| Comment Number: | 522418-07729 |
| Received: | 7/11/2006 3:46:04 PM |
| Organization: | Xango Independent Distributor |
| Commenter: | Suzanne Parker |
| State: | OH |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
RE: Business Opportunity Rule, R511993 To whom it may concern: I am writing because I am concerned about the proposed Business Opportunity Rule R511993. I believe that in its presented form, it would adversely affect the Network Marketing Industry as a whole, and prevent me from continuing as a Xango distributor. In fact in the last two weeks I have been told by two new distributors that they are considering dropping their distributorship because of the negative effect this ruling would have in starting a new business. My husband and I previously owned a service business that did $6 million in sales a year. We sold it 6 years ago to a multibillion dollar company and retired at 45. We were introduced to Network Marketing 3 years ago and fell in love with the business model. It democratizes business and the ability to create wealth. We have watched many in our company get out of debt, eliminate the use of social services and welfare, enable single parents to work from home and have more time with their children and contribute both time and money to their communities and charity. In fact charitable involvement is built into our Xango businesses. I take issue with 5 disclosure requirements: Seven day waiting period, List of nearest references, Earnings claim statement, Legal actions, Cancellations and refunds. But I will address only two in this letter. (1) The seven day waiting period to enroll a new distributor. This waiting period will certainly inconvenience and “chill” enthusiastic individuals anxious to participate in the XanGo business opportunity. It will create an air of suspicion among prospects when told that the FTC requires such a waiting period. This will also create a tremendous inconvenience when recruiting on the road. It suggests a level of risk that simply doesn’t exist with XanGo and many other direct selling companies. XanGo requires a very minimal up-front financial investment, only $35 and XanGo has a generous buyback policy which presents little or no risk. Under this waiting period requirement, I will need to keep very detailed records. I am a small home business and this burden will hurt or destroy my business by adding an additional burden of administrative expense in that I would have to hire employees to help maintain these records. (2)The proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. Personally, as a woman, I would never want to give out my personal contact information for this could invite criminal activity or sexual assault. Logistically speaking, because you don’t know where a prospective purchaser lives before meeting him, it will be difficult to have this information available to disclose until a later time. This will further prolong the seven day waiting period and affect cash flow and income. From a privacy perspective, in this day of identity theft, all distributors will have to agree to have their names, addresses and telephone numbers disclosed to prospective purchasers for possible contacting. Disclosure of this information will not be limited to bona fide purchasers, but will be given to anyone who might be interested, including competitors. The reference information could then be used for any purpose. This is unacceptable! In the end the rule must bind the FTC to take direct enforcement action on sexual and racial attacks with a special unit assigned to monitor actions related to the disclosure forms, releasing distributors from any liability related to these disclosures. In conclusion, I appreciate the FTC wanting to protect the public from crooks. But please don’t throw the baby out with the bath water! Small business is the backbone of this country. Please don’t destroy or punish an industry that does so much good for the public in goods/services and contributes so solidly to the economic welfare of this country. Sincerely, Suzanne Parker