Comment Number: 522418-07426
Received: 7/10/2006 8:12:13 PM
Organization:
Commenter: Stephen Oster
State: VA
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

The FTC’s proposed regulation of franchise opportunities is well-intended, but seriously flawed. These regulations will certainly kill a lot of great “small investment” opportunities like Quixtar or Mary Kay. These companies are pillars of commerce and opportunity in America, and they have a proven and respected track record. Aiming “solutions” at them that are clearly intended for big-dollar franchise frauds is a myopic mistake. People have to be free to open businesses in this country. Government has a responsibility to protect the sanctity of contract by punishing force or fraud. If someone gets excited about a business opportunity on it’s merits, because of how it could benefit them, and they’re presented with accurate information to make that decision, then that’s called leadership, not fraud, and in a free country, leadership should pay well. The effect: Proposals like this shut out the legitimate small investment opportunities with a high barrier to entry, leaving only big-dollar opportunities with the money and profit margins to endure the regulations. This actually encourages big-dollar fraud opportunities as unscrupulous or speculative franchisors use their clout and money to invent ever more clever workarounds for all the regulations. The process culminates in the usual socialist spiral: An intervention creates unwanted secondary effects, which necessitates further interventions and control, until so little opportunity for innovation exists that profits evaporate, and the industry goes somewhere else. As an Independent Business Owner (IBO) affiliated with Quixtar, I request you dramatically revise the proposed regulations to ensure that the real offenders, the big-dollar franchise frauds are the only entities impacted by the law. Sincerely, Steve Oster