.
6. Income representations
Any earnings representation is accompanied by fair, reasonable and timely disclosure of typical participant compensation. Earnings are not guaranteed and may be zero.
7. Capped, diminishing overrides
Overrides follow a geometric formula — Generation N receives 10% × (1/2)ᴺ of a qualifying sale — so the total override pool never exceeds 10% of any sale, regardless of network depth. Unlimited depth never creates unlimited payout liability.
8. Regulatory review before launch
We pursue written opinions from the Competition Bureau of Canada on our compensation plan, and country-specific legal review before the network opens in any new market. Provincial direct-selling and consumer-protection rules are addressed per jurisdiction.
This page describes our design principles and is provided for information only. It is not legal advice. The program is offered only in markets where it has cleared local legal review.