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Trace what each participant buys and may recruit
RSA 358-B addresses participants investing and receiving rights to recruit others for economic gain, with those participants also investing and receiving recruiting rights. A master-franchise label, recruitment fee alone or genuine support work alone does not establish every element.
For example, a regional partner paid when operators join, where operators may buy rights to recruit further operators, needs the actual investments, rights and compensation source traced through each level. Separating customer-service revenue from joining/recruitment payments is an optional way to expose those facts, not a safe harbour.
A cap does not change a prohibited structure
The law says participant limits or eligibility conditions do not themselves change the identity of the defined scheme. Offering only ten regional territories therefore does not answer the test.
Where the prohibited device is established, the chapter prohibits promotion, offering or granting participation. Review the actual structure before recruitment, without treating every master or multi-level arrangement as unlawful.
Scope
- Only RSA 358-B’s specified branch is reviewed. Franchise disclosure, consumer, dealer and operating requirements remain separate and are not assumed absent.
Next step
Clarify required investments, successive recruiting rights and compensation before promoting participation.
Sources & review notes
New Hampshire General Court
Passage, dates and research notes
primary · 358-B: 1–: 5
does not change the identity of the scheme
Full chapter read. Recruitment-for-gain on required investment triggers are specific; a legitimate master franchise is not automatically unlawful.
Detailed rule records (1)
RSA 358-B defines a chain-distributor scheme around a required investment and a right to recruit for profit others who make an investment and receive recruiting rights. Limiting the number of participants does not itself change the scheme’s identity; promotion, offer or grant of participation is prohibited.
New Hampshire RSA 358-B: chain distributor schemesKeep this reading in your learning library.
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