From Amway to Uber: A genealogy of sponsored entrepreneurship

A brief history of MLMs

The multilevel marketing or “direct selling” industry first boomed during the Great Depression, with sales doubling over the course of the 1930s (Baker, 2025: 72). During that decade, the National Association of Direct Selling Companies (NADSC), the organization that would later become the Direct Sellers Association (DSA), successfully petitioned the Federal Trade Commission to exempt direct sellers from New Deal Legislation. In 1935, members of the NADSC met with the Roosevelt administration in Washington, to argue that their business model could not survive if they were forced to comply with new rules like payroll taxes (Biggart, 1989: 40). NADSC proposed that, instead, the administration revive a category from nineteenth-century tort law, the “independent contractor,” to define the relationship that parent organizations had with their sellers (Burch, 2016: 745). Over the course of the twentieth century, the independent contractor classification would become a key alternative to the employee classification (Bidwell et al., 2013; Cappelli and Keller, 2013), and it remains the category used to classify platform workers. This classification has been at the center of legal contests over platforms and in multiple U.S. states as well as abroad because when workers are placed in this category, they are not eligible for welfare benefits such as workers’ compensation and unemployment insurance (De Stefano, 2016; De Stefano and Taes, 2023; Dubal, 2021; Kuhn and Maleki, 2017).

MLMs continued to grow during periods of social and economic instability and to evade government regulation. A second phase of their history began with the economic downturn of the 1970s. In 1973, shortly before the Arab nations in OPEC announced the embargo that would send oil prices skyrocketing, investigations by the Securities and Exchange Commission (SEC) and Federal Trade Commission (FTC) found Holiday Magic, a beauty product MLM, guilty of deceptive marketing and distribution practices; the company quickly folded (Federal Trade Commission, 1974, 1975). However, just a few years later, the FTC brought a similar case against Amway, the world's largest MLM, and lost. ³ Taken together, these legal victories helped legitimate MLMs and sponsored entrepreneurship more broadly. Since this ruling, the federal government has not seriously investigated them. On the contrary, multiple presidents (Ronald Reagan, Bill Clinton, and Donald Trump) and other top-ranking federal officials (including Madeleine Albright) have promoted and worked with MLMs.

During the COVID pandemic and lockdowns, economic instability brought another period of rapid growth for MLMs. The Direct Selling Association, the major trade association for MLMs, claims that from 2019 to 2020 it saw a 13% surge in recruits and that, in 2020, its member organizations posted the highest revenues on record; these numbers increased after members of the “Amway caucus” successfully lobbied Trump to include independent business owners in the COVID stimulus package for (Read, 2025: 245–6). In recent years, class-action lawsuits against an array of MLMs—including Young Living (essential oils), AdvoCare (energy drinks), and Arbonne (wellness/skin care)—have been either dismissed or settled out of court.

Throughout this history, MLMs have appealed to individuals who have difficulty accessing other opportunities to earn income as a result of discrimination and/or specific political and legal decisions (e.g., regarding parental leave and immigration). From the early twentieth century, MLMs in the United States offered products that were on the periphery of consumer markets, but central to women's lives, such as cleaning supplies (Amway, Bestline), kitchen goods (Tupperware, Cutco), and health, beauty, and wellness (Arbonne, Mary Kay) (Burch, 2016). The first Black millionaire, Madame CJ Walker, built an empire selling Black women's hair care products door to door (Ball, 2021). During the early-mid twentieth century, selling products in one's neighborhood or through women-only parties was an acceptable way for white women to earn income while fulfilling household and marital responsibilities (Manko, 2021). For Black women subjected to segregation and often exploited in jobs as domestic servants, direct selling provided occasions for sociability and self-care as well as an alternative income source (Peiss, 2012: 89–90).

In the early 1960s, Betty Friedan (2013 (1963)) dubbed the boredom and depression of white suburban housewives “the problem with no name.” As male wages stagnated and inflation rose in the 1970s, fewer married women could afford to stay home even if they wanted to. Today, women make up 75% of MLM distributors, and almost half of all first-time MLM-ers are between the ages of 18 and 25 (DeLiema et al., 2018). Indeed, the second-listed author joined her first (and only) MLM, selling scrapbooking supplies, at age 20. A large percentage of MLM distributors are Latinx; as of 2013, over 60% of U.S. distributors of Herbalife belonged to this demographic (Read, 2025: 216). MLMs remain a major part of the U.S. economy, operating in all fifty states with more than twenty million sellers generating more than $40B in sales per year (Franco, 2024). From the 1990s, many U.S.-headquartered MLMs also expanded rapidly abroad, particularly in post-socialist and developing nations. With an annual growth rate of 6.5% and over 125 million distributors, the global direct selling or MLM market is valued at $201B; China and Latin America are the two largest and fastest-growing markets (Grand View Research, 2025; Zion Market Research, 2023).

