| Comment Number: | 522418-00525 |
| Received: | 6/2/2006 12:34:54 PM |
| Organization: | Shaklee |
| Commenter: | E. Tardy |
| State: | TX |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
It is clear that if the following requirements are enacted it would place a serious and undue burden upon me as a Shaklee Distributor, and would unnecessarily complicate the process of sponsoring. I believe this Rule, if enacted, could have a negative impact on my business as well as all direct selling businesses. Therefore, I am requesting that the following not be passed. Background: Recently, the Federal Trade Commission ("FTC") has published a proposed Business Opportunity Rule that would apply to all business opportunities, including vending machine sales, medical billing, and direct sales opportunities, regardless of the entry fee. There are a number of aspects of the Rule as proposed that could have a negative impact on recruiting by placing an undue burden on the Company, you and your downlines. A significant burden in the proposed Rule is the potential requirement that each prospective distributor be given a disclosure document in the form prescribed by the FTC, containing, among other information: The name, city, state, and telephone number of at least the 10 purchasers within the past three years who are located nearest to the prospective purchaser's location; The total number of purchasers of the opportunity during the past two years, and the total number of oral or written cancellation requests during the same two-year period; and All legal actions during the past 10 years alleging misrepresentation, fraud, securities law violations, or unfair or deceptive practices against the Company, any of its officers, directors or any employees involved in sales of the opportunity, regardless of whether the Company or the officers, directors or employees were found not guilty or not liable. The biggest obstacle is probably that, under the proposed Rule, the disclosure document must be presented to the potential recruit at least seven calendar days before the recruit may sign an application or make a payment. A separate disclosure document is required if ANY earnings claim is made. Each application, disclosure statement, disclosure receipt and oral or written request for cancellation would have to be maintained by you for three years. Thank you for your time, E. Tardy