Comment Number: 522418-00495
Received: 6/2/2006 10:19:57 AM
Organization: Independent Shaklee Distributor
Commenter: Stacy Sesler
State: MI
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

I have a strong opposition to the proposed Business Opportunity Rule R511993. The rule as proposed would make it very difficult for me to operate my business. One of the worst sections of the proposed rule is the 7-day waiting period to enroll new distributors. Most people who sign a Shaklee application do so to purchase Shaklee products at a wholesale price. They only want to be consumers of the products at a discount. If they later wish to build a business, all they must do is supply Shaklee with their SSN # or Tax ID #. There is no additional kit, fee or application required. The Shaklee Member Kit is only $19.95. This is far less than TVs, all manner of household appliances, etc., none of which require a 7-day waiting period. In addition, the 7-day waiting period isn’t necessary because Shaklee already has a 90% buyback policy for products. The proposed rule requires the disclosure of at least 10 prior purchasers nearest to the prospective purchaser. In this day of identity theft, I am uncomfortable giving out the personal information of other Shaklee distributors, without their knowledge or consent, to strangers. I understand that those who sign up after the rule takes effect would be told in writing "If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers." I believe that this would dissuade new people from signing up as distributors as they would be concerned about their privacy. Providing the 10 references would also damage my business. Lower ranking distributors often are involved in more than one direct selling company. Providing a list to a potential recruit, who may already be a distributor for a competing direct selling company, may be an invitation to solicit existing distributors for such other opportunity. The 10-reference requirement also is an administrative burden. In order to obtain the list of 10 prior purchasers, I will need to provide Shaklee Corporation with the new distributor's address, and then wait to receive the list of the 10 nearest distributors who became distributors within the past three years. Each prospective recruit will need a customized disclosure statement. This will result in a delay far longer than 7 calendar days before any potential recruit can sign an application. Many people enter direct selling part-time to earn extra income for a specific goal, such as holiday purchases or a family vacation, the long wait which the proposed rule will entail may make the goal unattainable. The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation, or unfair or deceptive practices over a 10-year period. It does not matter if the company was found innocent or not liable. Today, almost all business lawsuits contain claims of misrepresentation or unfair competition. It does not make sense to me that I would have to disclose these lawsuits unless Shaklee Corporation had been found guilty or liable. And, 50-year old companies such as Shaklee Corporation would be placed at a disadvantage compared to start-up direct selling companies, which may not yet have experienced litigation but which are far more likely to have legal issues surrounding their opportunities. Shaklee has been a part of my life for over 25 years. I've used the products since I was 5 and became a Shaklee Distributor because I love helping others and wanted the extra income to be able to stay home with my children. Now we depend upon this extra income for our livelihood. I make much more than my husband who is currently working two part-time jobs. We live in a rural community and there is no other job opportunity here that would meet our income needs much less provide me the ability to stay home with my kids and do as much volunteer work as I do now. I believe this proposed new rule has many unintended consequences and that there are less burdensome ways to achieve the FTC's goals. Stacy Sesler