A brief history of the franchise

Franchises followed a distinct but related trajectory when compared to MLMs. The term “franchise” took on its contemporary sense in the late 1950s (Dicke, 1992). The scholarly literature recognizes several types of franchise arrangements. “Product franchising” is the oldest; McCormick and Singer authorized independent dealers to sell their reapers and sewing machines in the nineteenth century, providing the product and brand standards but not a full business-format system. “Business process franchises” provide franchisees with operating manuals that they are required to follow. In a “brand name” franchise, the franchisor mainly provides marketing. In each case, franchise units are something less than fully independent companies since they must adhere to franchise-wide policies regarding how to advertise, operating procedures, and pricing of services, and where they are allowed to operate (McDowell, 2023). Familiar franchises like McDonald's feature standardized layouts, identical advertising, and similar food options with a few regional adaptations (Watson et al., 2006). Internally, they follow comparable operating procedures, such as using approved vendors, standard marketing, shared operating and human resource protocols, and structured real estate deals based on centralized requirements. Franchise owners are required to share internal information, such as data about inventory, sales, and customer traffic, with their corporate parents. In a franchisee agreement, McDonald's states, “We have independent access to your sales and other restaurant-level information, which is stored on our server, and there are no contractual limits on our right to access such information” (Ackermann, 2014: 25).

Organizational and management scholars have described franchising as a strategy for large corporations to raise capital required to scale and to innovate in an increasingly complex consumer economy (Bradach, 1997; Combs et al., 2004; Weil, 2014). But we emphasize different points. Like MLMs, franchises have flourished in times and places where disadvantaged individuals are seeking pathways to economic inclusion; in such contexts, these organizations have pushed for and benefited from deregulation. ⁴ In the 1960s and 1970s, Black and Latinx populations grew in the “inner cities,” where “white flight” and deindustrialization had left few jobs and insufficient fiscal revenue to maintain public services; the “tax revolt” by predominantly white homeowners from the late 1970s onward worsened the situation (Cooper, 2024: 212–13). The historian Marcia Chatelain has documented how, in this context, McDonald's styled itself as a “socially progressive supporter of Black capitalism,” taking advantage of falling property values to acquire land cheaply and partnering with pragmatic Black leaders who saw franchising as a vehicle for building Black-owned businesses (Chatelain, 2020: 115). McDonald's would later present itself in similar terms to policymakers in Asia (Watson, 2007).

In the United States, a rapidly changing legal environment also accelerated the growth of the franchising industry. In the first half of the century, antitrust laws had prevented large corporations from dominating small firms through vertical restraints, or contractual mandates that set mandatory prices or core operating hours (Callaci, 2021b, 2026). As the law and economics movement took shape in the 1960s, and Chicago school legal theorists began to redefine the purpose of antitrust regulation in terms of consumer welfare, they found ready partners in the franchising industry (Wu, 2018). The International Franchising Association (IFA), the largest industry organization, lobbied U.S. regulators to recognize that only franchises could protect the cultural ideal of the small businessman in a modern industrial economy (Callaci, 2021a). Franchises thus played an important role in defining the alliance of Big Business with conservative populism, as well as setting the legal precedents that made platforms possible, despite their monopolistic tendencies (Khan, 2017; Wu, 2018).

Today, franchising is an important part of the U.S. and global economy. With nearly half a million establishments across the United States, franchising contributes $9.9 trillion of sales (Zamora-Appel and Jubran, 2021) and 8.5 million jobs (Niu, 2022). As MLMs lobbied for the creation of the “independent contractor” category that has been so central to the platform economy, franchises anticipated other key elements of sponsored entrepreneurship that are part of platforms today. Like Uber, franchises such as McDonald’s enable individuals to lease some of the reputation and trust associated with an established brand in return for a percentage of their earnings. And, like platforms, franchises also employ extensive data collection and deploy sophisticated technical surveillance and automated management systems (Callaci, 2021a).

The pitch of MLMs and franchises to individuals

At a micro level, MLMs and franchises promise to minimize the uncertainty of entrepreneurship by providing individuals with resources that will tell them what to do and how to do it. Both MLMs and franchises promise that the parent organization and other entrepreneurs will support recruits (Biggart, 1989; Pratt, 2000). A common rejoinder, which McDonald's uses in its brochure for potential franchisees, is that franchising is a way to “be in business for yourself, but not by yourself” (McDonald's, n.d.). Similarly, Dunkin’ Donuts reassures its audience that, “Our support is baked right into every step of your journey” (Dunkin’, n.d.). In his 1993 autobiography, Amway founder Richard DeVos described direct selling as a form of “compassionate capitalism” led by “people helping people help themselves” (Mondom, 2018). In Emily Paulson's (2023) memoir of her experiences with the beauty MLM Rodnan + Fields, she describes her community of sellers as her social support system and “some of [her] closest friends.”

