| Comment Number: | 522418-06789 |
| Received: | 7/7/2006 1:54:53 PM |
| Organization: | Independent Business owner powered by Quixtar |
| Commenter: | George Medley |
| State: | AL |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
While I applaud the FTC's effort to attack illegitimate "scams" under the guise of legitimate business opportunities, and I applaud the desire to give full disclosure of the mechanics and examples of possible results with any new prospect, I do have some concerns. These concerns affect mainly the new Independent Business Owner (IBO) from growing his business quickly. Those who have been in the industry longer, and thus have established businesses will not be as affected (although they will feel some of the affect) and thus it may hurt the new person you are trying to protect. The seven day waiting period seems awfully long. While you may say, "it's only a week" understand that we are dealing with people. While they may still be interested after a week, they have lost momentum, and then any prosepects of this new person must wait a week, and then any of those prospects must wait a week, etc. It can severely retard the process, causing frustration and even lost income for a new IBO. Further it may create a lost sense of legitimacy in the prospects mind regardless of how legitimate the company actually is. The reference list may also be harmful for the new IBO as, being new, they may not yet know ten new IBOs. For instance, I have recently moved, and while I was still able to work my bussiness having just move, it took me almost a month to find ten IBOs in the area. Further this practice will stop all expansion into new markets that do not yet have a business that a newly relocated IBO is in, thus it would lower competition in these markets and could create an unfair monopoly to the businesses that are already present. So where a vast opportunity may have previously lay (i.e. they are the first IBO there and so may prospect from the whole town vs they are the only IBO there and so must decide to quit because their hands are tied). These areas are mostly towns and small cities (Midland, TX for instance I believe has only a handful of IBOs at present who have a large customer base, but not as many IBOs). As far as past litigation disclosures, it may seem like a good idea, but, as with any large industry, the larger the company the larger possibility of more frivilous lawsuits occurring. When dealing with people, no matter how many times or ways one tells them the business will require time and work to develop, people will put the blinders on and expect to get rich quick with no effort. This can cause not only hurt feelings but legal complaints that have no basis. Finally, in reference to full disclosure of financial records, many times this is not dealing only with business accounts, but individual personal financial records. This could consitute a violation of privacy rights, not only of individual IBOs, but also partial disclosure of personal financial records of IBOs associated with his business. Because this is a Networking industry, there may be many structures of a business that lead to the same income, and several incomes from only slightly different structures. While I agree that conservative estimates may be needed, disclosing personal financial records and requiring IBOs new to the industry to map out the complicated webbing structure required to reach specific levels of income puts undo pressure on the new guy, just starting out, wanting to make a little more money or get more time. Once again, I loudly applaud the FTC's efforts to weed out schemes and scams, and am in favor of diclosure to an extent, I believe that the talented individuals at the FTC can make a better set of rules for regulating this growing business. Remember that some of these proposed guidelines may end up hurting the new prospet more than helping him or her by causing slower business growth, putting undo pressure on them to find out all the complications of the business, possibly forcing her or him to quit before she or he is ready, and it may lead to a violation of personal privacy.