| Comment Number: | 522418-00051 |
| Received: | 5/16/2006 9:26:42 PM |
| Organization: | |
| Commenter: | Gino Volta |
| State: | OR |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
May 16, 2006 Federal Trade Commission/Office of the Secretary, Room H-135 (Annex W) Re: Business Opportunity Rule, R511993 600 Pennsylvania Avenue, NW Washington, DC 20580 RE: Business Opportunity Rule, R511993 Dear Sir/Madam, I am writing in response to the proposed New Business Opportunity Rule R511993. This rule, if not modified, will be a significant impediment and burden to the network marketing industry. This new rule, although well-intended, represents a significant burden to the free market trade in our largely decentralized economic system. While I support some of the disclosures with modification, I am opposed to a seven (7) day waiting period because it would be an excessive administrative burden and a great impediment to new business development. I support the disclosure of an average earnings income statement because it is good business practice to establish realistic expectations--BUT I oppose being forced to provide written substantiation because it is an excessive burden considering the investment of money to enter into the business is nominal. Regarding civil or criminal legal actions. We are a lawsuit-happy culture. Anyone can be sued for almost anything. I support disclosure only if the party or parties are found guilty of fraud or misrepresentation. Otherwise it should not be an issue. If they settle out of court there will be public documentation. Lastly, the rule requires the disclosure of a minimum of 10 purchasers closest to you. While it is a good practice to provide references of satisfied customers, this is a burden for small businesses and, as a requirement, it is a violation of personal confidentiality particularly if you have to choose within your geographic area. Unfortunately, requiring the release of this information can threaten the business relationship of the references who may be involved in other companies or businesses. In addition, it subjects these references to possible damaging cross-marketing by competitors. I am recommending that contact information for purchasers be available upon request, that their availability be published on company materials, and that due to the global nature of Internet-marketing, they not be limited to geographic proximity. The network marketing industry is one of the few remaining opportunities for people to earn additional income or to create a new career. Once scoffed at by investors, many network marketing companies are publicly traded on Wall Street. Warren Buffet the most successful and known businessman in modern history owns the network marketing company, Pampered Chef. The industry is also growing in popularity and contributes to the US economy. This growth should be encouraged. Sales of products and services through network marketing are estimated at more than $29 billion in 2003. I have been in network marketing since December, 2004. I have had the opportunity to market several excellent products, work from home, earn extra money for my family and meet an internet community of some very fine people. I believe that the proposed new rule exceeds what is necessary and needs significant modification. I am in support of the disclosures that should be made during the sales process, without the seven-day waiting period, and only if modified as suggested above.