Another resource that MLMs and franchises provide is the intellectual property protected under their trademark. For instance, both Popeyes and Herbalife offer exclusive access to in-demand products and services, like the Chicken Sandwich or a Nutrisystem shake. Many MLMs and franchises promise that prospective distributors and franchisees can avoid the uncertainty and risks of holding inventory: they can order supplies “just in time” from the company's website, and distributors can pitch items from catalogs and have them shipped directly to customers.

In addition to supplying products, MLMs and franchises offer ongoing training opportunities, including one-on-one coaching, accountability groups, and multiday workshops. Distributors at MLMs such as Amway and Rodnan + Fields pay to attend trainings where they learn how to deliver sales pitches to potential “downlines” (new recruits who will owe them a commission), manage their “upline,” the recruiters to whom they themselves owe commissions) and receive exclusive access to new products (Paulson, 2023). Similarly, McDonald's franchise owners can attend Hamburger University to learn the latest in food and safety guidelines, new products, and management techniques.

The pitch of platforms to individuals

Like MLMs and franchises, platforms pitch an inclusive vision of entrepreneurship. In theory, platforms enable any individual to become an entrepreneur at little or no risk by mobilizing assets that they already have, like a smartphone or a car. Here, the most important asset that platforms offer access to is not a trademarked product, even if a Lyft moustache on a windshield may be important for branding. Rather, the platform's key asset is its technical infrastructure and the multi-sided marketplace that this creates by matching workers and customers and managing their interactions. In addition, the platform provides instructions through training videos, tutorials, and easy-to-decipher ranking systems that let workers know where they stand and how to improve.

Like franchises and MLMs, platforms pitch that workers can be their own bosses, with control over their time, tasks, and earnings. In this way, platforms suggest that platform work is compatible with workers’ existing identities, responsibilities, and personal goals (Cameron et al., 2025b; Eberhart et al., 2022; Griesbach, 2025; Ørmen et al., 2025; c.f., Endrissat et al., 2015; Fleming and Spicer, 2014). Marketing materials emphasize workers’ scheduling autonomy—for example, “Making Money On your Own Time (U.S.)” and “Live Life at Your Own Pace (France).” Platforms call individuals entrepreneurs, service providers, partners, or “Uberpreneurs” (Pangrazio et al., 2023; Ravenelle, 2019). For those with a history of financial instability, being able to earn precisely when needed to meet a desired amount (e.g., to pay a high water bill) can compensate for a lack of emergency funds providing economic security (Cameron and Meuris, 2022). Schedule flexibility enables those with health issues or child or eldercare responsibilities to work around these commitments. And for those with a strong desire for professional growth, platforms pitch the possibility of learning a new skill or pursuing a passion project (Caza et al., 2018; Jachimowicz and Weisman, 2022).

These pitches can be especially enticing to workers in emerging economies who face limited opportunities for steady employment at decent wages (Randolph and Galperin, 2019). In such economies, many individuals may view the status of working for a global tech company as a step-up from its local counterpart (e.g., driving for Uber versus a taxi; Birced and Cameron, 2025). In sum, for many individuals from marginalized backgrounds, platform work offers the possibility of increased schedule control, independence, and earning power.

The catch of MLMs and franchises for individuals

While both franchises and MLMs lower barriers to entering relatively autonomous work, they also employ a variety of control mechanisms to align participants with the goals of the parent organization. One of the main ways MLMs impose control is through their organizational structure. If one is not the owner or the direct recruit of the owner, they will have an upline and a downline. These “families” (of uplines and downlines) can exert intense social pressure on distributors to remain engaged, encouraging them to attend multiday training workshops, purchase products for themselves and future customers, post on social media about their “successes,” and recruit new members (Pratt and Barnett, 1997; Pratt, 2000). Families are incentivized to do so because a majority of sellers’ income comes from commissions on their downlines’ sales and start-up fees, not from selling products.

At the core of the franchisor-franchisee relationship is the franchisee agreement and the financial disclosure agreement (FDD), required by the Federal Trade Commission (FTC). Because franchisors write these contracts, the terms tend to be slanted heavily in their favor. Contracts typically impose a number of vertical restraints, including mandates on product sourcing and pricing, fee schedules, required training, inventory control, and even operating hours. The parent franchise may require a personal guarantee, giving them the ability to access the franchise owner's personal assets in the event of litigation or bankruptcy. Moreover, contracts commonly mandate arbitration and give the franchisor the right to terminate the contract without cause (Callaci, 2026). Franchise owners, particularly those new to business ownership, often struggle to understand such agreements and thus unknowingly agree to terms that place them at a disadvantage; some forego counsel altogether (Birkeland, 2010: 28). Many franchises offer loans to prospective franchisees, which place them further under the power of the franchisor; moreover, the structure of these loans makes them particularly sensitive to interest rate fluctuations (Weil, 2014: 125).

