Let's get to the point: Herbalife's best selling point: the diet club, is probably illegal in most instances, because they are not licensed or permitted to prepare food. In fact, I doubt most even have a license to retail food.
Previously we've discussed Herbalife many times, and some of the stuff is how people who support Herbalife believe that most of its value is from the "diet clubs" that its distributors are running. I've discussed the problems with that particular view, though recently I realized I made a bad assumption. Peterson apparently introduced Herbalife to Mexico back in late 1980's, but nobody started doing "diet clubs" in Mexico until 2003, and it backfilled into the US in 2006. (I had assumed he introduced stuff to Mexico much later.)
However, here's a more interesting question... Are the diet clubs even LEGAL?
Now you're probably going, huh? How can a diet club be illegal?
By being an illegal food preparer and retailer without the proper permits.