Comment Number: 522418-01001
Received: 6/5/2006 9:18:02 PM
Organization:
Commenter: Sue Glenn
State: MS
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

Federal Trade Commission/Office of the Secretary, Room H-135 (Annex W) 600 Pennsylvania Avenue, NW Washington, DC 20580 Re: Business Opportunity Rule, R511993 Dear Sir or Madam: I am writing to express strong opposition to the proposed Business Opportunity Rule R511993. I understand that the Federal Trade Commission must protect the public from "unfair and deceptive acts or practices," but the rule as proposed would make it impossible to operate responsibly as a Shaklee business owner. An utterly ridiculous section of the proposed rule is the seven-day waiting period to enroll new distributors. Most of the people who sign a Shaklee application simply wish to purchase and consume the products themselves. If they later wish to build a business, they merely supply Shaklee Corporation with their Social Security Number or Tax Identification Number. No additional kit, fee or application is required. The Shaklee Member Kit costs only $19.95. This is far less than most consumer purchases ranging from TVs to assorted household appliances, none of which require a waiting period. The waiting period is also unnecessary in that Shaklee Corporation offers a 100% satisfaction guarantee plus a 90% buyback policy for products, including the Member Kit, purchased by a distributor within the last two years. The invasive rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. In this day of identity theft, I am uncomfortable giving out the personal information of other Shaklee distributors without their knowledge or consent. I understand that 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." This would dissuade new people from signing up as distributors as they are alarmed about identity theft and carefully guard their privacy. Providing the 10 references would potentially cripple the businesses of 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, would be an open invitation to solicit existing distributors for their other opportunity. The 10 reference requirement is an administrative nightmare. To obtain the list of 10 prior purchasers, one would have to provide Shaklee Corporation with the prospective distributor's address, then wait to receive the list of the 10 nearest distributors who became distributors within the past three years. Each prospective recruit would then need a customized disclosure statement, resulting in a far longer delay than just the seven calendar days before signing the application. Many people enter direct selling to earn extra income for a specific goal, such as a holiday purchase or family vacation. The "wait" could render the goal virtually unattainable. The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation, or unfair or deceptive practices over a 10-year period. It does not matter if the company was found innocent or not liable. It makes no sense to disclose lawsuits unless Shaklee Corporation, its officers, directors, or sales department employees had been found guilty or liable. Fifty-year old companies such as Shaklee would be at a distinct disadvantage compared to start-up companies, which may not yet have experienced litigation but are far more likely to have legal issues surrounding their opportunities. I have been a Shaklee Distributor for more than 15 years. Originally, I became one because I love the Company's nutritional products and wanted to earn income working from home. Now I depend upon this income for my livelihood. Thank you for reconsidering then hopefully dismissing this damaging proposal. Respectfully yours,