|Received:||7/14/2006 5:26:36 PM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:As a long-term Quixtar-affiliated Independent Business Owner, I applaud FTC's commitment to improving consumer protection as it relates to high-cost franchise operations, pyramid schemes and other questionable business practices. These types of schemes have hurt all of us who own legitimate, credible and recognized direct-to-consumer businesses. I would urge FTC to separate legal and respected companies, such as Quixtar, Avon and others from those at whom the proposed rules changes are meant to regulate. If care is not exercised in the way the code is written, it may damage my ability as a lawful Independent Business Owner to conduct my business. Certainly the intent of the proposed FTC action is to protect the general public from unscrupulous operators and predatory practices of a few who are attempting to deceive, and not to unnecessarily burden legitinate American business people in the lawful conduct of their business. Here are a few of my personal concerns with the proposed changes: (1) The requirement to provide references would open this industry to wide-spread poaching of another's legitimately acquired prospects. I see this as adversely affecting the public, as a prospect would likely have a number of people attempting to recruit them. This does not serve the interests of the FTC, legitimate direct-selling entrepreneurs, or the American public. The damage to credibility of legitimate practitioners would be tremendous. (2) The requirement for financial substantiation is intrusive and unweildy. Quixtar already discloses in its sales and recruitment literature average earnings for active IBOs and defines what an active IBO is. To go beyond this level of disclosure, asking individual IBOs to provide personal financial documentation is an intrusion into privacy. Although many questionable companies out there are making outrageous earnings claims, wouldn't a better way to handle this be through an exception-based enforcement, such as responding to specific consumer complaints? (3) The requirement for a litigation list is unfair. Anyone can be litigated at almost any time for almost any reason, whether there is a basis in law for it or not. Any high-profile company in the marketplace today is going to attract its share of lightning. Wal-Mart is an excellent example, as they face new lawsuits every day brought by people who are looking for deep pockets to sue. Consider a start-up company that is small, employs unsavory or even illegal means, but flies under the litigation radar. Are they a more favorable option simply because they have had no litigation against them? (4) The requirement for a 7 day waiting period is unnecessary if the company offers a complete money-back guarantee, as does Quixtar and other established and reputable companies. If a prospect changes their mind, we will refund their money, and they are out nothing. Isn't this a better option than requiring them to wait 7 days? When people want to get started in a business, they are ready to get started. A government-mandated waiting period to start their own business is unnecessary and counter-productive to the citizens of this country, so long as their interests are protected. In conclusion, I would like to go on record that I do support FTC in their effort to clean up deceptive practices in the exploding home-based-business industry. Pyramid schemes, inventory loading, high-cost franchise fees and other predatory practices should be addressed. But I also ask that FTC not harm legitimate home-based entrepreneurs who are working to improve their financial standing by offering another legitimate avenue for Americans to own their own businsesses without having to go the traditional franchising route that eliminates many of us who don't have the means to afford a McDonald's or Coldstone. This is a great industry. Please clean up the questionable practices, but please don't harm legitimate entrepreneurs in the process. Thanks.