In addition to contractual agreements, franchisors impose control through a variety of oversight and surveillance mechanisms. Since the 1990s, many franchisors have required franchise owners to adopt proprietary point-of-sale (POS) systems, which enable franchisors to continuously monitor sales and operations with extensive real-time data (Callaci, 2021b: 10–12). Taken together, these restraints push franchise owners toward a role that more closely resembles that of an employee than a business owner (Emerson, 2021: 178–9). The use of restrictive contracts and extensive, real-time monitoring anticipates management practices of digital labor platforms.

In addition to imposing control, both MLMs and franchises create opacity that serves their interests over the interests of distributors and franchisees . A great deal of opacity surrounds the question of how much MLM distributors earn. Most MLM organizations are privately held and, thus, not required to open their books. Those that do disclose their distributors’ income often do so in misleading ways. For instance, they may report distributors’ gross revenue, rather than profits, and omit distributors who did not earn a check, despite the fact that in many distributors—75% or more—do not (Federal Trade Commission, 2024). For example, according to Rodan + Fields’ 2019 income disclosure statement, two-thirds of the company's distributors earned around $300 annually, and only 1% earned more than $25,000 gross (Rodan + Fields, 2019). While alarming, these numbers are unexceptional. Some estimate that up to 98–99% of distributors do not earn any income and that many go into debt purchasing products for demos and potential customers (Taylor, 2011).

Organizations like Amway and McDonald’s tell distributors that pay reflects effort: they will be able to succeed if they work hard enough. But, in fact, earning ability is based less on skills and effort than on when and where someone signs up. There is a first-mover advantage in MLMs: those who come first in a given market region can build their downlines and receive larger commissions before market saturation. ⁵ There are similar dynamics in franchising, where early market entrants enjoy committed customers and market dominance. Distributors and franchisees may not be required to purchase supplies, but many are encouraged to do so to have products available for customers. Many MLM distributors end up buying products for inventory right before the end of an accounting period to qualify for the next level and receive a higher commission. ⁶ For the parent organization, it does not matter if the product is sold to a distributor or a final end consumer; it profits from both purchases.

The catch of platforms for individuals

Like franchises and MLMs before them, platforms use a variety of contractual and technical mechanisms to restrict workers’ autonomy. Indeed, the use of restrictive contracts and extensive, real-time monitoring by franchisors and the social controls of MLMs anticipates the tight management practices of digital labor platforms. Platforms also introduce forms of opacity and obscurity that make it difficult for workers to evaluate the opportunities that they provide and the costs and risks that these entail.

A growing body of research documents how algorithmic management systems impose control on individuals classified as independent contractors. Algorithms dictate the parameters of work, by hiring, firing, evaluating, setting wages, and disciplining workers (Cameron, 2022, 2024; Kellogg et al., 2020; Lee et al., 2015). Algorithmic management systems monitor everything from truckers’ eye movements to drivers’ acceleration speeds to how long it takes a shopper to select ripe avocados (Cameron et al., 2022; Griesbach et al., 2019; Levy, 2023; Viscelli, 2016). Platforms such as Instacart and Uber rely on algorithmically-mediated gamification techniques to make work tasks more enjoyable (e.g., earning points for prizes, pleasant-sounding chimes when workers meet a milestone) with the purpose of increasing workers’ engagement time on the app (Cameron et al., 2022; Manriquez, 2019; Vasudevan and Chan, 2022).

While workers can, in theory, offer their services across a variety of different platforms, in practice, platform design features limit their mobility. Many platform companies discourage working for more than one platform, or “multi-homing,” because much of their revenue is generated by high-volume workers who comply with algorithmic nudges (Cameron, 2024; Rosenblat, 2018). Loyalty programs such as Uber Pro and Shipt's Summit Seeker offer an array of incentives (e.g., gas discounts, priority matching) to encourage workers to stick with one platform (Cameron, 2024; Ravenelle, 2019). In lieu of traditional employer evaluations, customers evaluate, and algorithms rank workers’ performance, with their rating being a marker of workers’ skill and reputation. These reputation metrics are important. However, they are not portable across platforms. A self-taught programmer with a 4.98 ranking with thousands of positive reviews on Fiverr cannot expect to receive the same number of clients at the same rate as a newbie on Upwork or Kolabtree (Rahman, 2024). Similarly, a seller on Amazon or eBay with excellent ratings and feedback from their customer could not use these reputation markers to promote their business on Shopify or TikTok Shops (Weigel, 2023).

