|Received:||7/15/2006 6:38:19 PM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:Dear Sir/Madam, First of all, thank you and the Commission for allowing us to voice our opinions on the proposed Business Opportunity Rule. If the Rule is not modified, there will be a burden to the network marketing industry. It could destroy or make it very difficult for a business just starting. I have been with XanGo since October 5, 2005 and my first experience in MLM. If the proposed rule is passed, new businesses like mine will be set back, it represents a significant burden, although well intended. Seven day waiting period to enroll new distributors: In essence, one would have to sell a person twice on the same business—even if the start-up fee is a mere $35.00. A person can purchase new car, truck, TV, a boat, etc., without a seven day waiting period. XanGo already has a generous buyback policy, which represents little or no risk to a prospective purchaser. Also, if we find a real go-getter, he/she must wait the 7 days to get started. Thus, this unnecessarily delays new business development. Previous litigation: The rule also calls for the release of any information regarding prior litigation and civil or criminal legal actions involving misrepresentation, or unfair or deceptive practices, even if you were found innocent. In this case, only if a person or entity has been found guilty should any information be given. Nearest references: The rule requires the disclosure of a minimum of 10 purchasers closest to you or the prospective purchaser. It would not be wise to provide personal information to strangers. Females may be subject to racial or sexual harassment. This is really a violation of personal confidentiality. This will also prolong the seven-day waiting period. Also, if the prospect does not become a purchaser, it would have been a waste of time. While it is a good practice to provide references of satisfied customers, this is also a burden for small businesses. Unfortunately, requiring the release of this information can threaten the business relationship of the references that may be involved in other companies or businesses that are not bona fide businesses. This rule would be an overburden to the company or the distributor in accessing a database. It may also be impractical to provide 10 people closest to a prospect due to the worldwide opportunities of network marketing. Credibility: The network marketing industry is one of the few remaining opportunities for people to leverage their time and limited resources to earn additional income or to create a new career. Many network-marketing companies are publicly traded on Wall Street including Herbalife, Nu Skin, Pre-Paid Legal Services, USANA and others. Top business management leaders endorse network marketing and New York Times best-selling authors Robert Kiyosaki, Paul Zane Pilsner, and Steve Covey have endorsed network marketing. Even well known entrepreneurs, Tony Robbins, Tim Sales, Jim Rohn, Ellie Drake, Dani Johnson, Jeffery Combs and Erica, to name a few endorse this growing industry. MLM’s contribution to the economy: The industry is also growing in popularity and contributes to the US economy. This growth should be encouraged. There are 13 million Americans involved in this network marketing industry today. The network marketing industry contributes to our growing economy. It is estimated that 200 million people will enter this industry over the next decade. Sales of products and services through network marketing are estimated at more than $29 billion in 2003. And small business, account for more than one-half our nation’s economic output. I have been involved in network marketing for just a little more than a year. It seems that NWM is one of the best methods to help people and provide me with residual income (boosting the economy) and spend more time with grandchildren. In summary, I understand and value the role of the FTC mission “to stand up for America’s free market process and for its consumers, who beneﬁt from competitive markets in which truthful information ﬂows.” However, I believe this proposed new rule exceeds what is necessary and needs significant modification. We live in a free market economy where people have the responsibility of making informed decisions based on best information. I am in support of the disclosures should be made during the sales process without the requirement of a seven-day waiting period, which is my strongest objection to the rule. Thank you, in advance, for reviewing and posting my comments.