|Received:||6/27/2006 12:16:12 PM|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:The intent of this proposed rule is honorable. However, the form is flawed and is not consistent with similar business opportunities that I have been associated with. I have been a Quixtar IBO for about 6 years. When I was introduced to this business, I was given NO promises, just opportunity. I do the same with all that I share the opportunity with. Although this business does provide unlimited income opportunity, I tell prospects that it does require work. I also tell them that many people have tried this opportunity and quit without getting the results that they had hoped for. This is no different than the commonly referred to statistic that 80% of new businesses fail in the first 5 years. I tell people what we provide is opportunity not guarantees, that I will "run through brick walls" to help them succeed, but it is still up to them. If this proposed rule were imposed in the real estate, insurance business, or securities industries, where the turnover is very similar to our industry, it would cripple those industries. I was an executive in the life insurance industry for 6 years. If we would have been required to adhere to this proposal, it would have imposed tremendous cost increases on recruiting, ultimately raising life insurance premiums. A few examples- If I were an independent agency owner and had to provide an agent reference, I would have presented the reference with an agent prospect whom HE could prospect. Certainly, anyone interested in insurance (or this industry) should have access to accurate information prior to making a decision, but this is not the way to do it. When I have a Quixtar prospect, I bring them to a meeting where they can talk to other IBO's to get accurate information without risking a "prospect raid". Currently, new IBO's in our business spend about $75 to get registered, and we offer business support materials to educate them. Typically, these materials run $90/month. This compares to someone in the insurance or real estate industry, who must spend $500-$2500/year in educational materials, licensing, and seminars. We disclose all costs upfront. Regarding litigation, if I were considering recruiting a new life insurance agent, and I had to disclose all the lawsuits filed against any agent or employee, I would have never recruited anyone. Does Century 21 disclose fraudulent agent cases to their new recruits or customers prior to a sale? Does the FTC disclose unfair hiring lawsuits to potential employees in the interview? Let the same standard be applied here. As far as earnings go, we disclose the opportunity, but don't share the income. Income is a personal detail. Should an attorney who works on contingency be required to disclose their income to a potential new hire? What if he made a lot 1 year, took a year off and made nothing the next. How accurate would the income of either year be to a potential new hire. Does his income reflect in any way what the new hire will earn, or is it up to the new hire to determine what level of income works for him/her? Currently, it is disclosed that the "average" IBO makes $115/month. Our new recruits are not given "pie in the sky" numbers. As far as a waiting list is concerned, I agree that a refund period should be available. However, a 7 day delay to register is overboard. Why not allow a 3 day refund period, similar to a closing of real estate that we have in Wisconsin. If after 3 days the recruit changes their mind they get a full refund. We currently give refunds for business support materials if not satisfied. In today's busy society, it is difficult enough to get a common meeting day for 2 people, however the proposed rule would mean a minimum of 2 visits just to register the new IBO. A 3 day refund period would work much better. Thank you for the opportunity to respond.