Comment Number: 522418-09595
Received: 7/14/2006 7:36:03 PM
Organization:
Commenter: Gallagher
State: CA
Subject: Business Opportunity Rule
Title: Notice of Proposed Rulemaking
CFR Citation: 16 CFR Part 437
No Attachments

Comments:

Regarding the proposed ruling, please consider the following: People are presented with a vast number of get rich quick money making opportunities on a daily basis. They are advertised on the radio, in the newspaper and on TV. Most are legitimate business systems or money making methods. Of course, they are made to look easier then perhaps they really are, but everything is. People are sold on the idea of getting rich by doing next to nothing. But all businesses take effort, all money making systems require time and energy spent to learn them. Personal responsibility is what is lacking. If only 5 out of every hundred who try an opportunity succeed, does that mean there is something wrong with the system? Or does it mean that people who want to make money without effort tend to quit when they find out that there is effort required? To hamstring a legitimate business or money making opportunity by over burdening it with measures designed to eliminate all but the completely 100% foolproof zero effort, zero risk, high reward systems will eliminate all opportunities. Because there aren't any that meet that qualification and there never will be. Is a business opportunity legitimate just because it can boast 4000 locations across the country? It may cost over $100,000 to just open the doors. I know someone, a successful contractor, who wanted to get into a new business venture. Two years and tons of effort later, he has nothing to show for it. He is now brokering mortgages. Should that franchise, and all other franchises now be buried in regulations that would make it all but impossible for new people to make a go of it? Of course not. He would have been successful if he had done a little more due diligence on opening his second location. When that location didn't work out, the fine print in the franchise agreement bit him and he lost both locations. At the same time, I know several people who have succeeded with the same franchise opportunity. Governments should set up rules regarding what constitutes fraud and leave it at that. Trying to protect people from themselves is impossible and counterproductive. Sometimes, the "law of unintended consequences" is most egregious in government. The Securities and Exchange Act of 1934 is an example. By restricting select investments to "qualified investors", the government added a tremendous hurdle to be overcome by the average person wishing to avail themselves of the most profitable investment opportunities. Does that mean that all qualified investors are able to avoid losses? No, but it does mean that most people don't have access to investments that could make them wealthy. This is where the saying "it takes money to make money" is most true. By providing opportunities to people who may or may not meet the definition of a qualified investor, direct marketing businesses serve a much needed purpose. Properly constructed marketing plans allow for all people, regardless of when they start, to have as level a playing field as there can be. We share equal rights, not equal abilities. So what someone does on that level playing field is up to them. Regarding some of the specific points of the proposal: The 7 day waiting period. This should be eliminated, all anyone needs is a reasonable money back if not satisfied guaranty. A list of 10 local references. This should also be eliminated. Going back to my earlier point about access to opportunity. What if someone came up with the "perfect" business opportunity, how could they get anyone to join up, if they didn't already have a group of satisfied references? Don't legislate a Catch-22. Provide a list of all lawsuits, claims, financial documentation, etc. This is ridiculous in an already overly litigious country where you have people suing because they look like celebrities. Anyone can sue for any reason, that doesn't make it legitimate and should be eliminated. Please consider these points, thank you.