SECTION 2 – BECOMING A FFi INDEPENDENT DISTRIBUTOR

2.1     Distributor Enrollment.

An applicant may mail the FFi Distributor Agreement along with Starter Kit payment to FFi’s corporate offices; enroll on the replicated website of his or her sponsor.

The term of the Distributor Agreement is one (1) year from the date of its acceptance by FFi.  Distributors must renew their Distributor Agreement each year by paying an annual renewal fee of Forty-Nine and 95/100 Dollars ($49.95) on or prior to the anniversary date of their Distributor Agreement, unless the Distributor has attained 200 BV of personal sales volume during the year (based on the distributor anniversary date).  As long as 200 BV of personal sales volume is attained in the 365 days prior to the anniversary date, the annual renewal fee will be waived for that year.  If renewal is not made within thirty (30) days after the expiration of the current term of the Distributor Agreement, the Distributor Agreement will be terminated.  The Automatic Renewal Program (ARP) may be utilized to avoid any delay.

2.2     Distributor Rights.

All FFi distributors are authorized to sell FFi products and to participate in the FFi Compensation Plan.  All FFi distributors may sponsor new distributors.

2.3     Legal Age.

A distributor must be of legal age in his or her country or state of residence to be a FFi distributor.

2.4     Married Couples.

Each participant or legal entity is limited to (1) one distributorship.  Husbands, wives or common-law couples (collectively “spouses”) who wish to become a FFi distributor must enroll as one (1) FFi entity and may not be associated, directly or indirectly, with distributor positions in other distributor organizations.  The action of one spouse will be attributed to both spouses and, therefore, the distributor position.  In the event that two (2) distributors marry, they may each maintain the distributor positions they had previous to the marriage.

2.5    Corporations, Partnerships and Trusts.

Corporations, limited liability companies, partnerships and/or trusts may become distributors ONLY when the completed Distributor Agreement is accompanied by  copies of the incorporation, articles of incorporation, articles of organization, partnership agreement or trust document or other charter or organic document as filed with the state (where applicable).

To ensure compliance with the Distributor Agreement, distributors must disclose a complete list of all directors, officers and shareholders involved in the corporation.  Limited liability companies must disclose a complete list of all members, officers and managers.  Partnerships must disclose all general and limited partners.  Trusts must disclose the trustee(s) and beneficiary/beneficiaries.  This information may be faxed or emailed to FFi must be updated by the distributor.  Proof must be provided of a Federal Tax ID number and a copy of the annual certification from the Secretary of State issued in the state of incorporation, organization, and partnership registration.  If any shareholder, partner, member or manager of a distributor is itself an entity, then the information required above for the distributor shall also be required for such shareholder, partner, member or manager.

Shareholders, members, partners, beneficiaries and trustees, as applicable, agree to remain personally liable to FFi and bound by the Agreement.  A completed “Operating Under a Business Name” or DBA (Doing Business As) form must be on file with FFi.  In any distributor position involving the efforts of more than one individual, whether as a corporation, partnership, limited liability company or trust, the actions of one participant shall reflect on the distributorship as a whole.  If one participant is found to have violated the terms and conditions of the Agreement, then the distributorship as a whole will be considered to be in violation.

2.6     Fictitious and/or Assumed Names.

A person or entity may not apply for a distributorship using a fictitious or assumed name or use the identity of another person or entity that will not be associated with the distributorship.  No one may enter a Social Security Number or Federal Identification Number that was not assigned to the primary individual or entity on the distributorship.

2.7     Tax Identification Number.

All U.S. distributors are required by federal law to obtain a Social Security Number or Federal Identification Number and provide it to FFi.  FFi will use that number for all government reporting purposes.

2.8     Taxation.

FFi distributors will be treated as independent contractors for federal and/or state tax purposes.  As independent contractors, distributors will not be treated as employees, franchisees, joint venturers, partners, or agents with respect to the Internal Revenue Code, Social Security Act, Federal Unemployment Act, State Unemployment Act, or any other federal, state or local statute, ordinance, rule or regulation.  Distributors are responsible for the payment of all income, self employment and other taxes relating to their business and earnings.  At the end of each calendar year, FFi will issue an IRS Form 1099 Misc. for non-employee compensation for distributors as required by law.