AdvoCare

Not to be confused with Advocare, the Medicare Advantage plan from Security Health Plan of Wisconsin.
AdvoCare International
Private
Industry Nutrition & Skin Care products
Founded Carrollton, Texas (1993)
Founder Charles E. Ragus
Headquarters Plano, Texas, United States
Area served
 United States
Key people
 Brian Connolly, CEO
Products Weight loss, nutritional supplements, sports nutrition, personal care
Revenue US$ 400 million (est.) (2013)[1]
Number of employees
 247 (est.) (2013)[2]
Website www.advocare.com

Coordinates: 33°00′38″N 96°40′37″W / 33.01053°N 96.676928°W / 33.01053; -96.676928

AdvoCare International, L.P. is an American multilevel marketing company which sells nutrition, weight loss, energy, and sports nutrition dietary supplements. The company was founded in 1993 by Charles Ragus and employs around 250 people in the United States. Its corporate headquarters are in Plano, Texas.

The company distributes its products in the United States through a network of approximately 60,000 independent distributors,[3] who participate in a compensation plan based on a multilevel marketing model.[4]

History

Charles Ragus founded AdvoCare in 1993, as a multilevel marketing company that distributes health and nutrition products.[5][6] Before AdvoCare, Ragus worked as a regional vice president for Fidelity Union Insurance, and as a multi-level marketing distributor for Herbalife. He briefly played defensive end for the National Football League's Kansas City Chiefs in the 1960s.[7][8] He died in 2001 at the age 58.[9][10]

In May 2007, Richard H. Wright became president and CEO of AdvoCare. Wright had previously served as Chief of Staff for US Representative Jim McCrery.[5][11]

Products

AdvoCare offers more than 90 general nutrition, weight loss, energy and sports performance products including Trim, Active, Well, Performance Elite, Skincare and the 24 Day Challenge.[12]

Business

AdvoCare is a multilevel marketing company.[13][14][15] In addition to revenue from product sales, AdvoCare distributors can potentially earn additional commissions from sales by their 'downline' distributors. According to the company's 2013 Income disclosure statement, the average annual income, not including expenses, for AdvoCare distributors who were 'active' in 2013 (defined as earning a payment during the year) was $1,704.08.[16]

In a 2010 court case Advocare said that it had around 60,000 active distributors, and had sold approximately 350,000 distributorships since 2003.[3]

AdvoCare is a member of the U.S. Direct Selling Association (DSA), and participated in the 2010 DSA Code of Ethics Communication Initiative.[17] AdvoCare President Richard Wright served on the DSA Board of Directors in 2011.[18]

Sponsorships and Endorsements

Among AdvoCare's contracted celebrity endorsers are NFL quarterbacks Andy Dalton, Philip Rivers and Alex Smith; Major League Baseball pitcher Doug Fister; CrossFit champion Rich Froning; and, previously, Carli Lloyd, Sam Bradford, and Wes Welker.[19] However, their most important spokesman is New Orleans Saints quarterback Drew Brees.[19] Celebrity endorsers are said to be central to "the Bulletproof Shield," a key sales and recruitment technique used by the company: distributors place themselves at the center of a chart illustrating the company's endorsements and members of its scientific and medical advisory board, and deflects questions about the company by replying, "Well, I don't know about (X), but what I do know is" that particular athletes or doctors have endorsed AdvoCare.[19]

From 2009 until 2013, AdvoCare was the title sponsor of the Independence Bowl in Shreveport, Louisiana. The 2013 game was known as the AdvoCare V100 Bowl.[20][21][22] In 2012, AdvoCare partnered with the Major League Soccer team FC Dallas and became its jersey sponsor.[23]

In 2014, AdvoCare secured the naming rights of a professional sports practice facility located at The Greenbrier in West Virginia.[24] The facility was named the AdvoCare Sports Performance Center and hosted the 2014 training camp for the New Orleans Saints.[25][26][27] AdvoCare also became the title sponsor of the 2014 Texas Bowl.[28] In 2016, AdvoCare will be sponsoring the Texas Kickoff and Cowboys Classic games.[29][30]

Controversy

In July 2008, Olympic swimmer Jessica Hardy tested positive for the banned breathing enhancer, clenbuterol. Hardy said she had never heard of the substance, attributing the positive result to either a tainted supplement or sabotage.[31][32] At the time, Hardy had been taking the supplement Arginine Extreme, which she had received for free from AdvoCare in exchange for making product testimonials,[33][34] and she claimed in a subsequent lawsuit that the company's product was tainted.[35] AdvoCare sued Hardy for making false claims.[36] An arbitration hearing reduced Hardy's suspension after a scientific expert testified that the AdvoCare product was tainted. AdvoCare disputed the panel's findings, saying that two independent laboratories had not found any evidence of Clenbuterol in the supplements.[37]

