Comment Number: 522418-03727
Received: 6/21/2006 7:07:47 PM
Organization: New Vision
Commenter: Charles Asmann
State: MI
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

First and foremost, I'd like to express my appreciation of your intentions of eliminating shady business practices. In the last 25 years I have been involved in 4 different MLM business opportunities. Fortunately for me and my family, the businesses I have chosen to become involved with have been legitimate and honest. Yes, I have heard stories from people who haven't been as fortunate. I believe your efforts, properly administered, will help to reduce the shadow cast upon the Network Marketing industry by dishonest people and companies who are only out to make a fast buck at the expense of honest people. After about a decade layoff from Network Marketing (MLM) I have recently joined New Vision as a distributor. They are a member of the DSA and, from what I have seen, "squeeky-clean". I became a distributor as a means of earning some additional money to support my family and to rebuild my retirement savings which has become badly depleted over the past few years. I am counting on and working toward my success in this business. I have some thoughts and suggestions regarding the Business Opportunity Rule that I would like to share. If I understand them correctly, the rules, if initiated as written would seriously cripple the Network Marketing industry as a whole, the good companies as well as the ones you are targeting. For example, the 7 day waiting period just isn't appropriate or necessary for he Network Marketing business. By contrast, in 2003 I bought a basement waterproofing franchise for $20,000 or thereabouts. This 7 day rule is perfect in that scenario where thousands of dollars are on the line. However, in Network Marketing (using New Vision's policies in an example) you can join for $15 plus whatever products you wish to purchase...and those products are returnable for a year. The 7 day rule would be like shooting a mouse with a cannon in this scenario. When I bought the basement waterproofing franchise that I mentioned earlier, I studied the business opportunity for months and met with accountants and lawyers. On the other hand, a person generally makes a decision to join a network marketing within a day or so based on personal inspiration. There is little to risk so months of analysis aren't necessary. Neither is the 7-day rule. It seems to me, in general, the rules proposed are better suited for larger business ventures where the initial and ongoing investment is in the thousands of dollars. I believe that there should be other rules to judge Network Marketing companies: Such as: Limiting the initial investment Limiting the amount of ongoing purchase requirements (warehousing) Product return policies Perhaps a 3-day change your mind policy. Clearly stated compensation plan The Network Marketing industry provides opportunity and hope to hundreds of thousands of people around the world. It is wholly different from traditional business and, while it absolutely needs to be controlled, it needs to be governed by an entirely different set of rules. I would encourage and plead with you to please consult with the leaders of the DSA before taking an overly broad brush to this legislation. Please take care in administering these rules or the impact on a wonderful industry will be devastating and the lives and dreams of thousands of Americans will be negatively impacted. Thank you. Chuck Asmann Novi, Michigan