Franchise fraud, or chain referral schemes, are defined by the United States Federal Bureau of Investigation as a pyramid scheme – they are marketing and investment frauds, and an illegal business model that; involve participants either receiving payment or services, primarily for enrolling other people into the scheme as the bulk of the moneymaking methodology, rather than supplying any real investment or sale of products or services to the public, as the main intent of the program – wherein: an individual is offered a distributorship or franchise or some “position” inside the scheme, to market a particular product – and the real gross profit is earned, not by the sale of the product, but by the sale of new distributorships (et al) positions. These schemes masquerade as MLM programs and violate federal laws.