In 2009, a Dallas County jury awarded $1.9 million in damages against AdvoCare after finding that the company had engaged in deceptive trade practices and unfairly canceled agreements with two of its distributors.[38] According to the lawsuit, litigants Bruce and Teresa Badgett of Arlington, Texas, had been active and profitable marketers of AdvoCare products for more than a dozen years before their distributorship was canceled by the company in 2006 "based upon vague and trumped-up charges." The jury found that AdvoCare engaged in false, misleading or deceptive practices that damaged the Badgetts and that the termination provisions of the distributor contract with AdvoCare were unconscionable, according to court documents. AdvoCare disputed the ruling[38] and on April 30, 2010, filed to appeal the decision on the basis that the plaintiffs were not customers and therefore did not fit the statutory definition necessary to be covered under the Texas Deceptive Trade Practices Act.[39] The appeal was dismissed on March 13, 2012 and the company was ordered to reimburse the Badgett's for court costs related to their defense in the appeal case.[40]

AdvoCare ceased offering KickStart Spark, targeted to youth age 4-11, after pediatricians had expressed concerns about the product containing 60 mg of caffeine.[41] AdvoCare was also the subject of criticism for its marketing at youth athletic events. In 2005, the company paid $5,000 to sponsor a high school wrestling tournament in Sacramento but after negative publicity, AdvoCare officials said they would not sponsor any more school events.[41]

Wendy Miller of the Beaumont Weight Control Center said AdvoCare's Herbal Cleanse is probably safe for many users, but she suggested that the same results could be achieved without the products.[42]

Advocare has recently been the subject of a critical exposée in ESPN The Magazine. The exposée argues that the company and a small number of distributors at the top of a distribution network makes most of its money from the signing-up of new distributors rather than sales of the product, while exaggerating the likelihood of financial success of distributors when only a few make a significant amount of money; that the company creates a cult-like atmosphere of not questioning the company's claims or the probability of financial success in new distributors, to the point where distributors will shun friends and family members who do so; and that the company is internally riven by divisions over the company's strong use of religious affiliation as part of its business model, with more devout members of the organization using it to gain and hold power in the organization and over its members.[19]

