|Received:||7/14/2006 3:31:22 AM|
|Organization:||Young Living Essential Oils|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:While I understand the responsibilities of the FTC to protect the public from “unfair and deceptive acts or practices,” I believe that this proposed rule could prevent me from continuing as a distributor for Young Living Essential Oils. Seven-Day Waiting Period. Young Living's Starter Kits cost only $50.00, and each kit contains products, samples, training materials, etc. When a Starter Kit is purchased, the purchaser becomes a distributor and is granted special discounted pricing on all orders. No commissions or other compensation is paid on these kits, and the company just covers its production costs. Having this waiting period gives the impression that there might be something wrong with the company or the compensation plan. I also think this seven-day waiting period is unnecessary because Young Living fully refunds this cost if the customer decides to send it back. Requiring a seven-day waiting period before a distributor is allowed to even place an order would be destructive to the businesses of thousands of distributors. It would also be quite burdensome for me to keep such detailed records of when I spoke with every single person about Young Living, and it would create lots of unnecessary paperwork to have to send these reports to my company headquarters. Litigation Information. The proposed rule also calls for the release of any information regarding lawsuits involving misrepresentation or unfair or deceptive practices, regardless of whether the company was found innocent or not. Today, anyone or any company can be sued for almost anything. It does not make sense to me that I would have to disclose these lawsuits unless Young Living were found guilty. References. The proposed rule requires the disclosure of a minimum of ten prior purchasers nearest to the prospective purchaser. I am glad to provide references, but I am very uncomfortable giving out the personal information of individuals, particularly without their approval, to strangers. Also, giving away this information could damage the business relationship of the references who may be involved in other companies or businesses, including those of competitors. I also think the following sentence required by the proposed rule will prevent many people from wanting to sign up as a distributor: “If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers.” People are very concerned about their privacy and identity theft. Cancellation. Some people decide to stop purchasing from Young Living after a period of time or purchase very sporadically and lose their distributor status. As with any large business, this amounts to tens of thousands of individual customers who no longer order from them each year. Maintaining such lists and providing them to every potential distributor would be an unrealistic burden. Exemption. For about 25 years the FTC's Franchise Rule included only those opportunities that required a buyer to make a payment of at least $500 within the first six months of operation. Any buyer making payments of less than $500 within the first six months was exempt from further requirements. The April 12, 2006, proposed rule completely eliminates this $500 exemption! This exemption is necessary because without such an exemption, the proposed rule places an unreasonable burden on tens of thousands of Young Living distributors, like myself, and on millions of direct selling and network marketing distributors throughout the US. This would be devastating to the growth of my business and that of millions of Americans. Please reinstate at least a $500 exemption. I appreciate the work that the FTC does to protect consumers, yet I believe this proposed new rule has many unintended consequences, and there are less burdensome alternatives available to achieving your goals. Thank you for your time in considering my comments.