| Comment Number: | 522418-08883 |
| Received: | 7/13/2006 4:27:30 PM |
| Organization: | Quixtar |
| Commenter: | Sarah Cluff |
| State: | AZ |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I am an independent business owner affiliated with the Quixtar corporation. I have been a registered affliliate of their's for 5 years. I have been able, through hard work to work my way up their bonus scale and am currently at their 25% level. They call it the Silver level. I make around $500 per month because of the way I have structured my business. I am completely happy with my association with quixtar and have always found them to be completely ethical and helpful in their dealings with me and my team. When I present the business plan to prospects, I present possible average incomes as stated from quixtar that indicate what an active business owner earns. When I register people in my business, I give them the disclosure statement from Quixtar that includes the rules and regulations. Their cost of enrollment is approx. $80 with an optional product package of $60. All of this fee is 100% refundable up to 180 days after registration with no questions asked in case a prospect changes their mind. I have never had any one who had a problem with their dealings with Quixtar. The only people who have ever left my group have been those who decided that they didn't really want to work as hard as it takes to earn the possible incomes. The problems I foresee with the proposed ruling are as follows: Problem 1: Prospects would have to wait seven days after receiving disclosures before they could register. Solution: Eliminate the waiting period, at least for opportunities like Quixtar where a prospect can get his money back if not satisfied. Problem 2: You would be required to give every prospect a list of "references" – the names, addresses, and phone numbers of 10 other IBOs (Independent Business Owners) in the area – seven days before the prospect registers. This requirement would infringe on the privacy of every IBO whose name, address, and phone number was provided to prospects. It would also penalize the sponsor, who would be required to give his prospect contact information for 10 other IBOs, any of whom might be happy to register the prospect themselves. Solution: Eliminate the requirement to provide 10 references. Problem 3: You would have to give every prospect a list of all lawsuits, arbitrations, and other legal claims for the past 10 years involving Quixtar and its IBOs where the plaintiff alleged fraud, misrepresentation, or unfair trade practices – regardless of whether or not the accusation was true. Among other problems, this requirement would open up Quixtar and other legitimate companies to false accusations. Meanwhile, dishonest companies would simply ignore the rule. Solution: Eliminate the requirement to disclose past litigation. Problem 4: You would have to make a different disclosure for every income claim.This would include any examples you might use during an opportunity presentation to illustrate how the Plan works. Solution: If disclosures are needed, require a simple, standard, easily understood disclosure such as "average monthly gross income for 'active' IBOs." Problem 5: You would be required to provide prospects with personal financial documents to back up ("substantiate") any income claim. This would also greatly infringe on the privacy of an individual. Business owners of "traditional" business are not required to disclose their financial statements to everyone who does business with them. Solution: IBOs should possess substantiation for any claim but should not be required to disclose it except when required by the FTC and similar state agencies in an agency investigation. I am in agreement of the need to eliminate as much as possible the scams in business. But I am very much opposed to harming and handicapping legitimate businesses just because they happen to be structured similarly.