[Federal Register Volume 79, Number 176 (Thursday, September 11, 2014)]
[Notices]
[Pages 54276-54278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-21685]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Notice.

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SUMMARY: The FTC intends to ask the Office of Management and Budget 
(``OMB'') to extend for an additional three years the current Paperwork 
Reduction Act (``PRA'') clearance for information collection 
requirements contained in the Commission's Business Opportunity Rule 
(``Rule''). That clearance expires on February 28, 2015.

DATES: Comments must be submitted by November 10, 2014.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Business Opportunity 
Rule Paperwork Comment, FTC File No. P114408'' on your comment, and 
file your comment online at https://ftcpublic.commentworks.com/ftc/BusinessOptionRulePRA by following the instructions on the web-based 
form. If you prefer to file your comment on paper, mail your comment to 
the following address: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex J), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street, SW., 5th Floor, Suite 5610 (Annex J), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
should be addressed to Christine M. Todaro, Attorney, Division of 
Marketing Practices, Bureau of Consumer Protection, Federal Trade 
Commission, 600 Pennsylvania Avenue NW, CC-8528, Washington, DC 20580, 
(202) 326-3711.

SUPPLEMENTARY INFORMATION: Under the PRA, 44 U.S.C. 3501-3521, federal 
agencies must obtain approval from OMB for each collection of 
information they conduct or sponsor. ``Collection of information'' 
means agency requests or requirements that members of the public submit 
reports, keep records, or provide information to a third party. 44 
U.S.C. 3502(3); 5 CFR 1320.3(c). As required by section 3506(c)(2)(A) 
of the PRA, the FTC is providing this opportunity for public comment 
before requesting that OMB extend the existing clearance for the 
information collection requirements contained in the Business 
Opportunity Rule, 16 CFR Part 437 (OMB Control Number 3084-0142).
    The FTC invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility;

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(2) the accuracy of the agency's estimate of the burden of the proposed 
collection of information, including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (4) ways to minimize 
the burden of the collection of information on those who are to 
respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses.
    The Business Opportunity Rule requires business opportunity sellers 
to furnish to prospective purchasers a disclosure document that 
provides information relating to the seller, the seller's business, the 
nature of the proposed business opportunity, as well as additional 
information regarding any claims about actual or potential sales, 
income, or profits for a prospective business opportunity purchaser. 
The seller must also preserve information that forms a reasonable basis 
for such claims. These disclosure and recordkeeping requirements are 
subject to the PRA.
    The Rule is designed to ensure that prospective purchasers of a 
business opportunity receive information that will help them evaluate 
the opportunity that is presented to them. Sellers must disclose five 
key items of information in a simple, one-page document:
     The seller's identifying information;
     whether the seller makes a claim about the purchaser's 
likely earnings (and, if the seller checks the ``yes'' box, the seller 
must provide information supporting any such claims);
     whether the seller, its affiliates or key personnel have 
been involved in certain legal actions (and, if yes, a separate list of 
those actions);
     whether the seller has a cancellation or refund policy 
(and, if yes, a separate document stating the material terms of such 
policies); and
     a list of persons who bought the business opportunity 
within the previous three years.
    Misrepresentations and omissions are prohibited under the Rule, and 
for sales conducted in languages other than English, all disclosures 
must be provided in the language in which the sale is conducted.

PRA Burden Analysis

    Subject to public comment to shed further light, the FTC retains 
its respondent population estimates from the PRA analysis tied to its 
2011 final amendments to the Rule.\1\ Thus, FTC staff estimates there 
are approximately 3,050 business opportunity sellers covered by the 
Rule, including vending machine, rack display, work-at-home, and other 
opportunity sellers. Staff also estimates that approximately 10% of the 
3,050 business opportunity sellers covered by the Rule reflects an 
equal amount of new and departing business entrants (thus, for 
simplicity, staff assumes that, for a given year, there are 2,745 
existing business opportunity sellers plus 305 new entrants to the 
field). Additionally, staff estimates that approximately 168 of 
business opportunity sellers market business opportunities in Spanish 
(in addition to English) and approximately 92 sellers market in 
languages other than English or Spanish \2\ (in addition to English).
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    \1\ 76 FR 76816, 76856 (Dec. 8, 2011).
    \2\ To estimate how many of the 3,050 sellers market business 
opportunities in languages other than English, FTC staff relies upon 
2012 United States Census Bureau (``Census'') data. Calculations 
based upon this data reveal that approximately 5.5% of the United 
States population speaks Spanish or Spanish Creole at home and 
speaks English less than ``very well.'' Calculations based upon that 
same survey reveal that approximately 3.0% of the United States 
population speaks a language other than Spanish, Spanish Creole, or 
English at home and speak English less than ``very well.'' Staff 
thus projected that 5.5% of all entities selling business 
opportunities market in Spanish or Spanish Creole and 3.0% of all 
entities selling business opportunities market in languages other 
than English, Spanish and Spanish Creole. http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_12_1YR_S1601&prodType=table.
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A. Estimated Hours Burden

    The burden estimates for compliance will vary depending on the 
particular business opportunity seller's prior experience with the 
Rule. Commission staff estimates that the projected 2,745 existing 
business opportunity sellers will require no more than approximately 
two hours to update the disclosure document [5,490 total hours]. Staff 
further projects that the estimated 305 new business opportunity 
sellers will require no more than approximately five hours to develop 
the disclosure document [1,525 total hours]. Both existing and new 
business opportunity sellers will require approximately one hour to 
file and store records [3,050 total hours], for a cumulative total of 
10,065 hours [5,490 hours + 1,525 hours + 3,050 hours] per year to meet 
the Rule's disclosure and recordkeeping requirements.

