| Comment Number: | 522418-05457 |
| Received: | 7/1/2006 11:22:18 AM |
| Organization: | Quixtar |
| Commenter: | Ekkehard Koch |
| State: | NM |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
I have been a Quixtar IBO since September 1, 1999. I have achieved the 21% level multiple times. Our next goal is the 25% level. When I started I received the Quixtar Independent Business Ownership Plan (SA-4400), which provided a great source of information. I use the Quixtar SA-4400 with every potential Independent Business Owner (IBO). By reviewing the information in the SA-4400 it becomes very clear that this is a business not a get rich quick plan. Success in our business requires effort. A new IBO spends $200 to get started and a new IBO can get all their startup investment back if they are not satisfied. I applaud your effort to ensure that consumers have all the information to make a good decision about participating in a business opportunity. I ask you to eliminate the following from your proposal since they do impose crippling burdens on IBOs and do not protect new potential IBOs. 1. Eliminate the waiting period, at least for opportunities like Quixtar where a prospect can get his money back if not satisfied. A waiting period would become and administrative nightmare for a team of IBOs building their business. Since a new IBO can get their money back if they are not satisfied it would add no extra protection for a new potential IBO. 2. Eliminate the requirement to provide 10 references. The new potential IBOs could register with any of the references, which would bring on additional conflicts. The privacy of IBOs could be compromised due to the requirements to give out personal information like address, phone number etc. 3. Eliminate the requirement to disclose past litigation. The proposal does not clearly specify who a seller is. This means that IBOs may have to list all litigation involving Quixtar itself as well as the entire IBO force across the country. This would also not be limited to cases found against the seller but even filed cases with no merit. As such this requirement could easily lead to deception of new potential IBOs. 4. If disclosures are needed, require a simple, standard, easily understood disclosure such as "average monthly gross income for 'active' IBOs." The information supplied in the SA-4400 is standard and clear. The additional details required by the proposed rule are not standard or clear and could easily lead to deceptive practices. 5. IBOs should possess substantiation for any claim but should not be required to disclose it except when required by the FTC and similar state agencies in an agency investigation. Doing otherwise would violate their privacy.