| Comment Number: | 522418-12669 |
| Received: | 7/17/2006 11:29:32 PM |
| Organization: | The Pampered Chef |
| Commenter: | Joanne Mclaughlin |
| State: | MN |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I am writing because I am concerned about the proposed Business Opportunity Rule R511993. I believe that in its present form, it could prevent me from continuing as a Pampered Chef Director. I understand that part of the FTC’s responsibilities is to protect the public from “unfair and deceptive acts or practices,” yet some of the sections in the proposed rule will make it very difficult, if not impossible, for me to sell Pampered Chef products. I have been a Cooking Consultant / Director with The Pampered Chef for more than 16 years. Originally, I became a consultant in my company because I felt the products were exceptional and I was pretty desperate to earn additional income. Presently, as my husband is retired I support my family through my direct selling business. I have 6 children and the future of my family is dependent on the stability of the direct selling industry. One of the most confusing and burdensome sections of the proposed rule is the seven-day waiting period to enroll new consultants with The Pampered Chef. The sales kit only costs $90.00. People buy TVs, cars, and other items that cost much more and they do not have to wait seven days. This waiting period gives the impression that there might be something wrong with the company or the compensation plan. I also think this seven-day waiting period is unnecessary, because the company I represent makes sure that whoever buys the kit doesn’t lose anything. In fact, the $90 buys a kit worth $350.00 of very useful, practical products that every kitchen could use. Should anyone opt to discontinue representing this company there is no penalty and no one loses anything. Under this waiting period requirement, I would need to keep very detailed records when I first speak to someone about The Pampered Chef and will then need to send in many reports to my company headquarters. There is enough stress in life as one tries to make an honest living than to have to add all of these burdensome activities. The proposed rule also calls for the release of any information regarding lawsuits involving misrepresentation, or unfair or deceptive practices. It does not matter if the company was found innocent. Today, anyone or any company can be sued for almost anything. It does not make sense to me that I would have to disclose these lawsuits unless The Pampered Chef is found guilty. Otherwise, I feel we, The Pampered Chef and I are put at an unfair advantage even though The Pampered Chef has done nothing wrong. Finally, the proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. I am glad to provide references, but in this day of identity theft, I am not comfortable giving out the personal information of individuals (without their approval) to strangers. Also, giving away this information could damage the business relationship of the references who may be involved in other companies or businesses including those of competitors. In order to get the list of the 10 prior purchasers, I will need to send the address of the prospective purchaser to The Pampered Chef headquarters and then wait for the list. I also think the following sentence required by the proposed rule will prevent many people from wanting to sign up as a salesperson - “If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers.” People are very concerned about their privacy and identity theft. They will be reluctant to share their personal information with individuals they may have never met. I appreciate the work that the FTC does to protect consumers, yet I believe this proposed new rule has many unintended consequences and there are less burdensome alternatives available to achieving your goals. Thank you for your time in considering my comments. Respectfully, Joanne McLaughlin Joanne McLaughlin Independent Executive Director The Pampered Chef