|Received:||6/30/2006 12:50:32 PM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:Government tends to over-regulate in an idealistic attempt to purify all behaviors. Independent business ownership has risk. The proposed rules, as they stand, would serve to discourage people who could be legitimately and substantially successful. If the FTC imposes these on direct selling businesses, it must also include all other opportunities, like paying for courses on flipping real estate or starting an eBay business. It should include all practices when a person joins a firm as a partner or has the expectation of doing so when they are hired as an employee. As a Quixtar IBO, I support the changes as proposed by the IBOAI board of Quixtar. ANY waiting period is unnecessary if there is a reasonable, simple, and clearly explained cancellation policy. I ALWAYS tell prospective IBOs that they can cancel at any time in the first 60 days and get their registration fee back. The right of cancellation is an area where Quixtar could improve its disclosure; albeit, Quixtar's timeframe is more than reasonable. A new IBO will not have 10 references unless they are those of upline people. This would be acceptable, even beneficial, depending on the information the FTC believes the references are then required to disclose. This must be made clear if this aspect of the rule survives. Quixtar and IBOs should not have to disclose all legal allegations - allegations are NOT PROOF of a violation of law. An allegation is merely an assertion made by one party against another that must be proven with evidence - otherwise the allegation is false or meritless, but the implication was harmful. Some people who quit wish to inflict harm out of bitterness or discouragement from their personal failure to perform or succeed at the activities of the business as the business was intended to be performed. In addition, some legal settlements do not allow disclosure of the terms of the settlement agreement. Disclosing lawsuits, arbitrations or other legal claims simply because they were alleged means that every spurious claim is given the same weight as every real violation of law, and that is unreasonable. This needs to be reconsidered in four parts: 1) What needs to be disclosed, 2) How is it to be disclosed, 3) Who must disclose it, and 4) When must it be disclosed? For example, does an IBO who has never had a proven legal infraction or unfavorable arbitration have to disclose every legal infraction or unfavorable arbitration of every other IBO, or spurious lawsuits by former IBOs? I think the rule, as it stands, would require this - and that is overreaching and unreasonable. While IBOs should not have to disclose the financial records of their independent businesses, disclosures for income claims are reasonable. Quite simply, they should state that, if an IBO attains a certain volume level, then based on how they attained it (all retail sales or a combination of retail and wholesale sales) they can expect to receive such and such an income. These disclosures can easily be made available by the "sponsoring company," in my case, Quixtar.com, as long as they are not specific disclosures of the income of specific individuals. Quixtar can easily do this, although they only do so in part today with their SA-4400. However, I do it personally, well beyond the content of the SA-4400, because it is fair and reasonable that a new IBO be able to see the potential income based on various ways of building their independent business (and it does NOT always require sponsoring to attain or maintain a good income with a Quixtar-based business). The important thing is NOT to construct rules that discourage people from attempting to start and build a business of their own. Unfortunately, the rules, as proposed, specifically having to do with legal ALLEGATIONS, would scare off many people from starting in a legitimate direct selling business. For more detail, please feel free to contact me at .