What is the theoretical frame work behind the multi-level marketing businesses?

There is the false theory presented, and the actual theory.

It is falsely portrayed as an opportunity for many people to grow rich with little or no effort. You are "only" offering a great opportunity to your family and friends, who themselves are offering the great opportunity to family and friends, etc, etc, and everyone gets rich off of the commissions.

In actuality, as everyone is trying to recruit sales staff, and no is actually doing much selling, there is no commission to divide up in the first place. And in the second place, all your friends and family probably share much the same friends and family in common with you. Not like your fifty friends and family are in one town, and each of their's are in other towns. You run out of suckers pretty quick.

So the actual theory behind multi-level marketing is that people are greedy, lazy and foolish, and that you can rope them in for a fast buck. By the time they've found out that it doesn't work, they've already paid you the money for the starter kit or training class or whatnot. The initial players get some money, and the vast majority of suckers get nothing.