B. Estimated Labor Cost

    Labor costs are determined by applying applicable wage rates to 
associated burden hours. Commission staff assumes that an attorney 
likely would prepare or update the disclosure document at an estimated 
hourly rate of $250. Accordingly, staff estimates that cumulative labor 
costs are $2,516,250 [10,065 hours x $250 per hour].

C. Estimated Non-Labor Costs:

1. Printing and Mailing of the Disclosure Document
    Business opportunity sellers must also incur costs to print and 
distribute the single-page disclosure document, plus any attachments. 
These costs vary based upon the length of the attachments and the 
number of copies produced to meet the expected demand. Commission staff 
estimates that 3,050 business opportunity sellers will print and mail 
approximately 1,000 disclosure documents per year at a cost of $1.00 
per document, for a total cost of $3,050,000. Conceivably, many 
business opportunity sellers will elect to furnish disclosures 
electronically; thus, the total cost could be much less.
2. Translating the Required Disclosures Into a Language Other Than 
English
    The Rule requires that sellers update their disclosures. The costs 
associated with translating the disclosures will vary depending upon a 
business opportunity seller's prior experience with the Rule and the 
language the seller uses to market the opportunity. For example, 
existing and new business opportunity sellers marketing in Spanish will 
not incur costs to translate the disclosure document as Appendices A 
and B to the Rule provide, respectively, illustrations of the requisite 
disclosure documents in English and Spanish. Existing sellers, 
regardless of the non-English language used to present disclosures, may 
incur translation costs to update the document. New entrants that 
market business opportunities in languages other than English or 
Spanish (in addition to an assumed use of disclosure documents in 
English) will incur translation costs to translate Appendix A from 
English and to enter equivalent responses in these other languages.
    As stated above, using assumptions informed by Census data (see 
footnote 2), FTC staff estimates that 168 sellers market business 
opportunities in Spanish and an additional 92 sellers market in 
languages other than English or Spanish. This includes an estimated 9 
new entrants in the latter sub-category (based on the assumption that 
10% yearly of a given group consists of new entrants with an equal 
offset for departing business entities). Those new entrants will incur 
initial translation

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costs to draft a disclosure document consistent with Appendix A to the 
Rule.
    There are 485 words in Appendix A to the Rule. Therefore, the total 
cost burden to translate the disclosure document for the 9 new business 
opportunity sellers marketing in a language other than English or 
Spanish will be approximately $764 [9 sellers x (17.5 cents \3\ per 
word x 485 words)].
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    \3\ Staff estimates that it will cost approximately 17.5 cents 
to translate each word into the language the sellers use to market 
the opportunities.
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    For purposes of this PRA analysis, staff assumes that both new and 
existing business opportunity sellers marketing business opportunities 
in languages other than English [260 sellers]: (1) are marketing in 
both English and another language; (2) are not incorporating any 
existing materials into their disclosure document; (3) have been the 
subject of civil or criminal legal actions; (4) are making earnings 
claims; (5) have a refund or cancellation policy; and (6) because of 
all of the above assumptions, require approximately 250 words 
(approximately one standard, double-spaced page) to translate their 
updates, in the case of existing business opportunity sellers, or 
supply and translate their initial disclosures, in the case of new 
business opportunity sellers. Therefore, the total cost to translate 
the updates or to translate from English the initial disclosures is 
approximately $11,375 [260 sellers x (17.5 cents per word x 250 
words)].
    Thus, cumulative estimated non-labor costs are $3,062,139 
($3,050,000 + $764 + $11,375).
    Request for Comment:
    You can file a comment online or on paper. For the FTC to consider 
your comment, we must receive it on or before November 10, 2014. Write 
``Business Opportunity Rule Paperwork Comment, FTC File No. P114408'' 
on your comment. Your comment--including your name and your state--will 
be placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone'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. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and which is privileged or 
confidential . . . '' as provided in Section 6(f) of the FTC Act, 15 
U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). If you want 
the Commission to give your comment confidential treatment, you must 
file it in paper form, with a request for confidential treatment, and 
you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 
4.9(c).\4\ Your comment will be kept confidential only if the FTC 
General Counsel grants your request in accordance with the law and the 
public interest.
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    \4\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online, or to send them to the Commission by courier or 
overnight service. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/BusinessOptionRulePRA by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``Business Opportunity 
Rule Paperwork Comment, FTC File No. P114408'' on your comment and on 
the envelope, and mail or deliver it to the following address: Federal 
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, 
Suite CC-5610 (Annex J), Washington, DC 20580, or deliver your comment 
to the following address: Federal Trade Commission, Office of the 
Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 
5610 (Annex J), Washington, DC 20024. If possible, submit your paper 
comment to the Commission by courier or overnight service.
    The FTC Act and other laws that 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 on or before November 10, 
2014. You can find more information, including routine uses permitted 
by the Privacy Act, in the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

David C. Shonka,
Principal Deputy General Counsel.
[FR Doc. 2014-21685 Filed 9-10-14; 8:45 am]
BILLING CODE 6750-01-P