In addition to imposing managerial control, platforms introduce novel forms of obfuscation. Opaque algorithmic management systems determine what work tasks are presented to workers and at what price. On open-labor platforms, such as Fiverr and Upwork, algorithms rank and recommend workers to potential customers (Cameron and Rahman, 2022; Rahman, 2021, 2024; Wood et al., 2019). ⁷ On closed-labor platforms, such as Uber and Deliveroo, algorithms match workers to tasks at set prices without worker input (Cameron et al., 2023; Griesbach et al., 2019; Maffie, 2023). Prior interactions with the algorithmic management system influence which opportunities are presented to workers. For example, the speed and rate at which a worker has accepted past matches can influence their new matches and their pay in unexplained ways (Cameron, 2022; Rahman, 2024; Rosenblat, 2018). A platform can “shadow-ban” workers, such that their profiles are not presented to customers, without providing notice to them (Savolainen, 2022). Even if workers do notice such penalties, platform organizations provide few mechanisms for individuals to address grievances (Cameron et al., 2025c; Maffie, 2022; Mayberry et al., 2024; Rahman and Valentine, 2021; Wood et al., 2019).

In addition to imposing opaque forms of management, platforms can introduce costs and risks, which workers find difficult to evaluate (Cameron et al., 2021; Griesbach, 2025; Schor et al., 2024). For example, many ride-hailing drivers in the U.S. finance Tesla vehicles at high interest rates (Dubal, 2019). In 2017, the Federal Trade Commission made Uber pay a $20 M fine to compensate for misleading claims, including about financing programs (Dubal, 2019; Federal Trade Commission, 2017). In the Global South, workers frequently go into significant debt to secure the initial equipment that they need to pursue platform work (e.g., cars and smartphones). In West Africa, drivers have often secured vehicles through high-interest “work-and-pay” arrangements in which they must make daily or weekly remittances, often paying more than double the car's purchase price (Cameron and Thomason, 2025; Scheiber, 2017). In brief, like MLMs and franchises, platforms compel individual workers to make compromises that undermine the autonomy and opportunity traditionally associated with entrepreneurship.

The pitch of MLMs and franchises to communities

At a meso level, MLMs and franchises make promises to entire communities that have historically been excluded from formal labor markets (e.g., racial minorities, women, and immigrants). Not only do these organizations recruit members of marginalized groups they also tell new recruits from such groups that they can empower others like them.

In the United States, both franchises and MLMs have long engaged in racialized marketing. Marcia Chatelain (2020) documents how, from the 1960s onward, McDonald's recruited former members of the Civil Rights and Black Power movements, presenting franchising as an opportunity to serve, and build wealth in, Black communities. As a result, many McDonalds locations opened up in neighborhoods that were, or were becoming, predominantly Black. MLMs also have a long history of targeting specific groups such as white middle-class suburban women (Paulson, 2023), Latina women (Pfeiffer and Molina, 2013; Read, 2025: 216), and high school boys (Abadi, 2019; Myers, 2021). There are parallels in hotel franchising. More than 60% of hotel franchises in the U. S. are owned by Indian immigrants and their families, primarily from the state of Gujarat (Dhingra, 2009; McDowell, 1996; Starr, 2016); this finding resonates with broader studies that link national culture to choices about launching firms (Kogut and Singh, 1988).

Both MLMs and franchises encourage prospective distributors and franchise owners to become agents of inclusion for others around them, often by eliciting the participation of individuals with whom they have prior, non-economic relationships. Many MLMs and franchise units are family businesses. The founders of Amway touted that one of the major selling points for distributors was the ability to involve the entire family, including children, while keeping wives at home (Butterfield, 1985). While enrolling communities, MLMs and franchisors also promise to transmit skills—either as a replacement for, or a route to, formal education and credentialing. For instance, Dunkin’ Donuts requires franchisees to designate at least one other manager and pay for them to complete a training program (Franchise Direct, 2024). Marketing materials for prospective Taco Bell franchisees emphasize the availability of “Live Más” scholarships for employees of franchise units and their local community members (Taco Bell, n.d.). This kind of philanthropy dates back to at least the 1960s, when McDonald's began making donations to Black community organizations in Cleveland as a condition for accessing desirable real estate (Chatelain, 2020). This can make franchise owners into conduits of much-needed opportunity for those around them. Overall, franchisor-sponsered training programs and scholarships promise to uplift the franchise owner, while empowering them to uplift their frontline workers, who often hail from the same community of origin.

