|Received:||7/17/2006 7:00:10 AM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:I am a state Assistant Attorney General and my wife is professor of marketing at a major D.C. area university. We believe the proprosed rule is well intentioned but misdirected, will significantly harm legitimately run operations and procedures, and will be largely ineffective against harmful operations. We have been in the business since Quixtar launched and operate with forthright, highly ethical people. We make more than $50K a year and are moving toward $100K, part-time. We only talk with people who are looking at a business. We tell people that Quixtar is a networking and product/service distribution business and like any business requires a vision, planning, implementation, funding (even at low levels like ours) and consistent attention. Your rule looks to protect consumers. We tell people not to become actively involved if they only want to be a consumer. In any event, Quixtar has a 100% satisfaction/ return guaranteed policy on most of its products. List of 10 Reference Names - violates privacy of others, inhibits ready movement of those who want to develop quickly,and its good purpose can be easily circumvented by anyone with a list of 10 friends who want to run a scam. Seven-Day Waiting Period - inhibits freedom of people who want to develop a business quickly. Litigation List - I litigate for government. Anybody can say anything in pleadings, true or not. This rule will encourage anyone with any displeasure at companies to add on a fraud, misrepresentation, etc. count just to force a quick settlement or expensive and unnecessary defense. It is inherently unfair and presumes the plea of fraud valid regardless of merit or even facial viability. Earnings Disclosures - violates privacy. Quixtar already has a form (SA-4400) which presents income averages and targets. But there are other opportunities for income (education tools) which are nonspecific. We simply inform people of these other income potentials available to all who reach certain levels. We also low-ball incomes since most people could not relate to the incomes that are available. We disclose anyway, despite the invasion of our privacy, simply for transparency and credibility with new people. Also, as any accountant knows, there are all kinds of "income". As my income tax course teacher told us on first day of class, "a dollars is not a dollar is not a dollar." Much of our income we can offset with legitimate business and other deductions, so our net income might look low. But the cash flow certainly isn't. Financial Substantiation - See above. Tax returns are by law private so your rule might potentially violate some tax statutes. Great risk of violating privacy w/o regard to work ethic or skills of the one presenting business opportunity. Would most harm new people trying to establish a business who have not had time to develop any success. Conclusion: I fear the FTC has initiated well-meaning efforts to "protect" consumers but laid hold of the proverbial sledgehammer instead of a scalpel, thereby harming simple and well run businesses. Our business is not for consumers. We simply make them wholesale or retail customers. Our business is intended for people who want to own and operate an internet-based business and understand that business will require of them a business mind and not an employee/consumer mind, with corresponding efforts. Thank you for the opportunity to respond to your proposal. We genuinely hope that business people will be given great hearing in your deliberations because the rules as proposed have the potential to create great harm to our buiness.