Comment Number: 522418-01877
Received: 6/12/2006 5:07:53 PM
Organization: Independent Beauty Consultant, Mary Kay Cosmetics
Commenter: Jane Erickson
State: CA
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

Jane Erickson Independent Mary Kay Beauty Consultant   11June 06 Dear Sir or Madam: I am writing this letter because I am concerned about the proposed Business Opportunity Rule R511993. I believe that in its present form, it would prevent me from continued success in Mary Kay Cosmetics. I understand that part of the FTC’s responsibilities is to protect the public from “unfair and deceptive acts or practices,” however, sections in the proposed rule will make it very difficult, if not impossible, for me to represent the Mary Kay Company the way I have for the last 10 years. As a Mary Kay Cosmetics Consultant for more than 10 years I have come to know the quality and reliability of the products and the integrity of this company. I became a consultant in my company because I saw the products as exceptional and I wanted to earn some additional income. I have for the last 10 years supplemented my income as a single parent and it has enabled me to support my daughter and send her to college. My favorite part of the business is that I plan my work level based on my own needs. I have taken a break for the last year and now plan to become more active in order to provide myself a future retirement that will match my current lifestyle. One of the most confusing and burdensome sections of the proposed rule is the seven-day waiting period to enroll new consultants, our starter kit costs $100 and provides the future consultant with products that can be used in their first parties, or be used by them personally, the value of the kit is approximately $323 retail. Personally this is a small purchase for most people in our current economy. People buy TVs, cars, and other items that cost much more and they do not have to wait seven days. This waiting period gives the impression that there might be something wrong with the company or the compensation plan. Because Mary Kay Cosmetics already has a 90% buyback policy for all products purchased by a salesperson within the last twelve months the seven day waiting period is redundant. And with all new endeavors the initial enthusiasm often correlates with the success. The waiting period would cause the enthusiasm to wane. The proposed rule also calls for the release of any information regarding lawsuits involving misrepresentation, or unfair or deceptive practices. It does not matter if the company was found innocent. Today, anyone or any company can be sued for almost anything. It does not make sense to me that I would have to disclose these lawsuits unless Mary Kay Inc. was found guilty. Otherwise I am put at an unfair advantage even though Mary Kay Inc. is innocent of wrong doing. Finally, the proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. I am glad to provide references, but in this day of identity theft, I am very uncomfortable giving out the personal information of individuals (without their approval) to strangers. Also, giving away this information could damage the business relationship of the references who may be involved in other companies or businesses including those of competitors. In order to get the list of the 10 prior purchasers, I will need to send the address of the prospective purchaser to Mary Kay headquarters and then wait for the list. I also think the following sentence required by the proposed rule will prevent many people from wanting to sign up as a salesperson - “If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers.” People are very concerned about their privacy and identity theft. They will be reluctant to share their personal information independent sales people. Thank you for you time and attention to my comments, Jane Erickson