| Comment Number: | 522418-12547 |
| Received: | 7/17/2006 10:43:57 PM |
| Organization: | |
| Commenter: | Dorothy Kemper |
| State: | TX |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
July 17, 2006 Federal Trade Commission/Office of the Secretary, Room H-135 (Annex W) Re: Business Opportunity Rule, R511993 600 Pennsylvania Avenue, NW Washington, DC 20580 RE: Business Opportunity Rule, R511993 Dear Sir: We are writing in response to the proposed New Business Opportunity Rule R511993, which, if not modified, we believe will be a significant burden to network marketing. This new rule represents a significant burden to the free market trade. The proposed rule would require a seven-day waiting period to enroll new distributors. While we support some of the disclosures, with modifications, we are opposed to a seven-day waiting period because it is an excessive burden to any distributor or company which would be required to document and follow-up on the process. It would, also, be an impediment to new business development. We support the disclosure of an average earnings income statement because it is good business practice to establish realistic expectations. However, we oppose being forced to provide written substantiation because it is an excessive burden since the investment of money to enter into the business could be nominal. We would support the disclosure of previous litigation of companies, executives, affiliated companies, and the like involving fraud and misrepresentation only if the party was found guilty. Finally, the rule requires the disclosure of a minimum of ten (10) purchasers closest to you. While it is a good practice to provide references of satisfied customers, this is a burden for small businesses and, as a requirement, is a violation of personal confidentiality. Also, requiring the release of this information can threaten the business relationship of the references who may be involved in other companies or businesses. In addition, it subjects these references to cross-marketing by competitors. We are recommending that contact information for purchasers be available upon request. The network marketing industry is one of the few remaining opportunities for average people to leverage their time and limited resources to earn additional income or to create a new career. Many network marketing companies are publicly traded on Wall Street, including Herbalife, Nu Skin, Pre-Paid Legal Services, etc. Network marketing is being used by top corporations, including Citigroup, MCI, and IBM. The industry is, also, growing in popularity and contributes to the US economy. This growth should be encouraged, not discouraged. We are close to retirement with only consulting fees and income from our three year old, home-based, network marketing business to support us. It is difficult enough trying to earn a decent living without having additional burdens placed on us. We understand and value the role of the FTC mission “to stand up for America’s free market process and for its consumers, who benefit from competitive markets in which truthful information flows.” However, we believe this proposed new rule exceeds what is necessary and needs significant modification. We live in a free market economy where people have the responsibility of making informed decisions based on the best information. Again, we are against the seven-day waiting period. Thank you for considering our comments. Sincerely, Earl and Dorothy Kemper