| Comment Number: | 522418-06109 |
| Received: | 7/5/2006 1:49:08 PM |
| Organization: | Northstar |
| Commenter: | Nancy Burianek |
| State: | CO |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
It is our understanding that the FTC is wanting to ensure that every prospect considering a business opportunity has all the information he or she needs to make an educated decision. In that respect, we applaud this goal. We also understand that the FTC's experience has been based on fraudulent schemes and high-cost franchises. However, some of the provisions contained in this new ruling would place a crippling burden to our Quixtar independent business without benefitting our Quixtar prospects. This is the area of our concern. Quixtar, under the parent company Alticor, has gone above and beyond the expectations to ensure that all independent business owners and prospects have complete and accurate information about our opportunity. We are all in favor of reasonable and responsible rules which help manage the expectations of prospects, however, we do not want to be penalized for the unprofessional and/or fraudulent activity of others. As business owners, we have always been encouraged to be transparent and honest with any prospecting which creates a solid foundation for our business. We have also been made aware of those not following the rules and intent of this business and what the consequences will be if continued. We are sure you are not trying to outlaw the Quixtar business opportunity or any other legitimate business opportunity. The FTC proposal targets fraudulent work-at-home schemes, pyramid schemes, and other "get-rich-quick" scams that disguise themselves as a genuine business opportunity. That has our full support and encouragement. A well-designed FTC rule will shut down the bogus businesses while at the same time allowing our Quixtar business, and the Quixtar businesses of others, to continue. We want to be able to build our own successful independent business without putting unnecessary constraints and restrictions on us. First, we would encourage you to eliminate the waiting period, at least for opportunities like Quixtar where a prospect can get his money back if not satisfied. We would also like to see the elimination of the 10 references. This would infringe on the privacy of every independent business owner whose name, address, and phone number was provided to prospects. A third problem area is the requirement to give every prospect a list of all lawsuits, arbitrations etc. for the past 10 years regardless of whether or not the accusation was true. This only opens up Quixtar and other legitimate companies to false accusations. Many dishonest companies would do whatever they could to discredit this solid and honest business. Our world today is creating a guilty verdict first and then there seems to be no retractions when a person, group etc. is found innocent. The solution here would be to eliminate the requirement to disclose past litigation. Another problem is making a disclosure for every income claim. This seems to be way out of line. If disclosures are needed, require something simple, standard, and easily understood. We use the disclaimer that an "average monthly gross icome for an "active" IBO is $___. That amount is provided by the company. Our final problem with this rule is that we would be required to provide prospects with personal financial documents to back up any income claim. We have no problem possessing a substantiation, but we shouldn't be required to disclose it except when required by the FTC and similar state agencies in an investigation. Finally, we believe that providing every prospect with important information about prior experiences is good for Quixtar and the entire direct selling industry. However, there needs to be a less burdensome way to accomplish this goal than the manner set forth in the proposed FTC rule. We hope you will look carefully at the problems arising for the legitimate businesses and the troublesome provisions which are in the current rule. Thank you, Nancy, Jon Burianek