| Comment Number: | 522418-02966 |
| Received: | 6/16/2006 6:43:19 PM |
| Organization: | Mary Kay & Xango |
| Commenter: | Crewe |
| State: | MI |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
To Whom It May Concern, I am writing because I have been involved in the direct selling industry for 12 years full time, and am very concerned about the proposed "Business Opportunity Rule". My full time income for the last 11 years has come from Direct Sales. The two companies which I represent do not have a large upfront investment cost, so I believe that the provisions of this rule, while well intentioned to protect the public from fraud, are complete overkill for any businesses in which the upfront cost is less than $500. This rule would in fact, cause so much extra paperwork, that it would severely hamper current direct sales distributors, and severely discourage new propective distributors from joining direct selling companies. The seven day waiting period casts direct selling companies in a bad light, and involves again lots of record keeping, administrative issues, and delays. The average prospect will wonder - if this is a legitimate company - why do they have to wait 7 days to get started? The $500 business threshhold amount should not be eliminated. Since the average starting cost for a direct selling company is around $135, I don't think that legislation which is aimed at businesses requiring a large investment pertains to the majority of direct selling companies. Those involved in the Direct Selling industry should also not have to report all litigation they have been involved in. This is an unfair invasion of their privacy, since most litigation may not even involved their business affairs. It is also very impractical to have to identify the "10 nearest existing sales people" to a new person who has joined your group. The Direct Selling companies would have to track that information and make it available to us. We as Distributors have no way of knowing who the "10 nearest existing sales people" are in an area, since we can sponsor people all over the United States without territories. Identifying these 10 nearest people could also be an enormous invasion of their privacy. Perhaps they don't want everyone who has just signed up for that business calling them or knowing their personal information. I do understand that there are fraudulent groups out there, but the provisions of this "Business Opportunity Rule" unfairly target legitimate direct selling companies as well. I as a small business owner, cannot afford more paperwork and delays in my businesses. This type of legislation will drive many good people out of legitimate, direct selling companies, as well as discouraging good people from joining direct selling companies. This type of legislation should only be aimed at business opportunities where there is more upfront investment (above $500) and therefore more risk involved. Thanks for your time and attention, Sincerely, Crewe