| Comment Number: | 522418-08415 |
| Received: | 7/12/2006 7:02:13 PM |
| Organization: | Quixtar / MarkerMan Productions |
| Commenter: | Andrew Gunn |
| State: | OH |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
My wife and I have been independent business owners with Quixtar and the MarkerMan (Jody and Kathy Victor) line of sponsorship for over twenty years. We understand the importance of accurately depicting a business opportunity to prospective members. We acknowledge that, over the years, unethical, and even illegal business models have been proffered on the public, and that the intent of the “Trade Regulation Rule on Business Opportunities” is to help curtail such unscrupulous enterprises. While we laud the “educated consumer” concept, several aspects of the proposed rule would prove to be unfair and generally unneeded hindrances to the IBO in the Quixtar business: 1. The seven (7) day waiting period is unnecessary due to the fact that the new Quixtar registrants’ start-up costs are minimal and refundable. 2. The 10-reference requirement is unsuited to our business model for various reasons. Disclosure of IBO personal data would certainly raise concern over privacy issues. Our business model promotes the building of relationships, and team building. Exposing a prospective IBO to others outside of our line of sponsorship could, at the least, expose the prospect to conflicting or confusing information, and worse, could create an environment where the outside IBO could try to misdirect or “steal” the prospect to register in their own personal business. 3. The requirement to disclose past litigation is ill-conceived as it pertains to our business. Frivolous, nuisance, and “vendetta” type lawsuits are quite commonly faced by most major corporations, not just Quixtar. Corporations are not required to provide such lists to new employment applicants. Unethical corporations will simply ignore this rule, while honest ones will, no doubt, suffer an increase in such frivolous suits brought about by competitors abusing this rule. 4. Income disclosure and/or personal income substantiation requirement would place an excessive burden on the IBO. We have always felt that one’s personal income and financial documentation is private, personal, and certainly no business of the new prospect. The new prospect’s success potential has never been dependent on the success of the sponsor, or line of sponsorship. The “average active IBO income”, providing the SA-4400, and the “success is not guaranteed” disclaimers should be adequate for the prospect to understand that some IBO’s earn a lot, and others don’t. In conclusion, we feel that the above concerns are legitimate once the unique, and time-proven structure of the Quixtar business model is accurately understood. Current disclosure requirements are adequate in informing the business prospect in making an informed decision on participation. While the proposed rules may be suitable to large-investment, franchise offerings, they would not seem to be relevant to our team-building, minimal-investment, home-based business model. They would, in fact, be a crippling burden. Sincerely, Dr. Andrew J. Gunn