See also

References

  1. ↑ Barbara Seale (1 Sep 2013). "AdvoCare a two decade marathon". Direct Selling News. Retrieved 13 Nov 2013.
  2. ↑ / AdvoCare Profile
  3. 1 2 Advocare International v. Karen Ford, et. al PDF (11.0 MB) (page 23)
  4. ↑ Sandra Zaragoza (16 Nov 2003). "Business model is formula for success". Dallas Business Journal. Retrieved 18 Oct 2013.
  5. 1 2 "Three CEOs Reinvent Themselves With Second Careers". D Magazine. August 2010. Retrieved 2011-01-31.
  6. ↑ Candace Carlisle (19 Oct 2012). "Richard Wright and his wife don’t just run AdvoCare International, they’re customers". Dallas Business Journal. Retrieved 18 Oct 2013.
  7. ↑ "Arrowheadlines: Kansas City Chiefs News 2/23". SB Nation Arrowhead Pride. 23 February 2014.
  8. ↑ "K.C. Has Bob McAdams And Send 3 Rookies Off". Lawrence Journal-World (Associated Press). August 28, 1965. Retrieved July 7, 2015.
  9. ↑ Obituary Central Archive
  10. ↑ Gary Abbot (4 June 2001). "AdvoCare Founder Charles Ragus, 58, passed away on Friday June 1". the Mat. Retrieved 18 Oct 2013.
  11. ↑ Candace Carlisle (19 Oct 2012). "AdvoCare CEO shares his secrets to health, business success". Dallas Business Journal. Retrieved 18 Oct 2013.
  12. ↑ "Products". AdvoCare. Retrieved 1 Nov 2013.
  13. ↑ "Multi-level Marketing Or Pyramid Scheme? That’s The Question". Valley News. Retrieved 5 November 2014.
  14. ↑ Greene, Jody. "Is MLM a Bad Word?". Forbes. Retrieved 5 November 2014.
  15. ↑ Brooks, Douglas M. "The Pyramid Scheme Industry: Examining Some Legal and Economic Aspects of Multi-Level Marketing" (PDF). Retrieved 5 November 2014.
  16. ↑ "2013 Income Disclosure Statement" (pdf). Retrieved 15 August 2014.
  17. ↑ "Member Companies Emphasize Ethics in Corporate Behavior". dsa.org. Retrieved 9 December 2015.
  18. ↑ "2011–2012 DSA Officers, Board Members, Elected During DSA’s Annual Meeting". Archived from the original on February 9, 2012. Retrieved 27 June 2012.
  19. 1 2 3 4 Kimes, Mina (15 March 2016). "Drew Brees Has A Dream He’d Like To Sell You". ESPN The Magazine. Retrieved 3 April 2016.
  20. ↑ Roy Lang (28 Jan 2010). "AdvoCare Recommits to I-Bowl". Shreveport Times. Retrieved 5 Nov 2013.
  21. ↑ Goins, Adria (21 August 2013). "Longtime bowl expected to lose Advocare sponsorship". KSLA 12. Retrieved 6 November 2013.
  22. ↑ Dee, Chris (21 August 2013). "Advocare No Longer Title Sponsor For Annual Bowl Game". 1130am (Radio). Retrieved 6 November 2013.
  23. ↑ Botta, Christopher (27 June 2012). "FC Dallas Signs Multiyear Deal With AdvoCare To Serve As Jersey Sponsor". Sports Business Daily. Retrieved 25 September 2014.
  24. ↑ "AdvoCare secures naming rights for New Orleans pro football training facility". Plano Star Courier. 4 August 2014. Retrieved 25 September 2014.
  25. ↑ McFarling, Aaron (25 July 2014). "New Orleans Saints open camp in West Virginia". The Roanoke Times. Retrieved 25 September 2014.
  26. ↑ Johnson, Shauna (23 July 2014). "Saints receive big welcome in Greenbrier County". MetroNews. Retrieved 25 September 2014.
  27. ↑ Vingle, Mitch (21 July 2014). "Greenbrier unveils Saints facility". The Charleston Gazette. Retrieved 25 September 2014.
  28. ↑ Barron, David (11 February 2014). "Texas Bowl gets a new sponsor in AdvoCare International". Houston Chronicle. Retrieved 4 April 2014.
  29. ↑ Berman, Mark (28 July 2014). "University of Houston expected to open 2016 college football season against Oklahoma". My Fox Houston. Retrieved 25 September 2014.
  30. ↑ Helman, David (16 July 2014). "Alabama, USC To Open 2016 Season At AT&T Stadium". Dallas Cowboys official site. Retrieved 25 September 2014.
  31. ↑ "Olympic swimmer Jessica Hardy: 'I'm innocent'". USA Today. 2008-07-26. Retrieved 2010-11-14.
  32. ↑ "Hardy presses forward with tainted-supplement defense". Seattle Times. 2008-08-04. Archived from the original on October 12, 2008. Retrieved 2010-11-14.
  33. ↑ Aschwanden, Christie (July 26, 2012). "Athletes, Stop Taking Supplements". Slate Magazine.
  34. ↑ Futterman, Matthew. "Trials and Tribulations of the Angry Swimmer". The Wall Street Journal. Retrieved 5 Nov 2014.
  35. ↑ "Swimmer Hardy blames company for failed drug test". USA Today. 2009-01-30. Retrieved 2010-11-14.
  36. ↑ "U.S. swimmer, supplement firm countersue". UPI. 2009-02-16. Retrieved 2010-11-14.
  37. ↑ "Supplement maker AdvoCare disputes Hardy panel findings". Seattle Times. 2009-05-05. Retrieved 2010-11-14.
  38. 1 2 Tsai, Joyce (31 Aug 2009). "Jury returns verdict against AdvoCare". Dallas Business Journal. Retrieved 6 Nov 2014.
  39. ↑ "Advocare International, L.P. (Appellant) V. Bruce Badgett and Teresa Badgett (Appellees): Case No.05-10-00917-CV" (PDF). Court of Appeals for the Fifth District of Texas. Retrieved 6 Nov 2014.
  40. ↑ "AdvoCare International, L.P., v. Badgett, Bruce and Teresa Badgett". Justia.com. March 13, 2012. Retrieved 6 Nov 2014.
  41. 1 2 "A Sports Drink for Children Is Jangling Some Nerves". New York Times. 2005-09-25. Retrieved 2010-11-14.
  42. ↑ Taking the 24-Day Challenge. ABC / WXYZ. 19 May 2011.

External links

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