| Comment Number: | 522418-05615 |
| Received: | 7/2/2006 4:32:17 PM |
| Organization: | USANA Health Sciences--Independent Associate |
| Commenter: | Peggy Daly |
| State: | CA |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Dear Sir or Madam: I am writing this letter because I am concerned that the FTC’s proposed Business Opportunity Rule (R511993) as presently written could greatly hinder or even ruin my independent USANA Health Sciences business—a successful small business to which I have dedicated a lot of time and energy to build. I understand and appreciate the FTC’s responsibility to protect the public from “unfair and deceptive acts or practices,” but if adopted, this rule could have a negative impact on my industry and place additional burdens on me as a direct seller in order to comply with federal law. I am opposed to the confusing and burdensome seven-day waiting period to enroll new independent USANA Associates. USANA’s sales kit only costs $49.95 (or $19.95 for the electronic version). There is no seven-day waiting period for people to buy high-ticket items such as TVs and cars. This waiting period gives the impression that there might be something wrong with USANA’s business plan. This seven-day waiting period is unnecessary, because USANA already has a 100% buyback policy for all products including sales kits purchased by a salesperson within the initial 30 days and a 90% buyback for products purchased within the last twelve months. The proposed rule also calls for the release of any information regarding lawsuits involving misrepresentation, or unfair or deceptive practices. It does not matter if the company was found innocent. In this litigious environment, anyone or any company can be sued for almost any reason. It does not make sense to me that I would have to disclose these lawsuits, unless USANA is found guilty. Otherwise, USANA and my independent USANA business are put at an unfair advantage because potential independent USANA Associates are misled to believe that USANA is guilty of wrong-doing even though USANA may have done NOTHING wrong. Finally, the proposed rule requires the company to disclose to each prospective independent USANA Associate the names and contact information of a minimum of 10 previously enrolled independent USANA Associates who live nearest to the prospective Associate. In this day of identity theft, I am very uncomfortable giving out the personal information of individuals (without their approval) to strangers. Also, sharing this type of information with business prospects who may be involved in other network marketing businesses creates an opportunity for those prospects to recruit enrolled USANA Associates away from the USANA opportunity. USANA considers the names of its independent Associates to be confidential and trade secret information, and a requirement to disclose this information for this purpose makes it very difficult for USANA to protect its trade secret information and this could damage the company’s business. Moreover, following this provision will make recruiting prospects for the USANA opportunity a very slow and tedious process. I also think the following sentence required by the proposed Rule will prevent many people from wanting to sign up as an independent USANA Associate, “If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers.” People are very concerned about the privacy of their personal information and the potential for identity theft. They will be reluctant to share their personal information with individuals they may have never met. I began taking USANA products two years ago and my health has benefited tremendously from them. I became a USANA Associate because I was already sharing the USANA products with others and though I might as well earn some money for doing so. I appreciate the work of the FTC to protect consumers, but I believe this proposed new rule has many unintended consequences and that there are less burdensome alternatives available in achieving its goals. Thank you for your time in considering my comments.