| Comment Number: | 522418-04358 |
| Received: | 6/26/2006 5:09:04 PM |
| Organization: | Quixtar |
| Commenter: | Alexi Brod |
| State: | IA |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Thank you for your time in reading and considering my opinion. I know I can trust the FTC to make informed, fair, and rational decisions. That is why I was so alarmed when I read the specifics for this new proposal. Firstly I would like to comment on the 7-day waiting period. Perhaps this would be relevant for other organizations, but mine (Quixtar) provides full refunds for up to 180 days after registering. Thus it is really not relevant for us. Perhaps make this rule should only be binding for organizations that do not offer full, no-questions-asked refunds. Also it is very detrimental to building a business quickly and efficiently. I know of many IBOs who were able to sponsor one or more individuals within their first 7 days. With this rule in place those people's growth would have been slowed. Next I am also concerned about the necessity of requiring references to prospects. I am really not familiar with how other opportunities work, but ours has what's known as an Open Meeting every week. The vast majority of prospects will attend this meeting and thus be able to socialize with dozens, sometimes hundreds, of successful business owners. So for our organization this is just really not relevant and I also think there is some infringement on the rights to privacy for those other Independent Business Owners. They are independent of me and should not have to endorse my business. The requirement for a litigation list is just really over the top. At this point with how litigous or society is, ANY successful business has dozens, hundreds, even thousands of lawsuits against it. Imagine if every McDonald's employee was handed a stack of papers detailing every single lawsuit ever filed against their organization, whether it was true or not. This would be ridiculous and probably take up a few hundred pages. It is silly to tell someone about a lawsuit in which Quixtar was found innocent. This is just really not fair because no other business opportunity has to disclose this information to their prospects or employees. Next I would like to touch on the requirement for earnings disclosure. Because each individual is different and may have different successes or challenges it is just really not fair to have to tell a prospect specifically how you are doing in the business. As long as the information regarding income generation is presented fairly and accurately, that will tell a prospect all they need to know. If a Business Owner is having challenges in his or her business, being forced to disclose them to prospects only hurts this person further. So if someone doesn't show great profitability in their first month they are pretty much doomed since they now have to tell every prospect they are losing money! However, there are hundreds of examples of business owners that didn't show profits for years and years and today are living an incredibly lifestyle making huge sums of money. Does Amazon.com have to disclose to its employees that their company has never ever turned a profit, never will, and is based entirely on an inflated stock price? No. What about the dozens of other companies that don't and won't every show profits but still pay their employees on-time every month? This is unfair and targetting our business above all others. Make every business in the country disclose in detail the profitability of every employee, or don't make us do it. It's just unfair to target our business like this. Finally I would like to touch on the requirements for financial substantion. Again I would like to draw an analogy to a traditional business. How many "succesful" employees are in debt? What if when applying to Microsoft Corp your boss had to come to you, open up his tax returns, and admit that like most americans he is thousands of dollars in debt. What would that do to his employee's belief level? It is just silly to have to disclose all our personal financial information to prospects.