Comment Number: 522418-01014
Received: 6/5/2006 9:54:55 PM
Organization:
Commenter: Virginia Brien
State: NC
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

I strongly oppose proposed Business Opportunity Rule R511993. I understand that the Federal Trade Commission must protect the public from "unfair and deceptive acts or practices," but the rule as proposed would make it very difficult for me to operate my business as a Shaklee Independent Distributor. A confusing and burdensome section of the proposed rule is the seven-day waiting period to enroll new distributors. Most of my Shaklee customers take out memberships to buy products at a discount, the way people buy a membership at a Sam’s Club. It is absurd to expect them to go through a waiting period simply to be able to order products. If my customers later wish to build a business, all they must do is supply Shaklee Corporation with their Social Security Number or Tax Identification Number. No additional kit, fee or application is required. The Shaklee Member Kit costs only $19.95. This is far less than most consumer purchases, from TVs to all manner of household appliances, none of which require a waiting period. The waiting period is also unnecessary in that Shaklee Corporation already has a 90% 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. This is a terrible idea in this day of identity theft. Not only would this violate the privacy of Shaklee distributors, it would be likely to dissuade potential distributors from joining my business due to their privacy concerns. The 10 reference requirement is also an administrative burden. To obtain the list of 10 prior purchasers, I will need to provide Shaklee Corporation with the prospective distributor's address, and 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 anyone can sign an application. Many people enter direct selling to earn extra income for a specific goal, such as holiday purchases or a family vacation. The wait which the proposed rule creates may make the goal unattainable. I also object to the proposal calling for the release of any information regarding lawsuits that allege misrepresentation, or unfair or deceptive practices over a 10-year period. What is pertinent is whether a company is found guilty of such offenses. Fifty-year old companies such as Shaklee would be at a disadvantage compared to start-up companies, which may not yet have experienced litigation but are far more likely to have legal issues surrounding their opportunities. I have been a Shaklee Distributor for more than 15 years. Originally, I became a Shaklee Distributor because I love the company’s products and wanted to earn some additional income working from home. Now my family depends upon this extra income to supplement our budget. Thank you for considering my comments. Sincerely,