|Received:||6/19/2006 6:00:41 PM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:I am writing because about 1 month ago you proposed a new rule : R511993. This new Business Opportunity Rule will put an unnecessary burden on me and other small business owners whom are in the network marketing business. I understand that the intentions were good, however I feel that some revisions need to be made. I oppose the 7 day waiting period to enroll new distributors.This is excessive and a burden to any company or distributor who would be required to document and follow up on the proces and a roadblock to new business development.Fo r a $20 start up fee , in all reality I would have to sell a person twice! I also have concerns about the earnings disclosure portion of the proposed rule. I agree that it would be very good for the prospect to have a realistic expectation of what they might earn however I feel that the bill should be revised to say that there should be a disclosure of an average earnings statement when a prospect requests it. The way the bill now reads I would have to provide a validated , detailed "Earnings Claims Statement Required by Law", additionally the distributor would be required to provide writen substantiation of any earnings claim made upon request.For a small business this would be an excesive burden considering the investment of money to enter in the business in nominal. This proposed rule calls for the release of any information regarding and previous litigation which involves any previous legal actions involving misrepresentations, or unfair or deceptive practices , even if you were found innocent! In todays world people are sue happy and will file for almost anything. According to this bill irregardless of the outcome I would have to disclose it , to a new business partner, which is totally unfair! I would like to see this rule revised to say that disclosure of previous litigation of companies, executives, affiliated companies and like involving fraud and and misrepresentation ONLY IF THE PARTY IS FOUND GUILTY. If the defendant is found not quilty , the parties agree to settle w/o admission of guilt or if the case is still pending, then it should not be disclosed or discused. If it was settled w/o admission of guilt there is usually some public documents available. I also feel that the requirement for disclosure of references needs to be revised. It is a great practice to provide references of satisfied customers, however to REQUIRE a small business to provide this is a huge burden because of several reasons. First it can threaten business relationships of the referenaces who may be involved in other businesses. In addition I view it as a violation of personal confidentiality. In addition , it subjects these references to cross marketing by competitors. I would like the rule revised to say that contact information for urchasers be available upon request, that their availablility be published on company materials, and that due to internet marketing, they not be limited to geographic proximity. I want to say that network marketing is one of the fastest yet most misunderstood methods of moving products in use today. Many network marketing companies are publically traded on the NASDQ (Nuskin, Herbalife,PrePaid Legal, USANA etc.) Many big companies are using network marketing including Citigroup,MCI,IBM, and New York Times best selling authors Kiyosakim Pilsner, Covey have endorsed network marketing. The industry continues to grow and really contributes to our economy. There are 13 Million Americans in the industry selling products & services estimated at more than $29 billion in 203. I understand the role of the FTC, however I believe that this proposed new rule goes far and beyond what is needed and that it needs significant revision. I am in support of the disclosures should be made during the sales process without the requirement of a 7 day waiting period, only if modified as suggested. Thanks for considering my thoughts and ideas.