| Comment Number: | 522418-09355 |
| Received: | 7/14/2006 12:34:01 PM |
| Organization: | El Enterprises |
| Commenter: | Larry Johnson |
| State: | MN |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Elaine and I are both artists(storytellers), social service activists, and educators. We have had a business contract with Quixtar for several years because of the low financial risk and great opportunity to fund the kind of work we do in a more stable way than looking for grants. I am a great respecter of the work done by the FTC and I'm sure this proposed rule has to do with protecting people from fraudulent startup businesses of this sort, but I would be concerned about policies that might hamper the operation of a legitimate business such as the one we work with. The 7 day waiting period? This is probably a good idea if someone is investing hundreds of thousands of dollars, but our initial investment for registration and products from the larger system is under $200. If I have a traditional business with an enormous investment, I have to go to work right away or risk losing my money. If I've invested very little money, its easy to not go to work, which is what many people do. People who aren't sure generally wait and think 7 days or more before they register to do business anyway. Why not let people who are excited go to work right away and make the rule require businesses to do something like what Quixtar already does -- i.e. I can get all of my money back, if dissatisfied, within 90 days of registration. We've done that for several people we've worked with. It works. 10 references? Why 10? Why not 3 like when a person applies for employment? My concern would be that because of the number of people who consider the possibility of this business, some of us could be spending more time giving references than building a business organization. We've been taught to tell people to go places like the Better Business Bureau for references. Why not create a listing of "references" like that and require businesses like ours to provide that information for prospective business partners? A different disclosure for every financial claim? I'm not exactly sure what that means. I know that I can take the compensation formula from Quixtar and trace back exactly where my money comes from every month, whether I've made $400 or $4,000, but for most people that's quite ponderous when they're just looking at how the business works. The main disclosure offered by Quixtar and printed on the official materials is that the average business owner makes $88 per month. The subtext for that is that a majority of people, because of the low investment and busy lives, never really go to work. When they go to work hard, they can do very well, but . . . Why not require companies to understate in some way like this, rather than run ads saying "I made $10,000 last month, etc." implying that you can too. Maybe you can, but most won't. Finally, listing all lawsuits? This feels a little bit like guilty until proven innocent. Any company thats been around for a while is going to have some, but that doesn't mean they're bad. A new company may not have any to list, but they could be deliberately fraudulent. I'm not sure how to deal with this, but it deserves some thinking. Larry Johnson