|Received:||6/1/2006 6:44:32 PM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:I strongly oppose the proposed Business Opportunity Rule R511993. One of the most burdensome sections of the proposal is the 7-day waiting period to enroll new distributors. Most of the people who sign an application do so to purchase Shaklee products as consumers at a wholesale price immediately. If they later wish to build a business, there is no additional fee and the initial membership fee is only $19.95 so you can see there is no fraud intended. Since Shaklee Corporation already offers a return policy guarantee there is no need for a waiting period. The proposed rule requires disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. There are many problems with this proposed requirement. I am uncomfortable giving out personal information to strangers of other Shaklee members without their consent. I understand those who sign up after the rule takes effect would be told in writing "If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers." I believe this would dissuade new people from signing up as distributors as they are concerned not only about identity theft, but also about their privacy. People today are understandably reluctant to share their personal information with individuals they have never met. Providing ten references also could damage businesses of numerous Shaklee distributors. Lower ranking distributors often are involved in more than one direct selling company. Providing a list to a potential recruit, who may already be a distributor for a competing direct selling company, may be an invitation to solicit existing distributors for such other opportunity. The ten reference requirement also is an administrative burden. In order to obtain the list of 10 prior purchasers, I will need to provide Shaklee with the prospective distributor's address, and then wait to receive the list of the 10 nearest distributors who became distributors within the past 3 years. Each prospective recruit will need a customized disclosure statement. This will result in a delay far longer than seven days before any potential recruit can sign an application. In view of the fact that many people enter direct selling part-time to earn extra income for a specific goal, such as holiday purchases or a family vacation, the long wait by the proposed rule may make the goal unattainable. The proposed rule calls for the release of information regarding lawsuits that allege misrepresentation, or unfair or deceptive practices over a ten-year period. It does not matter if the company was found innocent or not liable. Today, almost all business lawsuits contain claims of misrepresentation or unfair competition. I should not have to disclose these lawsuits unless Shaklee Corporation has been found guilty or liable. Otherwise, fifty-year old companies such as Shaklee and their distributors would be placed at a disadvantage compared to start-up direct selling companies, which may not yet have experienced litigation but which are far more likely to have legal issues surrounding their opportunities. This is a most unfair request. I have been a Shaklee Distributor for 25 years. I became a distributor because I used the products and received great results for a serious health problem. Your now proposed rule would have scared me away. Now Shaklee is my sole source of income. Surely there are less burdensome alternatives to help the agency achieve its goals.