Business Opportunity Rule #522418-12502

Submission Number:
522418-12502
Commenter:
Richard Yust
State:
KS
Initiative Name:
Business Opportunity Rule
My wife and I have been IBO's (Independent Business Owner) since September 1, 1999. We have been able to enjoy monetary benefits and intangible benefits of social interaction with other business associates. For several years, I had my own accounting practice (I am a CPA). There were times when the income from our Independent Business powered by Quixtar helped make ends meet. Our business has grown to the level that I now do not have to offer accounting services as much as in the past. This allows me to spend time with my family of four sons, who are all involved in their own Quixtar powered businesses. As a CPA and as a management consultant, I have had many opportunities to assess new business ideas. Quixtar provided more than enough information to evaluate the opportunity. Further they continue to provide far more pertinent information than many direct selling companies now being advertised. The requirement for a seven day waiting period, it not necessary and is more extreme than other opportunities I have evaluated. Quixtar offers a full refund, if someone changes their mind. And, in fact we have had this occur in our organization and the parties involved were more than satisfied with Quixtar's refund policy. The requirement for references is also not necessary. Any interested party can check on Quixtar on the internet, industry associations and "better business bureaus". I addition, the only persons a prospects needs to evaluate are those who will be helping them to build their business. Others not involved have no vested interest in helping. By "sending" my prospect to another non-related business owner, it subjects the prospect to possible pressures to "join" their business. I would not send a potential client to another CPA as a reference. I would introduce them to other clients. In Quixtar's case, I would introduce a propect to their Business Support Team, i.e. line of sponsorship, and do their own evaluation. Every potential business owner has to meet the people they will be working with and decide if they want to be involved. In our business, every prospect has that opportunity. Regarding litigation disclosure, we should not be under any more demanding requirements than is required by any other franchise opportunity. To divulge personal litigation, over and above what is public information, that is not related to this business would be a gross violation of privacy. We have no problem with financial disclosure of what an IBO can earn. However, the average amount of efforts and the nature of the work required for certain levels of financial achievement should also be provided. It should not just be an "average IBO". It should be a "working average IBO". In any business, work = money. To simply say "average" and not define that as to the work necessary is extremely misleading. We do not want our business to be considered a "get-rich-scheme", therefore, the amount of reasonable effort should be disclosed. In summary, we do not have a problem with disclosure of the nature of our business, the risks involved, and the potential for success. We do have a problem with required disclosure that makes the opportunity confusing and misleading. We believe that the requirements set forth by the FTC would create confusion and would be misleading to a prospective business owner. Quixtar's and our publications and policy of refunding the costs incurred by any person who is dissatisfied is better than any regulation.