Business Opportunity Rule #522418-12069

Submission Number:
William Oades
Initiative Name:
Business Opportunity Rule
Dear Folks, I am writing in response to the proposed New Business Opportunity Rule R511993. If passed, this rule would be a significant burden to the network marketing industry. The new rule, though well intended, reprresents a serious encumbrance to the free market trade that would do more harm than good to hardworking American entreprenuers. The proposed rule would require a de facto seven day waiting period to enroll new distributors. In essence, one would have to sell a person twice on the same business-even if lthe application start-up fee is as little as $19.95 to $99. While I support some of the disclosures with modification, I am opposed to a seven day waiting period because it is an excessive burden to any company and distributor who would be required to document and follow-up on the process and an impediment to new business development. The rule also calls for the release ofo any information regarding prior litigation and civil or criminal legal actions involving misrepresentaiton, or unfair or deceptive business practices, even if the distributor and/or company was found innocent. In our lawsuit-happy culture, anyone can be sued for anything almost with impunity. Regardless the outcome, you wuld have to disclose lthe tainted information and explain it to a new business associte which is patently unfair. I would support the disclosure of previous litigation of companies, executives, affiliated companies and the lilke involving fraud and misrepresentation only if the party is found guilty. If the defendant is found not guilty, the opposing parties agreed to to settle without admission of guilt or lthe case is still pending, then it should lnot be necessary to disclose this information. If lthe parties agreed to settle without admission guilt, there usually is some public document available, particularly if lit linvolves a government agency and further disclosure therefore would be unnecessary. If a case is pending, it shouldn't be commented upon. Lastly, the rule requires the disclosure of a minimum of 10 purchasers closest ot 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. Unfortunately, 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. I am recommending that contact information for purchasers be available upon request, that their availability be published on company materials, and that due to Internet-marketing, the not be limited to geographic proximity. The network marketing industry is on of tlhe few remaining opportunities for people to leverage their time and limited resources to earn additinal income or to create a new career. Once scoffed at by investors, many network-marketing companies are publicly traded on Wall Street, including Herbalife, Nu Skin, Pre-Paid Legal Services, USANA among others. Network marketing is being used by blue-chip companies including Citigroup, MCI and IBM. Top business management leaders and New York Times best selling authors Robert Kiyosaki, Paul Zane Pilsner, and Steve Covey have endorsed network marketing. The industry is also growing in popularity and contributes to the US economy. This growth should be encouraged. Lastly, the network marketing indusstry contributes to our growoing economy. Sales of products and services through network marketing are estimated at more that $29 billion in 2003. I chose to get involved with network marketing last lyear, after 33 years of corporate or self employment. I llike the opportunity I have in the health and wellness field. I don't want the government making these propossed changes to the way I go to work-which is extremely honorable. Thank you. Bill Oades