[Federal Register Volume 75, Number 215 (Monday, November 8, 2010)]
[Proposed Rules]
[Pages 68559-68560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28044]



16 CFR Part 437

Disclosure Requirements and Prohibitions Concerning Business 

AGENCY: Federal Trade Commission.

ACTION: Staff Report.


SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') 
announces the publication of the Staff Report on the Business 
Opportunity Rule. The Staff Report sets forth the staff's 
recommendations to the Commission on the various proposed amendments to 
the Business Opportunity Rule.

DATES: Comments on the Staff Report must be submitted on or before 
January 18, 2011.

ADDRESSES: Interested persons are invited to submit written comments 
electronically or in paper form by following the instructions in the 
SUPPLEMENTARY INFORMATION section below. Comments filed in electronic 
form should be submitted at: https://ftcpublic.commentworks.com/ftc/busopprulestaffreport (and following the instructions on the web-based 
form). Comments filed in paper form should be mailed or delivered to 
the following address: Federal Trade Commission/Office of the 
Secretary, Room 113-H, Annex S, 600 Pennsylvania Ave., NW., Washington, 
DC 20580, in the manner detailed in the SUPPLEMENTARY INFORMATION 
section below.

FOR FURTHER INFORMATION CONTACT: Kathleen Benway (202) 326-2024, 
Division of Marketing Practices, Bureau of Consumer Protection, Federal 
Trade Commission, 600 Pennsylvania Avenue, NW., Room H-286, Washington, 
DC 20580.

SUPPLEMENTARY INFORMATION: The Business Opportunity Rule, 16 CFR part 
437, requires the pre-sale disclosure of information to prospective 
purchasers about the business opportunity and the seller.\1\ The 
Business Opportunity Rule, modeled on the original Franchise Rule, 
mandates that business opportunity sellers make 22 separate categories 
of disclosures to potential buyers. The Commission has concluded that 
these extensive disclosure requirements impose unnecessary compliance 
costs on both business opportunity sellers and buyers.

    \1\ 16 CFR 437 et seq.

    The Commission's experience in conducting numerous law enforcement 
sweeps of the business opportunity industry, however, demonstrates that

[[Page 68560]]

fraud in the sale of business opportunities is not only prevalent but 
persistent. Accordingly, the Commission has engaged in an ongoing 
effort to amend the Business Opportunity Rule to adequately protect 
consumers from potentially fraudulent business opportunity sellers, 
while at the same time minimizing compliance costs. The Commission 
began by publishing an initial Notice of Proposed Rulemaking in 
2006.\2\ It published a revised Notice of Proposed Rulemaking in 2008 
(``RNPR''),\3\ and held a public workshop on June 1, 2009 to discuss 
proposed amended disclosure requirements.\4\

    \2\ 71 FR 19,056 (Apr. 12, 2006).
    \3\ 73 FR 16,110 (Mar. 28, 2008).
    \4\ 74 FR 18,712 (Apr. 24, 2009).

    Pursuant to the Commission's Rules of Practice, and the rulemaking 
procedures specified earlier in the RNPR, the Commission now announces 
the availability of the Staff Report on the Business Opportunity Rule. 
The Staff Report summarizes the rulemaking record to date, analyzes the 
various alternatives suggested, and sets forth the staff's 
recommendation to the Commission on the proposed revised Rule. The 
Staff Report has not been endorsed or adopted by the Commission.
    The Staff Report is available at the FTC's Web site at http://www.ftc.gov. It is also available from the Commission's Public 
Reference Room, Room H-130, Federal Trade Commission, 600 Pennsylvania 
Avenue, NW., Washington, DC 20580.
    The Commission invites interested parties to submit written data, 
views, and arguments on the recommendations announced by the Staff 
Report by following the instructions in the ADDRESSES section of this 
notice. Comments, however, are to be limited to those matters not 
already part of the rulemaking record. Further, comments previously 
submitted in the ongoing rulemaking procedures are already part of the 
rulemaking record and need not be repeated. Written communications and 
summaries or transcripts of any oral communications respecting the 
merits of this proceeding from any outside party to any Commissioner or 
Commissioner's advisor will also be placed on the public record. See 16 
CFR 1.26(b)(5).
    Please note that comments will be placed on the public record--
including on the publicly accessible FTC Web site, at http://www.ftc.gov/os/publiccomments.shtm--and therefore should not include 
any sensitive or confidential information. In particular, comments 
should not include any sensitive personal information, such as an 
individual's Social Security Number; date of birth; driver's license 
number or other state identification number, or foreign country 
equivalent; passport number; financial account number; or credit or 
debit card number. Comments also should not include any sensitive 
health information, such as medical records or other individually 
identifiable health information. In addition, comments should not 
include any ``[t]rade secrets and commercial or financial information 
obtained from a person and privileged or confidential'' as provided in 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which 
confidential treatment is requested must be filed in paper (rather than 
electronic) form, must be clearly labeled ``Confidential,'' and must 
comply with FTC Rule 4.9(c).\5\

    \5\ FTC Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See FTC Rule 4.9(c), 16 CFR 4.9(c).

    The FTC is requesting that any comment filed in paper form be sent 
by courier or overnight service, if possible, because U.S. postal mail 
in the Washington area, and at the Commission, is subject to delay due 
to heightened security precautions.
    Because U.S. postal mail is subject to delay due to heightened 
security measures, please consider submitting your comments in 
electronic form. To ensure that the Commission considers an electronic 
comment, you must file it on the web-based form at the weblink https://ftcpublic.commentworks.com/ftc/busopprulestaffreport. If this Notice 
appears at http://www.regulations.gov/search/index.isp, you also may 
file an electronic comment though that Web site. The Commission will 
consider all comments that regulations.gov forwards to it.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. The Commission will consider all timely and responsive 
public comments that it receives, whether filed in electronic or paper 
form. Comments received will be available to the public on the FTC Web 
site, to the extent practicable, at http://www.ftc.gov. As a matter of 
discretion, the FTC makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC Web site. More information, including 
routine uses permitted by the Privacy Act, may be found at the FTC's 
privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
    Upon completion of the comment period, the staff will make final 
recommendations to the Commission about the Rule. Assuming the 
Commission adopts the proposed revised Rule as recommended by the 
staff, or after the conclusion of the comment period determines to make 
changes to the proposed revised Rule, it will publish in a future 
Federal Register notice the final text of the Rule, a statement of 
Basis and Purpose on the Rule, and an announcement of when the revised 
Rule will become effective.

    By direction of the Commission.
Richard C. Donohue,
Acting Secretary.
[FR Doc. 2010-28044 Filed 11-5-10; 8:45 am]