Similarly, MLM organizations offer an array of paid and free trainings for new recruits, stressing that recruits must build and empower their “downline” by providing “product knowledge” and “sales enablement.” Throughout their promotional and educational materials, MLMs draw on well-established linguistic and narrative patterns that elicit feelings of desire for group membership. Such materials frequently use the trope of the “Big They” to refer to powerful individual and institutional actors whom they accuse of blocking would-be distributors from achieving happiness. Theorists of literature and language have analyzed the ways that such figures motivate groups by indexing their feelings of helplessness and marginalization (Ngai, 2005), while also providing a kind of “cognitive mapping” that enables them to form a picture of the world (Jameson, 1995). The linguist and writer Amanda Montell (2021) describes the hashtags and status updates members of MLM organizations frequently use as examples of “cultish” or “fanatical” language that bonds speakers in an in-group.

The pitch of platforms to communities

Like MLMs and franchises, platforms emphasize that they offer opportunities for demographic groups that often encounter challenges entering the formal labor market. Platforms, like MLMs and franchises before them, have engaged in racialized marketing aimed at these communities. In 2020, for instance, Uber launched a campaign on the anniversary of Martin Luther King's “I Have a Dream” speech, unveiling a billboard in downtown Oakland that read, “If you tolerate racism, delete Uber.” Following the police killing of George Floyd, Uber erected similar billboards in cities across the United States (Dubal, 2021: 512). The campaign targeted prospective drivers, most of whom belong to racial minorities, as well as customers who would feel good about supporting an anti-racist business. In further examples of racialized marketing, many advertisements for ride-hailing and other on-demand services show people of color, beaming, as they provide services to a white customer (Images 1–5).

Like franchises and MLMs, many kinds of platform-mediated work offer the opportunity for the entire family to be involved. Together, families fill multiple shopping carts for Instacart and couples team up to complete Amazon Flex deliveries, with one driving and the other dropping off packages . Similarly, e-commerce businesses often involve multiple family members handling different aspects of the business (e.g., shipping, book-keeping, customer service inquiries, and scouting for new products) (Weigel, 2023; Zhang, 2020). Care platforms, such as UrbanSitter, call on communities to vouch for their members’ trustworthiness, by giving clients the option to choose potential workers based on their presence within the client's social or religious network (Ticona and Mateescu, 2018). In this way, platforms suggest that their economic and psychological benefits redound to the entire community.

Moreover, platforms have often presented themselves as providing opportunities to serve others—to do good while also doing well. For instance, Uber prominently advertised that their market entrance decreased the number of drunk driving deaths (Bucher et al., 2021; Smith, 2021). During the height of the COVID-19 pandemic, many kinds of platform work were labeled as essential and, in some cases, even lauded as “heroic” (Cameron et al., 2022; Hurwitz, 2023). Such valorization can provide a sense of meaning and purpose, especially when the work is lower-paid, risky, low-status, or considered “dirty” (Ashforth and Kreiner, 1999; Wrzesniewski and Dutton, 2001; Yang and DiBenigno, 2025). Recruitment advertisements on the shopping platform Instacart stated “Be a household hero” and “My Instacart shopper found all the cheeses I wanted the first try. Not all heroes wear capes”—encouraging shoppers to see themselves as heroic in that they were helping individuals unable to leave their homes (Cameron et al., 2022). Overall, the ability to include family members and serve one's community attracts new entrants into platform work.

The catch of MLMs and franchises for communities

At the community level, as well as at the individual level, franchises and MLMs involve significant trade-offs. Marketing materials suggest that franchise owners and distributors become agents of empowerment. But evidence shows that they often become agents of exploitation. Recent conflicts over legal liability in the franchising industry in multiple U.S. states have highlighted that, while franchises do bring jobs to communities, these jobs are often underpaid and offer little opportunity for advancement (e.g., Massachusetts Office of the Attorney General, 2025; Patel v. 7-Eleven, Inc., 2024; Salazar v. McDonald's Corp., 2019). The loss of autonomy that individual franchisees accept can affect their communities, too. In 2016, the Attorney General of New York, Eric Schneiderman, brought a lawsuit against the Domino's corporation, claiming that Domino's required franchisees to use payroll software that systematically underpaid workers (Elmore, 2018; Stites & Harbison, PLLC, 2016).

Economists attest that franchises can drive down wages within communities and regions by compelling franchisees to accept vertical restraints that prohibit them from competing with one another for employees (Tracy and Kahn, 2020). For the MLM participant, enrolling community members involves them in an explicitly hierarchical, if not parasitic, relationship: any friends or family enrolled become one's “downline.” As numerous ethnographies, memoirs, and exposés have attested (e.g., Paulson, 2023; Pratt, 2000; Read, 2025), participation in an MLM can incur a considerable toll as members are encouraged to view their social ties as economic ones, and to shun those who choose not to join them.

