| Comment Number: | 522418-07630 |
| Received: | 7/11/2006 12:32:01 PM |
| Organization: | A & B Distributors |
| Commenter: | Bennie Schmidt |
| State: | OK |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
July, 2006 Fed. Trad Comm/Office of the Sec. Room H135 (annexW) 600 Pennsylvania Ave. NW Washington, DC 20580 Ref:Business Opportunity Rule, R511993 Dear Sir/Madam I'm expressing my strong opposition to proposed Business Opportunity Rule R511993. I understand that the Fed. Trade Comm must protect the public from "unfair & deceptive acts or practices," but the rule as proposed would make it very difficult for me to operate my business as a Shaklee Independent Distributor. A confusing & burdensome section of the proposed rule is the seven-day waiting period to enroll new distributors. Most of the people who sign a Shaklee application are consumers of the products. If they later wish to build a business, all they must do is supply Shaklee Corporation with their SS Number or Tax Identification Number. No additional kit, fee or application is required. Our member kit is only $19.95. This is far less than most consumer purchases, from TV's to all manner of household appliances, none of which require a waiting period. This waiting period is also unnecessary in the Shaklee Corporation already has a 90% buyback policy for products, including the Member kit, purchased by a distributor within the last two years. The proposed rule requires the disclosure of a minimum of 10 prior purchasers neaest to the prospective purchaser. In this day of identity theft, I am uncomfortable giving out the personal information of other Shaklee distributors, without their knowledge or concent. I understand that those who sign up after the rule takes effect would be told in writing "If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers." This would dissuade new people from signing up as a distributor as they are concerned not only about identity theft, but also about their privacy. Providing the 10 references also could damage the businesses of Shaklee distributors. THE 10 REFERENCE REQUIREMENT is an administrative burden. To obtain the list of 10 prior purchasers, I will need to provide Shaklee Corp with the prospective distributor's address, and wait to receive the list of the 10 nearest distributors who became distributors within the past 3 years. Each prospective recruit will need a customized disclosure statement. "This will result in a delay far longer than 7 calendar days before anyone can sign an application. Many enter direct selling to earn extra income for a specific goal, such as holiday purchases or a family vacation. The wait which the proposed rule creates may make the goal unattainable. The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation, or unfair or deceptive practices over a 10 year period. It does not matter if the company was found innocent or not liable. It does not make sense to me that I would have to disclose these lawsuits unless Shaklee Corp. or its officers, dirctors or sales department employees, had been found guilty or liable. FIFTY- year old companies such as Shaklee would be at a disadvantage compared to start-up companies, which may not yet have experienced litigation but are far more likely to have legal issues surrounding their opportunities. I have been a Shaklee Distributor for more than 30 years. Originally, I joined because I love the Company's nutritional/personal care/household products and the business opportunity of working from home. Now this income is 100% of our income for livelihood. Thanks for considering my comments. Sincerely, Bennie & Annitta Schmidt dba A & B Distributors