Comment Number: 522418-05442
Received: 7/1/2006 9:48:46 AM
Organization: Cymbeline Associates
Commenter: Kim Tomlinson
State: VT
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

I am writing to comment on the proposed changes to rules governing "business opportunites". I am a Quixtar IBO, and have been associated with Quixtar since 1999 and with its precursor company Amway since 1985. I have worked the business opportunity part-time, along with my regular career acheiving the level of Silver Producer. In addition, I have helped a few people within my organization to acheive the levels of Gold Producer, Platinum and Founder's Platinum acheivement levels. I have a few concerns related to the proposed rules. I believe that while the desire to improve regulation in this field is worthy and that you address some valid areas, your proposed solutions are overly restrictive, narrow and would dampen the economic benefit to people seeking a legitimate business opportunity which can improve their economic level. One such rule is the requirement of a seven day waiting period prior to registering. Legitimate companies offer two things which make this unnecessary: (1) a multiple meeting business process and (2) a satisfaction refund guarantee. When I first saw the Amway business, I was invited to a general session meeting in a local hotel. I was given professionally prepared materials and scheduled a followup meeting to answer my questions. At the second meeting, new questions were raised and a third meeting scheduled. At each meeting, I was offered additional materials to allow me to investigate this business. I was also advised to investigate through discussion with other knowledgible parties. Only after my questions were answered did I register. Having entered the business in this manner, it is a practice I continue to follow 21 years later. I knew that if I was dissatisfied, I could refunded my monies at any time. A second provision which is troubling is that of preparing separate financial disclosures. I believe a better ruling would provide a standard set of disclosures, with a standard calculation. Most persons do not have a background in Finance. To compare a multitude of disclosures, prepared without a standard format and calculation would only cause great confusion and distrust in the entire marketplace. Reputable companies will have no problem complying with standard calculation rules -- such as an Average sales per registrant. Seeing the same format and same calculation will make comparison between opportunities uniform. This also follows government regulatory precedent, as in the calculations for nutrition on food labelling. Another area of concern is a requirement for a litigation list. Proper disclosure is a desirable thing. When I registered with Amway 21 years ago, I felt comfortable I was made aware of litigation of importance to my decision. I was offered opportunity to speak with others about this litigation; my questions were answer openly. However, over 21 years, I have come to observe that there are many frivilous litigous claims, each having little importance to the business opportunity and many of which are never cosidered seriously by the judicial system. To disclose 100% of these claims to persons unfamiliar with the details and resulting judgements places an undue burden on an Independent Business Owner just starting a new business with sweat equity. Lastly, I want to address the area of expectations and disclosures. When I present our opportunity, I make sure that the prospect is aware that it is a legitimate business. What I tell the prospect is that if the prospect should desire to earn $100,000/year, they should be aware that it will take as much work as any corporate executive who earns this amount. It will not happen by wishing it to be so, but rather by working diligently towards a reasonable goal. No one should believe that a legitimate business opportunity will do the same thing a lottery might. It won't. I also offer to be avialable to you for additional comments. I may be reached at the address above. Thank you for thoughtful consideration.