Comment Number: 522418-12382
Received: 7/17/2006 9:07:34 PM
Organization:
Commenter: John Sienkiewicz
State: FL
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

I am a Quixtar Independent Business Owner (IBO). I am just getting started building my Quixtar business, but am concerned about some of the elements of the proposed Business Opportunity rule. First, I take issue with the proposed requirement to wait 7 days after supplying full disclosure information to a prospect before actually registering them. Quixtar offers a money-back guarantee for people who register and then change their minds. This offers full assurance to anyone that they will not be stuck with a decision they regret. Having a 7-day waiting period is like making me wait 7 days after buying a pair of slacks at Sears before I can take them home. It doesn’t offer any greater protection to the prospect than the money-back guarantee, and merely impedes those who want to get a fast start on building their business. I am also concerned about the requirement to give a prospect a list of all lawsuits, arbitrations, and other legal claims in the past 10 years. Again, using the Sears analogy, no one requires a traditional retailer like Sears to give every customer a list of all lawsuits against which they have had to defend themselves for the past 10 years. No traditional retailer could afford to comply, if such a requirement were imposed. Not all lawsuits have a good basis – many are frivolous, and a list that includes frivolous or baseless lawsuits, or even lawsuits that have been decided in favor of Quixtar, would likely leave a very inaccurate picture of the company. The intent should be to ensure that prospects have an accurate picture of the legality of the business they are considering, not just to inundate them with incomprehensible legalese. There’s also a practical matter regarding the difficulty of obtaining a list of lawsuits. Where would an IBO get such a list? If I had one, how would I know it was current? If disclosure of lawsuits is still considered important, perhaps the requirement could be fulfilled by posting a list on the company website, and requiring that prospects be provided a link to that website. The requirement to give prospects a list of 10 references in the local area would prove onerous to many new IBO’s. For several months after I started my business, I didn’t even know 10 other IBO’s in the area. Even today, I don’t have names, addresses, and phone numbers of 10 IBO’s. Requiring me to obtain those references, and disseminate that information, would violate their privacy. What practical purpose does this requirement serve, anyway? Finally, I have concerns about the requirement to provide prospects with personal financial documents to substantiate any income claims. I have very little income from my Quixtar business so far, but hope to have more in the future. Because my income is so small, I make no claims about my income to prospects. At any rate, one of the attractions of this business is that a prospect’s income potential is not limited by what I might make, but by their own abilities, aptitudes, and willingness to work at their own business. If every IBO depended on making a lot of money to impress prospects into registering, the system would never work – it would be a Catch-22 (I couldn’t build a large, profitable business until I registered a number of prospects to build my downline, but I couldn’t build my downline until I had a large, profitable business).