distributorships. Emphasis on selling franchises rather than the product
eventually leads to a point where the supply of potential investors is
exhausted and the pyramid collapses. At the heart of each pyramid scheme
there is typically a representation that new participants can recoup their
original investments by inducing two or more prospects to make the same
investment. Promoters fail to tell prospective participants that this is math-
ematically impossible for everyone to do, since some participants drop out,
while others recoup their original investments and then drop out.
CASE STUDY
If an employee came to you and stated ...
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