Grit Advertising had a giant 12 months in 2023, because the direct, door-to-door gross sales firm earned $95 million, donated greater than $900,000 to charity, and moved into a brand new workplace constructing in Lindon — full with an indoor basketball courtroom.
Present salespeople say, in a collection of lawsuits, that Grit Advertising additionally stopped paying a few of its gross sales reps.
Eighteen almost an identical lawsuits have been filed in Salt Lake’s third District Courtroom in mid-February, all by former salespeople who declare the corporate has not paid them the fee it owes. The 18 plaintiffs suing Grit declare it owes them wherever between $10,000 and $250,000 per particular person — a complete of $1.4 million.
The corporate, based in 2020, contracts its door-to-door salespeople to pest management corporations throughout the nation, in line with its web site. Its rise was meteoric: It was incomes tens of thousands and thousands of {dollars} in its first 12 months, and the corporate partnered with the Utah Jazz in 2022.
To pest management corporations, Grit guarantees “rampant income progress,” in line with its web site. To its gross sales reps, it guarantees “a platform to turn into financially literate,” plus the potential to earn “a whole lot of hundreds of {dollars}” and switch their lives round with sufficient grit and hustle, co-founder John Tayler instructed podcast host Jimmy Rex within the firm’s early days.
To the gross sales reps suing Grit, most of them younger, college-aged males, the unpaid commissions are some huge cash, mentioned Justin James, an legal professional representing all 18 plaintiffs.
“I’m simply making an attempt to assist these younger guys,” James mentioned.
Grit executives and an legal professional for the corporate didn’t reply to The Salt Lake Tribune’s requests for remark.
Gross sales and recruits
Grit Advertising is what James and direct promoting consultants name a “mercenary” gross sales drive: the corporate doesn’t promote its personal product. As a substitute, it recruits and trains impartial gross sales reps to promote on behalf of different corporations — particularly pest management corporations. The mannequin can save companies cash, researchers say, as a result of salespeople are paid on fee, not on wage.
Grit Advertising was not included within the Kem G. Gardner Institute’s evaluation of Utah’s direct promoting business; the research, revealed in 2022, used information from 2020, the identical 12 months Grit was based. However the research, and the Federal Commerce Fee, outline direct gross sales as a gross sales technique that depends on the success of impartial gross sales representatives. A multilevel advertising and marketing firm, in line with the FTC, additionally encourages gross sales representatives to recruit new gross sales representatives, and incentivizes every new recruit.
Grit Advertising’s gross sales representatives earn commissions from their gross sales; they will additionally earn “overrides,” or a minimize of gross sales for each new salesperson they recruit, in line with courtroom paperwork.
All 18 plaintiffs have claimed Grit owes them fee cash; 10 of them declare they need to have additionally been paid a minimize of their recruits’ gross sales.
Multi-level advertising and marketing is fashionable amongst girls, and particularly girls in Utah, consultants say. Analysis from Gardner Institute discovered that as of 2020, most massive direct promoting firm gross sales representatives have been girls, drawn to the flexibleness and monetary freedom MLMs can provide. Extra essential students have referred to as the enterprise mannequin ”predatory.” Reps for such manufacturers as doTERRA promote not simply merchandise, however life of wellness, or magnificence, or luxurious.
Grit is MLM’s hyper-masculine counterpart. Its social media posts rejoice prime sellers in darkish, stylized graphics that evoke the web’s early days. Some posts borrow militaristic language and iconography to explain Grit’s workforce: “Deployment might be right here earlier than you recognize it,” says one publish, captioning a flyer about “Grit Trench Schooling Camp.”
The corporate’s web site consists of a web based retailer stuffed with branded attire. All of it’s listed as offered out.
Instagram followers and Google reviewers remark that they’re “proud to be aligned with a corporation all the time striving for greatness” and “eternally modified” by the corporate’s “blessings.”
“A prime 5 blessing in my life to be right here,” one gross sales rep commented. “By no means been surrounded by a greater group.”
“Blessed to be part of one thing greater than me,” one other commented.
A smaller faction of the web is extra skeptical. On Reddit, customers who declare to be former gross sales reps or acquainted with gross sales reps (Reddit is nameless) mentioned the corporate felt like a “pyramid scheme” or a “rip-off.”
“For my part, it’s a disgusting low,” mentioned one Reddit person who claimed to have offered for Grit for every week earlier than quitting. “Erroneously, I had this imaginative and prescient of gross sales being one thing the place you simply discuss a product and, via a complete lot of labor, attempt to discover the occasional one who could be involved in it. As a substitute I discovered a tradition of, that is the right way to exploit the emotions of weak folks to get what you need.”
Grit’s prime sellers promote greater than $1 million of pest management companies per 12 months, in line with firm Instagram posts. Fee construction is predicated on “veteran” standing — the longer you stick round, and the extra you promote, the extra you earn. Some plaintiffs declare they have been eligible for 13% of their gross sales income; others declare they have been eligible for as much as 63%.
In line with every lawsuit, Grit instructed all 18 gross sales reps it might pay them what it owed “on or earlier than January 26.” It nonetheless hasn’t, the plaintiffs allege.
Grit has been served in every case, in line with courtroom information, however has not issued a response.
Shannon Sollitt is a Report for America corps member masking enterprise accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps preserve her writing tales like this one; please think about making a tax-deductible reward of any quantity as we speak by clicking right here.