| Comment Number: | 522418-02163 |
| Received: | 6/14/2006 4:42:58 PM |
| Organization: | Young Living Distributor |
| Commenter: | Nancy Coates |
| State: | Not in the US |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Dear Sir or Madam: I am writing this letter because I am concerned about the proposed Business Opportunity Rule R511993. While I understand the responsibilities of the FTC to protect the public from 砥nfair and deceptive acts or practices,・I believe that this proposed rule could prevent me from continuing as a distributor for Young Living Essential Oils. There are specific things that will make it very difficult for me to sell Young Living's products. Like myself, the vast majority of Young Living distributors promote the purchase of products rather than any business opportunity. I have been a distributor with Young Living for a year. I became involved with this company because I felt the products were exceptional. Through Young Living, I have developed leadership skills and cultivated many meaningful relationships. I enjoy the health benefits of using these products daily and my future is dependent on the stability of the direct selling industry. Re: Seven-Day Waiting Period to enroll new distributors. Young Living's Starter Kits cost only $50.00, and each kit is worth far more than the sale price. When a Starter Kit is purchased, the purchaser becomes a distributor and is granted special discounted pricing on all orders. I also think this seven-day waiting period is unnecessary because Young Living fully refunds this cost if the customer decides to send it back. Requiring a seven-day waiting period before a distributor is allowed to even place an order would be destructive to the businesses of thousands of distributors who are building a business around Young Living's products. It would also be quite burdensome for me to keep such detailed records of when I spoke with every single person about Young Living, plus lots of unnecessary paperwork to report to my company headquarters. Re: Litigation Information The proposed rule also calls for the release of any information regarding lawsuits involving misrepresentation or unfair or deceptive practices, regardless of whether the company was found innocent or not. It does not make sense to me that I would have to disclose these lawsuits and would put Young Living at an unfair disadvantage even though the company has done nothing wrong. To release this information would be misleading to prospective distributors. References The proposed rule requires the disclosure of a minimum of ten prior purchasers and I am glad to provide references, but, in this day of identity theft, I am very uncomfortable giving out the personal information of individuals, particularly without their approval. Also, giving away this information could damage the business relationship of the references. In order to get the list of the ten prior purchasers, I would need to send the address of the prospective purchaser to Young Living headquarters and then wait to receive the list. I also think the following sentence required by the proposed rule will prevent many people from wanting to sign up as a distributor: 的f 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. Further, Young Living simply does not sell 澱usiness opportunities・in this fashion. Re: Cancellation Some people decide to stop purchasing or purchase very sporadically and lose their distributor status. As with any large business, this amounts to tens of thousands who no longer order from them each year. Maintaining such lists and providing them to every potential distributor and wholesale customer would be an unrealistic burden. Exemption For about 25 years the FTC's Franchise Rule included only those opportunities that required a buyer to make a payment of at least $500 within the first six months of operation. The April 12, 2006, proposed rule completely eliminates this $500 exemption! In 1979, to justify the reasonable $500 exemption, the FTC wisely said: 展hen the required investment to purchase a business opportunity is comparatively small, prospective purchasers face a relatively small financial risk.・This is still true today. This exemption is necessary because without such an exemption this would be devastating to the growth of my business and that of millions of Americans. I believe that the proposed application of this rule to my business constitutes an unjustified overreaching. Please reinstate at least a $500 exemption. I appreciate the work that the FTC does to protect consumers, yet I believe this proposed new rule has many unintended consequences, and there are less burdensome alternatives available to achieving your goals. Thank you for your time in considering my comments. Respectfully, Nancy Coates