The catch of platforms for communities

Platforms promise work opportunities, but evidence suggests that they often take advantage of the precarity of members of marginalized social groups (Eder et al., 2024). There is a great deal of evidence that the jobs that platforms make available, like the earnings opportunities that franchises and MLMs make available, are of low quality. In a 2021 study of platform labor conditions, Fairwork (2021) found that most platform organizations received a score of zero or one on a ten-point scale. Through “algorithmic wage discrimination” (Dubal, 2023), pricing algorithms set prices for tasks that the algorithmic management system knows workers will accept, often below the minimum hourly wage, systemically underpaying members of certain demographic groups. At the same time, entire categories of platform-mediated work are classed, racialized, caste-based, and gendered (Abílio, 2023; Cameron et al., 2025a; Gebrial, 2024; Van Doorn and Vijay, 2024). Because platform organizations are decentralized and classify workers as independent contractors, they do not provide career pathways. Individuals often find themselves doing platform work for much longer than they originally planned (Ravenelle, 2020; Schor et al., 2024) or cultivating unrealistic dreams of entering into platform management (Cameron and Thomason, 2025).

To the extent that platforms enable workers to create family businesses, it follows that the family members who head such businesses may become agents of exploitation themselves. Julian Posada (2022) has documented how the data labeling industry in Venezuela enlists whole families and communities in supplying (unwaged) assistance. The case of Jeffrey Fang, a DoorDash worker who fulfilled orders with his two young children in the car and lost them when the car was stolen in San Francisco (Fortin, 2021; Smiley, 2021), provides a stark example of how platforms shift risks onto the most vulnerable segment of society. The thieves were eventually apprehended, and the toddlers returned, but the story highlights the fact that platforms may invisibilize, rather than eliminate, challenges of social reproduction or providing care.

The pitch of MLMs and franchises to states

At a macro level, MLMs and franchises make promises to the state. In the United States, MLMs and franchises have drawn on a long history of celebrating small, family businesses that dates back to Thomas Jefferson and the homesteading movement of the nineteenth century (Foner, 2017). (The name “Amway” is a contraction of “American Way.”) Within the United States, from the time of the Great Depression, direct selling organizations presented themselves to the federal government as alleviating structural unemployment and attendant social ills (Baker, 2025). Both organizational forms pitched themselves to municipalities and states struggling with debt crises that followed the urban deindustrialization and rising unemployment of the 1960s and 1970s (Chatelain, 2020; Wang, 2018). To these macro-level actors, MLMs and franchises promised scalable infrastructure that would organize informal labor markets, new opportunities for citizens to gain skills and earn income, and access to consumer goods that improved living standards (Christensen et al., 2010).

Franchises and MLMs articulated these promises through industry associations that engaged in lobbying. In 1961, the founder of Dunkin’ Donuts, Bill Rosenberg, created the International Franchise Association (IFA), headquartered in Chicago. As franchises expanded globally, the IFA positioned itself as an advocate for the economic and social contributions of the franchise industry, organizing a “Franchise Action Network,” which would come to comprise tens of thousands of franchisors, franchisees, and suppliers. Throughout its materials, IFA presents the franchise industry as a boon for employment and frames itself as a champion of small or local businesses in particular. The advocacy page of their website currently states: “Franchises are local businesses. Spanning industry, representing diverse ownership, from rural towns to urban centers, these businesses hugely impact the American economy… IFA fights to ensure our small businesses are treated equally and not penalized because of preconceived notions about franchises” (International Franchise Association, n.d.).

The counterpart to IFA for MLMs is the Direct Selling Association (DSA), a national trade association established by door-to-door salesmen in the early twentieth century. In the 1970s, a series of actions by the Federal Trade Commission (FTC) to regulate the industry drove MLMs to engage in more organized lobbying via the DSA. Amway, in particular, took on a central role and worked closely with the U.S. Chamber of Commerce; one of its two founders, Jay van Andel, was on the board (Cooper, 2024: 149). Like the IFA, the DSA presented the MLM business model as essential to grassroots economic growth. Amway also used political donations—including a $2.5 million contribution to the Republican National Committee in 1994—to advocate for low regulatory oversight, which Amway said would lead to job creation and broad economic benefits (Stanton, 2017).

