| Comment Number: | 522418-04332 |
| Received: | 6/26/2006 3:41:28 PM |
| Organization: | Cox Development Group |
| Commenter: | Anton Cox |
| State: | CA |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Dear Sirs, I have been an IBO (Independent Business Owner) with the Quixtar opportunity for several years now. I was recently made aware of the proposed rules you are considering for our type of opportunity, and would like to give you my perspective. One thing we have always appreciated about our organization and this opportunity is that it has never been presented to us or our prospects as a 'get rich quick' scheme. We have always told our prospects and IBOs that this is a business, and as such, will only return what they are willing to put into it. We also give them required literature which discloses financial facts regarding our opportunity and its potential. Our prospects spend an average of about $100.00 at the time of sign-up, and I believe all of that is refundable if they are in any way unsatisfied, although we have never had to find out. We do our best to put quality in before a sign-up so that we have a quality decision on the part of our prospects. Following are specific issues related to the proposed rule. These in particular could have a negative effect on our business, as well as other legitimate oppotunities of the same nature as ours. The requirement of a 7-day waiting period: The main objection I have to this provision is this: How would you feel if you opened your new store, you are totally excited about your chance for the American dream, and then someone comes along and says,"you have to wait 7 days before you can do any business".? Perhaps this would be of value if the investment were in the thousands of dollars, instead of the tens or hundreds, as a 'cold feet' provision, but it certainly would not be a benefit to any legitimate business opportunity. Right now, if we had a prospect change their mind, we would personally refund them. The requirement to provide references: This provision raises a number of red flags. First of all, of course, is privacy. I wouldn't want strangers calling me, and I wouldn't want to give out personal information on others. We always introduce our prospects to several IBOs both in our personal business and in other groups within our organization. What happens to the new IBO who doesn't have 10 people in his/her group yet, and does't know 10 IBOs yet? Is he supposed to give out personal information on people he doesn't even know? Requirement to provide a "Litigation List": To be quite honest, this should either be eliminated or strictly limited to cases where the company was tried and found guilty before a jury. As we all know, our society has become 'sue-happy', and many fine companies have been severly damaged by frivolous lawsuits and false claims. This would have no real effect on bad companies but potentially devastating effects on companies that play by the rules. The requirement for specific earnings disclosures: We already share non-specific financial info such as the average monthly gross income, SA-4400, etc., with our prospects. In all honesty, the money I make is my business, and no one elses. Would you go around asking your co-workers how much they make? Of course not. And what about the newest person, who has no track record yet? The requirement for financial substantiation: We often tell our prospects about the impact that our business has had on our lifestyle, such as bringing my wife home from full time nursing to only having to work part-time. That effect would require a different dollar amount in every instance, and for some that amount would be enough, and for others it would not. By giving a specific dollar amount, some people would take that to be a limit, and others might find it intimidating. I don't see any positive effect in this provision. Thank you for your consideration, Anton Cox