|Received:||7/13/2006 4:53:19 PM|
|Commenter:||Ron & Regina O'Rourke|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:We are writing to comment on the proposed rule, R511993, concerning business opportunity sponsoring.[br] We are for the goal of providing the appropriate information to any and all potential new business owners. Only an informed person can make the decision to pursue their dreams via a business opportunity.[br] To start, we are a husband and wife team of Quixtar Independent Business Owners (IBOs). We have been IBOs since Nov 91. At the time of our decision to pursue the opportunity, we were provided with a document (SA-4400) helping us to understand the potential of the business opportunity and the "averages" involved. We were also provided with recordings of personal testimonials of others who chose to pursue the opportunity. Of course, since this an opportunity and not a guarantee, we also understood it was up to us to succeed (i.e., there was potential to "fail", but if we did so, it was because of our own inaction).[br] It is with this thought in mind we would like to address our concerns with the proposed rule.[br] 1) On the seven day waiting period for registration. Waiting seven days does not insure full disclosure or that the potential IBO is using the seven days to investigate the organization. It is also quite possible to "work the business" without registering. This will only place a burden on the new IBO.[br] 2) Providing references. This can be a benefit to the registration process. However, it is only beneficial if the references are in the line of sponsorship or other IBOs on the same business team. Not all organizations are the same. As such, providing references to IBOs in other organizations would not help the new IBO understand how we are building our organization. In fact, it would introduce confusion.[br] 3) Provide a "litigation list". This one is troubling in that there is no way we can know what litigation every IBO is facing. There is no way the managing company can know this. And at least some of this litigation will be spurious. Even if the litigation is 100% correct, it is of no benefit to a new IBO to know that another IBO broke the rules. It is like telling a new driver (when obtaining their license), that their neighbor has had 2 speeding tickets in the last year. It is irrelevant.[br] 4) Earnings disclosures and financial substantiation. At first glance, this seems like a good idea. In studying it closely, there are several flaws. First, it not the business of a new IBO what we make. In the Quixtar opportunity, they are free to surpass our income if they put in the appropriate effort. Second, knowing our income (or the income of even the most successful IBOs) does not give them an idea of the full potential of the business model. Third, every new IBO is establishing their business for their own dreams and goals. Their goals may be small and their business size will reflect those levels.[br] As you can tell, we feel many of these provisions were not properly thought out before being introduced. We encourage the FTC to continue the issue of fair disclosure.[br] Thank you for the time and effort so far. We know the FTC will reach an equitable ruling in this matter.