The pitch of platforms to the state

At a macro level, platforms pitch promises to states that parallel the promises made by MLMs and franchises. These promises include providing jobs for unemployed or underemployed populations, who can pose a major threat to political legitimacy and stability. This tendency has become especially pronounced when U.S. companies go abroad. Across Latin America, U.S.-headquartered digital labor platforms, such as Upwork, give individuals an opportunity to earn in foreign currencies, which is especially important in states with fluctuating or destabilized currencies (e.g., Venezuela or Argentina [Posada, 2024]). In Nigeria and Ghana, platforms like Uber promised to absorb the un- and underemployed populations with television advertisements showing well-dressed drivers ferrying around suave celebrities (Image 6). In the 2010s, China, too, officially launched a “mass entrepreneurship and mass innovation” (dazhong chuangye, wanzhong chuangxin) campaign encouraging citizens to become platform workers (Lei, 2023; Lindtner, 2020; Zhang, 2023).

In addition to creating new work opportunities, platforms promise to assist states by formalizing informal labor markets. The process can elevate the status of the work that was previously considered unskilled and peripheral. For instance, the jitney driver is now algorithmically matched with riders through Uber, the street courier now does deliveries through Wolt, and a food vendor now delivers via Uber Eats. The workers have reported that these new arrangements give them a greater sense of purpose and belonging and lead customers to treat them with more respect (Birced and Cameron, 2025). In addition to enabling individuals to earn income, platform organizations make it easier for the state to collect taxes, increasing fiscal revenue.

Finally, platforms assist states by compensating for the limitations of existing public and social infrastructure. Across North America, ride-hailing services are being integrated into public transportation systems, and rides can be paid for by government access programs (Wheeler, 2022). In the United States, recipients of Medicaid and other social welfare programs can use Instacart and Uber to purchase groceries and other household items (Jacoby, 2024; Wilson, 2023). And a growing number of large employers, such as universities, provide memberships to platforms such as Care.com as an employee benefit. Overall, platforms claim to better the state's capacity to serve its citizens both directly, by creating income-earning opportunities, and indirectly, by increasing the capacity and quality of public infrastructure.

The catch of franchises and MLMs for states

Franchises and MLMs promise that they will assist states dealing with revenue shortfalls, debt, poverty, and underdevelopment. But, as at the micro and meso levels, here, too, MLMs and franchises bring new costs and risks. Franchises that promise to ameliorate fiscal revenue shortfalls have often ended up exacerbating them. Municipal, state, and national laws have frequently responded to lobbying efforts by franchise organizations and industry associations by providing tax incentives, grants, and streamlined registration processes, particularly in sectors like food service and retail. Moreover, municipalities have implemented zoning laws that favorably position franchises, enabling well-known brands to set up operations in commercially strategic sites (Callaci, 2021b). The rationale is that franchise businesses will provide new sources of employment, opportunity, and tax revenue. But there is extensive research documenting the fact that the jobs that many national franchises create are not high-quality jobs.

There is also evidence that the low quality of jobs offered by major franchises actually incurs new costs for states. For instance, a major 2020 study by the U.S. Government Accountability Office (GAO) found that workers in the fast food and retail sectors, which are dominated by franchises, relied on public assistance programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP) at higher rates than workers in other industries; alongside Walmart, McDonald's had the highest percentage of employees dependent on government aid (US Government Accountability Office (GAO), 2020). In the same vein, a study by labor economists at UC Berkeley had found that over 50% of fast food workers relied on government assistance (Aubrey, 2013; Allegretto et al., 2013).

Critics have offered evidence that MLMs drain tax revenues by encouraging distributors to underreport income or operate informally, and to claim social or familial expenses as business expenses (Butterfield, 1985; Cooper, 2024). In 2023, GAO reported that underreporting of earnings by sole proprietors like MLM distributors was one of the largest sources of the federal tax gap. For state attorneys general and federal agencies that attempt to oversee MLMs, monitoring and investigation also entail considerable costs. In cases where MLMs have been found guilty of engaging in deceptive practices, the settlements that they are required to pay provide some hints about their scale. For example, in concluding their 2021 case against LuLaRoe, the attorney general's office of Washington estimated that $750,000 of the $4.75 million settlement would only “partly reimburse” the expenses associated with the investigation (Washington State Office of the Attorney General, 2021).

The catch of platforms to the state

Similarly, challenges arise when platform organizations take responsibility for key sectors of public infrastructure; the motives of a for-profit company and of a government are often misaligned. In the Toronto suburb of Innisfil, for instance, the city budget exploded after Uber became integrated into the public transportation system and, as prices increased, citizens found it harder to access transport because of the government's reduction in services (Cecco, 2019). In general, substituting a ride-hailing service for a bus transit system can increase congestion and pollution as well as decrease ridership on other forms of public transport. Ridership decline can have unexpected ripple effects, since city transportation budgets are already set based on projected ridership levels, leading to shortfalls that must be made up from city and state coffers (Fitzsimmons and Hu, 2017). See Table 2 for a summary of all the pitch/catches at each level of analysis.