|Received:||6/3/2006 5:41:48 PM|
|Organization:||Shaklee Independent Distributor|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:I strongly oppose the proposed Business Opp. Rule R511993. I believe the rule as proposed would make it very difficult for me to operate my business as a Shaklee Independent Distributor. One of the most burdensome sections of the proposed rule is the 7-day waiting period to enroll new distributors. Most of the people who sign an application do so to purchase Shaklee products at a wholesale price, in other words, solely as consumers of the products. If they later wish to build a business, all they must do is supply Shaklee Corp. with their SSN or Tax ID Number. There is no additional kit, fee or application required. The Shaklee Member Kit costs only $19.95. This is far less than many, if not most, consumer purchases, none of which require a seven-day waiting period. In addition, the seven-day waiting period is unnecessary in that Shaklee Corporation already has a 90% buyback policy for products, including the Member Kit, purchased by a distributor within the last two years. The proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. There are many problems with this proposed requirement. In this day of identity theft, I am uncomfortable giving out the personal information of other Shaklee distributors, without their knowledge or consent, to strangers. I understand that those who sign up after the rule takes effect would be told in writing their contact information can be disclosed to other buyers. I believe that 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 reluctant to share their personal information with individuals they may never have met. Providing the ten references also could damage the 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 Corp. 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 7 calendar 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 which the proposed rule will entail may make the goal unattainable. The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation or unfair or deceptive practices over a 10-yr period regardless if the company was found not liable. Today almost all business lawsuits contain claims of misrepresentation or unfair competition. It does not make sense to me that I would have to disclose these lawsuits unless Shaklee Corp. or its officers, directors or sales department employees, had been found guilty or liable. Otherwise, 50-year old companies such as Shaklee Corp. 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. I've been a Shaklee distributor for over 12 yrs. I trust Shaklee and their products and my family enjoys the extra income I'm able to make. I believe this proposed new rule has many unintended consequences for direct sellers and that there are less burdensome alternatives available to the agency to achieve its goals. Thank you.