Comment Number: 522418-09229
Received: 7/14/2006 3:42:00 AM
Organization: GlobalNet - Quixtar
Commenter: Andrea McFadden
State: CA
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

I’ve been a Quixtar IBO for over six years. When I was sponsored I was given all the information necessary to make an informed decision and was never misled with a “get-rich-quick” plan. The Quixtar opportunity was presented to me as a legitimate business opportunity and that by applying proven business principals, an income of my own determination was possible depending on my own effort; no promises were made about how much money I would make. This is how I present the opportunity; and I only use FTC/ Quixtar approved income figures when showing the compensation plan to prospects and prospects are always provided with the Quixtar disclosure forms SA 4400 and BSMAA at the time of registration (if not before). My prospects typically spend $250-$350 to start their new business; this includes: the Quixtar IBO registration fee, an introductory package of Quixtar products, a couple of business support materials so they can begin sharing the business opportunity right away, and often a ticket to the next quarterly business conference (depending on when the next conference is scheduled). It is clearly stated that only the IBO registration fee is mandatory, all the rest of the start up costs are optional, but we recommend the full package if they are serious about building a business. I’ve never had anyone ask, but if they decide to leave the business within the first 90 days, I believe Quixtar would refund their registration fee; Quixtar also guarantees refunds for any currently saleable product that the IBO does not wish to keep no matter when they decide to leave the business. I will buy back any current business support materials and conference tickets any time an IBO decides to leave the business. I believe honesty and transparency are essential to developing a large, profitable Quixtar business. I understand that the proposed rules regarding direct selling and/or network marketing businesses are designed to protect people from Ponsie schemes, get-rich quick scams and dishonest people, but I think that it can be done without penalizing the honest organizations who fully inform people before they join their business model. Specifically, a seven-day waiting period would cripple my business. In network marketing, momentum is the key. If every new person had to wait 7 days before they could begin their business, much of the early energy and enthusiasm that drives the momentum would be lost. We do not pressure or rush people into decisions; we want to make sure they are fully informed about the business model and compensation program plus that we are mutually the right fit for each other before we sign up a new IBO. So, if registration fees are refundable anyway, what purpose does the waiting period serve? Regulating full disclosure of the business model and compensation program makes more sense. We already provide references to prospects because we always have a prospect take a “second look” at the business model at a group presentation prior to registering as an IBO. This give opportunity for them to meet other IBO’s in he area, ask questions and assess for themselves what type of people they would be getting involved with. This is far more effective than providing a list of names that the prospect may or may not be comfortable in calling. Face-to-face contact provides more information even if no words are exchanged. Plus I do not want my name, address, or phone number being disseminated by someone else. I’m a single woman who lives alone; my safety is very important. I do not tell prospects where I live and I give out only my cell phone number because it cannot be traced to my address. I don’t want someone else passing out my personal information to someone I don’t know for any reason. The rest of the propose rules go beyond reasonable in the business world. Traditional businesses are not required to disclose litigation or earnings (unless they are publicly held companies), or provide financial statements to substantiate their earnings; requiring it of non-traditional businesses is unfair practice. It would make more sense for the FTC to make their own records public so prospects who chose to do their “due diligence” can readily access that information. This data base would be objective and accessible via the internet. We use only FTC approved figures on our brochures; requiring inclusion of the FTC website reference on all promotional materials would be far more effective than relying on individuals to disclose this information. Requiring disclosure of personal income is an invasion of privacy. Again, an FTC database that disclosed average income figures for varying levels of achievement in every direct selling or network marketing business would be far more effective to prospects wanting to know if claims of income were legitimate. Thank you for considering these alternatives to your proposed regulations. I believe that if you put into place the rules discussed here, the fastest growing industry of the 21st century would be greatly harmed and eventually die out. We cannot afford to do that to our economy and the dreams of many Americans.