Comment Number: 522418-05974
Received: 7/4/2006 6:04:54 PM
Organization: Quixtar
Commenter: Adam Lovell
State: CO
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

I've been a Quixtar IBO (independent business owner) for about 9 months now, and working with their business system has been one of the most positive experiences I've had. The success principles I've been taught are invaluable, and the income I'm earning, while not life altering, has SIGNIFICANTLY helped me adjust to my the rising cost of living and decreasing pay... I don't know how I would have managed over the last 6 months without the extra income. (I work in the computer industry, an industry which has changed drastically over the last 5 years...) One of the reasons I've had such a great experience with Quixtar was actually the way I was introduced to it... When I was first shown the IBO business plan the person who presented it was very direct in explaining that while this opportunity had incredible income potential, this potential would only be realized through a great deal of effort and time (I was instructed that I should not expect significant income for at least 2 to 5 years... and that was assuming you put in at least 5 to 10 hours a week. I was also told that this was not guaranteed by any means, but would depend entirely on my performance, and the performance of anyone I started in the business.) I spent a total of three weeks examining this business before I decided to become involved, and I was shown the business on 3 separate occasions. I was never pressured, nor did anyone ever evade any of my questions or concerns about the business. I am concerned about several of the proposed rule being discussed, in particular: 1. The requirement of a 7 day waiting period In the case of Quixtar in particular, I don't really see what this rule would do for the potential IBO, as most people who seriously consider this business take at least a week to decide if this is right for them. I can tell you that as an IBO this has the potential to seriously impact my business, as it is relatively common for friends and family of an IBO to get started immediately after sign up (i.e. my father signed up the same day that I did, which wouldn't have been an option had this rule been in effect). I feel this rule may make it harder for new IBOs to make immediate profit. It should also be noted that Quixtar gives the option of a full refund of the registration fee within 6 months of sign up. 2. The requirement to provide references This rule probably concerns me the most, especially since the rule (as I understand it) requires LOCAL references... A great deal of my current business is based in areas in which Quixtar has no presence whatsoever, in many of these places there are only 2 or 3 IBOs within a reasonable distance. I feel this rule would SEVERELY impact IBOs in rural areas, in which a great deal of my business is based. In addition, it also introduces the possibility that an unscrupulous IBO might "steal" a prospect. 3. The requirement to provide a "Litigation List" This seems strange, in that, to the best of my knowledge, no other legitimate business opportunities are required to provide such information. If I were to research a McDonald's franchise I doubt seriously they would be required to provide me with a list of all pending lawsuits against those companies or their many thousands of franchises. I see no reason why that would be relevant info for the franchise industry, nor why it would be relevant in the direct selling industry. 4. The requirement for specific earnings disclosures This seems to be a base Quixtar is already covering, as we already include the average earning disclosure on the sign up form. How would further info benefit a prospective IBO? It seems that further info would probably just be confusing... 5. The requirement for financial substantiation Currently I give potential IBOs an approximate income I'm making, however, I don't think I would be comfortable with revealing detailed financial information as I feel that would be a violation of my privacy. Thank you for your time!