| Comment Number: | 522418-09553 |
| Received: | 7/14/2006 6:11:22 PM |
| Organization: | Oldert & Associates |
| Commenter: | Gary Oldert |
| State: | SD |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Gary and Judy Oldert Oldert and Associates July 14, 2006 Federal Trade Commission/Office of the Secretary, Room H-135 (Annex W) 600 Pennsylvania Avenue, NW Washington, DC 20580 Re: Business Opportunity Rule, R511993 Dear Sir or Madam: We are writing to express our strong concern and opposition to the proposed Business Opportunity Rule R511993. We understand that the Federal Trade Commission must protect the public from "unfair and deceptive acts or practices," but the rule as proposed would make it very difficult for us to operate our business as a Shaklee Independent Distributor. A confusing and burdensome section of the proposed rule is the seven-day waiting period to enroll new distributors. Most of the people who sign a Shaklee application are consumers of the products. If they later wish to build a business, all they must do is supply Shaklee Corporation with their Social Security Number or Tax Identification Number. No additional kit, fee or application is required. The Shaklee Member Kit costs only $19.95. This is far less than most consumer purchases for all manner of household appliances. How about tires for the family car? One (1) tire alone costs more than our membership fee and we surely do not have to wait for it. If our hand held mixer in the kitchen broke today we would not have any waiting period nor for any other appliance of greater or lesser value. The waiting period is also unnecessary in that Shaklee Corporation already has a 90% buyback policy for products, including the Member Kit, purchased by a distributor within the last two years. The proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. Is this wise? In this day of identity theft, we are uncomfortable giving out the personal information of other Shaklee distributors, without their knowledge or consent. We understand that those who sign up after the rule takes effect would be told in writing "If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers." Is the American spirit of competitive business trying to be broken? This would dissuade new people from signing up as distributors. They are already concerned about their identity theft, their privacy and now it is again threatened if they try to realize the “American Dream” of owning their own business. Providing the 10 references also could damage the businesses of Shaklee distributors. Lower ranking distributors (those not having achieved the rank of a Business Leader) often are involved in more than one direct selling company. Providing a list to a potential recruit, who may already be a distributor for a competing direct selling company, may be an invitation to solicit existing distributors for such other opportunity. The 10 reference requirement is an administrative burden. To be more direct it would be a nightmare. To obtain the list of 10 prior purchasers, we will need to provide Shaklee Corporation with the prospective distributor's address, and wait to receive the list of the 10 nearest distributors who became distributors within the past three years. Each prospective recruit will need a customized disclosure statement. This will result in a delay far longer than seven calendar days before anyone can sign an application. Many people enter direct selling to earn extra income for a specific goal, such as holiday purchases or a family vacation. The wait which the proposed rule creates may make the goal unattainable. In fact if may very well kill the whole goal of building a business relationship let alone go into business for oneself. Why would you want to be burdened with such hampering restriction? The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation, or unfair or deceptive practices over a 10-year period. It does not matter if the company was found innocent or not liable. It does not make sense to us that we would have to disclose these lawsuits unless Shaklee Corporation, or its officers, directors or sales department employees, had been found guilty or liable. Fifty-year old companies such as Shaklee would be at a disadvantage compared to start-up companies, which may not yet have experienced litigation but are far more likely to have legal issues surrounding their opportunities. We have been a Shaklee Distributor for more than 29 years. Originally, we became a Shaklee Distributor because we love the Company's nutritional/personal care/household products/air purification/water treatment products. We enjoyed the health they provided for our family. Today we are sharing this with friends and acquaintances building a Shaklee business. It is our main source of income. Thank you for considering my comments. Sincerely, Gary and Judy Oldert