Subject: The Longaberger Company's comments on 16 CFR Part 436
April 30, 1997
Office of the Secretary
Re: 16 CFR Part 436 - Trade Regulation Rule on Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunities
I am writing to strongly support the comments of the Direct Selling Association regarding the trade regulation rule on disclosure requirements and prohibitions concerning franchising and business opportunity ventures.
Please note that The Longaberger Company is a member of the DSA with over 26,000 independent sales associates nationwide. Longaberger sales associates market distinctive hand-crafted baskets and other home decorative accessory items through in-home "shows" or parties. The typical Longaberger sales associate is female (99.9% are women), has a full- or part-time job in addition to her Longaberger business, and has either earned a college degree or has received some post secondary training.
Generally speaking, direct sales is a modest income opportunity which provides the freedom and flexibility to start a business for very little initial investment. Although the majority of our sales associates earn less than $5,000 per year through their Longaberger business, direct sales provides thousands of Americans with an excellent opportunity to earn extra money for a specific goal or to supplement an increasingly tight family budget. Direct sellers have the independence and flexibility to determine their future based upon their individual interests and willingness to work hard.
Specifically, I would like to reiterate a point which DSA made in written comments: the need to increase the $500 threshold. Nearly 20 years have passed since the FTC established the $500 threshold. Our company respectfully requests that the Commission increase that amount to a more reasonable threshold level. DSA made the case very well when asking for the consideration of a $1,000 threshold by stating that the original $500 level set in 1978 would be nearly $1,200 today when factoring in the effect of inflation over the last 17 years. We support a threshold as part of a business opportunity rule but feel that $1,000 is much more reasonable today.
Thank you very much for considering our position regarding this important issue. Should you or your staff have any questions, please do not hesitate to contact me.
Michael L. Bennett