|Received:||7/11/2006 12:16:09 AM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:I understand the spirit of the proposed FTC rules for direct selling, however these rules would greatly impact my part-time direct sales business. I am an "Independent Business Owner" (IBO) registered with Quixtar since 1999. As an IBO I am affliated with an association called Globalnet whose purpose is to better equip IBOs to become successful business owners. As part of Globalnet I attend weekly business owner meetings and period conferences throughout the year. 7 Day waiting Period: Quixtar's sign-up is not financially burdensome. Someone could sign-up with sample products for under $150. Quixtar is above board on its refund policy. Since the initial investment is not intrusive I believe a 7 day waiting period is overbroad. I can understand if the initial investment is $500 or more to require a 7 day waiting period. At a minmum there should be a sliding scale if the iniital investment sign-up is over a certain dollar amount. REFERENCES: Because Quixtar is on a word of mouth basis and does not advertise, all IBOs signing up are from referrals. Every IBO is sponsored by another IBO. With associations such as Globalnet (there are numerous other associations all over the US that provide the same type of business skills development that Globalnet provides) a new IBO signs up immediately meeting other IBOs with opportunities to determine the success of other IBOs in the business. DISCLOSING INCOME: When asked I always tell an IBO I'm sponsoring how I'm doing in the business and point out their potential for growth is open. The new sign-up can make less, equal or more than my income from Quixtar, depending upon how much effort they want to put in the business. New IBOs are immediately exposed to many IBOs whose success ranges from a few dollars a month to thousands of dollars each month. In the sign-up materials Quixtar also discloses the average monthly income of IBOs which is approximately $150 a month. With the yearly renewal, an IBO can terminate their business by not renewing (approximately $40 per year) Throughout the year IBOs receive ongoing information on Quixtar's successful IBOs. DISCLOSING CURRENT LITIGATION: I believe such a disclosure requirement would discourage IBOs. As an IBO disclosure of Quixtar corporate lawsuits may not concern my day to day business. Quixtar presently does an excellent job of disclosures regarding its business practices. Again for the minimum $150 or less investment required of new IBO signups, I feel this provision is overbroad. If the initial investment required thousands of dollars, disclosure of any current litigation which could impact the investment would be helpful in other cases but not with a company like Quixtar. Quixtar communicates any major concerns that affect IBOs through its IBO website and periodic information mailed to IBOs.