Comment Number: 522418-09582
Received: 7/14/2006 7:10:39 PM
Organization:
Commenter: Larry Evans
State: IN
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

This is to express strong opposition to the proposed Business Opportunity Rule R51193. This rule as proposed would make it very difficult for me to operate my business as a Shaklee Independent Distributor. Especially the section concerning the seven day waiting period to enroll new distributors. Most of the people who sign up with Shaklee are consumers only of the products. If later on they want to build a business, they just supply Shaklee with their SS# or Tax ID #. No additional kit, fee, or application is required. The Shaklee member kit costs just $19.95. This is far less than most consumer purchases none of which require a waiting period. This proposed waiting period is unnecessary because Shaklee 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 nearest to the prospective purchaser. With the threat of identity theft, I do not want to give out personal information of other Shaklee distributors, without their knowledge or consent. 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 distributors as they are concerned about their privacy and identity theft. Providing the 10 references also could damage the businesses of Shaklee distributors. Lower ranking distributors often are involved in more than 1 direct selling company. Providing a list to a potential recruit, who may already be a distributor for a competing company, may be an invitation to solicit existing distributors for their company. The 10 reference requirement is an administrative burden. To obtian the list of 10 prior purchasers, I will need to provide Shaklee with the prospective distributor's address, and wait to receive the list of the 10 nearest dist. who became distributors within the last 3 years. Each prospective recruit will need a customized disclosure statement. This will result in a delay far longer than seven calendar days before anyone can sign an app. Many people enter direct selling to earn extra income for a specific goal such as for holiday purchases or family vacation. The wait which this proposed rule creates may make that goal unattainable. The proposed rule calls for the release of any information regarding lawsuits that allege misrepresentation, or unfiar 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 it's officers or sales department employees had been found guilty or liable. Fifty year old companies such as Shaklee would be at a disadvantage compared to new 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 approximately 1 year. I depend on my Shaklee income to supplement our budget. Thank you for considering my comments.