| Comment Number: | 522418-00787 |
| Received: | 6/4/2006 10:49:39 PM |
| Organization: | Better Health Enterprises |
| Commenter: | Bernice Caruth |
| State: | MN |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
June 4, 2006 Re: Business Opportunity Rule, R511993 I am writing to state my opposition to the proposed Business Opportunity Rule R511993. The proposed rule would make it difficult for me to efficiently operate my business as a Shaklee Independent Distributor. The proposed rule for a seven-day waiting period to enroll new distributors is cumbersome and burdensome. Most people sign a membership application so that they can purchase Shaklee products at a wholesale price. If they decide to pursue the business later, all they have to do is supply Shaklee Corporation with their social security number or Tax ID number. There is no additional kit, fee or application required. The Shaklee Member Kit costs only $19.95. This is far less than many, if not most, consumer purchases, from TVs to all manner of household appliances, none of which require a seven-day waiting period. In addition, the waiting period is unnecessary in that Shaklee Corporation already has a buyback policy for products, including the Member Kit, purchased by a distributor within the last two years. The proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. With identity theft being a concern to most people, I would not want to give out personal information of other Shaklee distributors, without their knowledge or consent, to strangers. Nor would I want someone else giving out my personal information. 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 discourage new people from signing up as distributors in legitimate businesses such as Shaklee. People today are very reluctant to share their personal information with individuals, whether they have met them or not. The ten reference requirement also is an administrative burden. To get the list of 10 prior purchasers, I will need to provide Shaklee Corporation with the prospective 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 seven calendar days before any potential recruit can sign an application. Because 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 requiresl may make the goal unattainable. This would essentially help to ruin small Shaklee businesses with unnecessary bureaucracy. The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation, or unfair or deceptive practices over a ten-year period. It does not matter if the company was found innocent or not liable. It does not make sense to me that I would have to disclose these lawsuits unless Shaklee Corporation, or its officers, directors or sales department employees, had been found guilty or liable. Otherwise, fifty-year old companies such as Shaklee Corporation and their distributors 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. I have been a Shaklee Distributor since 1990. Originally I became a Shaklee Distributor because I wanted to receive a greater discount on the products that have helped me with my health and then at a later date I decided to share the products and business opportunity with others. I believe this proposed new rule has many unintended consequences for direct sellers and that there are less burdensome alternatives available to the agency to achieve its goals. Please reconsider your proposed rules. Thank you.