[Federal Register Volume 88, Number 147 (Wednesday, August 2, 2023)]
[Notices]
[Pages 50865-50867]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16454]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request; Extension

AGENCY: Federal Trade Commission.

ACTION: Notice.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is 
seeking public comments on its proposal to extend for an additional 
three years the current Paperwork Reduction Act (``PRA'') clearance for 
information collection requirements contained in the FTC's Business 
Opportunity Rule (``Rule''). That clearance expires on January 31, 
2024.

DATES: Comments must be filed by October 2, 2023.

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://www.regulations.gov 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: Christine M. Todaro, Attorney, 
Division of Marketing Practices, Bureau of Consumer Protection, 600 
Pennsylvania Avenue NW, CC-6316, Washington, DC 20580, (202) 326-3711.

SUPPLEMENTARY INFORMATION: 
    Title: Disclosure Requirements Concerning Business Opportunities, 
16 CFR part 437.
    OMB Control Number: 3084-0142.
    Type of Review: Extension without change of currently approved 
collection.
    Abstract: The Business Opportunity Rule requires business 
opportunity sellers to furnish prospective purchasers a disclosure 
document that provides information regarding the seller, the seller's 
business, and the nature of the proposed business opportunity, as well 
as additional information to substantiate 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.
    The Rule is designed to ensure that prospective purchasers receive 
information to help them evaluate business opportunities. Sellers must

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disclose five key items of information in a simple, one-page document: 
(1) The seller's identifying information; (2) whether the seller makes 
a claim about the purchaser's likely earnings (and, if yes, the seller 
must provide information supporting any such claims); (3) whether the 
seller, its affiliates, or key personnel have been involved in certain 
legal actions (and, if yes, the seller must provide a separate list of 
those actions); (4) whether the seller has a cancellation or refund 
policy (and, if yes, the seller must provide a separate document 
stating the material terms of such policies); and (5) a list of persons 
who have purchased 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.
    Affected Public: Private Sector: Businesses and other for-profit 
entities.
    Estimated Annual Burden Hours: 10,065.
    Estimated Annual Labor Costs: $792,518.
    Estimated Annual Non-Labor Costs: $3,361,014.
    As required by section 3506(c)(2)(A) of the PRA, 44 U.S.C. 
3506(c)(2)(A), 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 Rule.

Burden Statement

    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. Of this 
total, staff estimates that on an annual basis approximately 90 percent 
are established sellers and the remaining 10 percent are new entrants 
(i.e., 2,745 existing business opportunity sellers plus 305 new 
entrants). In addition, staff estimates that approximately 61 business 
opportunity sellers market business opportunities in Spanish (in 
addition to English) and another 61 sellers market business 
opportunities in languages other than English or Spanish (in addition 
to English).\1\
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    \1\ FTC staff bases these estimates on census data. See American 
Community Survey, Household Language Table K201601 (2021), at 
https://data.census.gov/table?q=K201601:+HOUSEHOLD+LANGUAGE&tid=ACSSE2021.K201601. The 
census data indicates that approximately 2 percent of U.S. 
households speak Spanish and are classified as limited English-
speaking households. In addition, the data indicates that 
approximately 2 percent of the United States population speaks a 
language other than Spanish or English at home and are classified as 
limited English-speaking households. FTC staff estimates that 
approximately 2 percent of all entities selling business 
opportunities market in Spanish and 2 percent of all such entities 
market in languages other than English or Spanish.
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A. Estimated Hours Burden

    Compliance burdens will vary depending on a business opportunity 
seller's prior experience with the Rule. Appendices A and B to the Rule 
provide models of the required disclosure documents in both English and 
Spanish, reducing the potential burden that sellers may incur to 
provide the required disclosures. FTC staff estimates that 2,745 
existing business opportunity sellers will require approximately two 
hours to update their disclosure documents annually. This yields a 
total annual burden of 5,490 hours for established sellers. FTC staff 
also projects that 305 new business opportunity sellers will require 
approximately five hours to develop their initial disclosure documents. 
This yields a total annual burden of approximately 1,525 hours. In 
addition, FTC staff estimates that all business opportunity sellers 
will require approximately one hour to file and store required records 
for a total of 3,050 hours. This yields a cumulative total of 10,065 
hours.

B. Estimated Labor Cost

    FTC staff determines estimated labor costs by applying applicable 
wage rates to the burden hours discussed above. FTC staff assumes that 
an attorney likely would prepare or update required disclosure 
documents at an approximate hourly rate of $78.74.\2\ Accordingly, FTC 
staff estimates that cumulative labor costs are $792,518 (10,065 hours 
x $78.74 per hour).
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    \2\ This figure is derived from the mean hourly wage for 
Lawyers. See ``Occupational Employment and Wages--May 2022,'' Bureau 
of Labor Statistics, U.S. Department of Labor, Table 1 (``National 
employment and wage data from the Occupational Employment Statistics 
survey by occupation, May 2022''), available at https://www.bls.gov/news.release/ocwage.t01.htm.
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C. Estimated Non-Labor Costs

1. Printing and Mailing of the Disclosure Document
    Business opportunity sellers may 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 $1.10 
per document, for a total cost of $3,355,000. 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 costs associated with translating the disclosures will vary 
depending upon a business opportunity seller's prior experience and the 
language the seller uses to market business opportunities. Because 
Appendices A and B to the Rule provide illustrations of the required 
disclosure documents in both English and Spanish, business opportunity 
sellers marketing in Spanish will not incur costs to translate their 
disclosure documents. Existing sellers who market business 
opportunities in either Spanish or another non-English language may 
incur translation costs to update their disclosures over time. New 
entrants that market business opportunities in languages other than 
English or Spanish will incur costs to translate Appendix A into other 
languages.
    Informed by Census data, FTC staff estimates that 61 sellers market 
business opportunities in Spanish and an additional 61 sellers market 
business opportunities in languages other than English or Spanish. This 
includes an estimated 6 new entrants annually that market business 
opportunities in Spanish and 6 new entrants that market business 
opportunities in languages other than English or Spanish.
    FTC staff estimates that approximately 122 business opportunity 
sellers are marketing business opportunities in languages other than 
English. FTC staff estimates these sellers will require on average 
approximately 250 words (about one standard, double-spaced page) to 
update and create initial disclosures. Therefore, FTC staff estimates 
the total cost to translate sellers' disclosures is approximately 
$5,490 [122 sellers x (18 cents per word \3\ x 250 words)].
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    \3\ FTC staff estimates that this represents the current market 
rate per word to translate the disclosure documents into the 
language the sellers use to market business opportunities.
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    In addition, staff estimates that new entrant business opportunity 
sellers marketing in languages other than English or Spanish will incur 
burden to translate the required disclosures. There are 485 words in 
Appendix A to the Rule. Therefore, FTC staff estimates that the average 
annual cost burden for new business opportunity sellers to translate 
the required disclosures into a language

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other than English or Spanish will be approximately $524 [6 sellers x 
(18 cents per word x 485 words)].
    Thus, cumulative estimated non-labor costs are $3,361,014 
($3,355,000 + $5,490 + $524).

Request for Comment

    Pursuant to section 3506(c)(2)(A) of the PRA, the FTC invites 
comments on: (1) whether the disclosure and recordkeeping requirements 
are necessary, including whether the information will be practically 
useful; (2) the accuracy of our burden estimates, including whether the 
methodology and assumptions used are valid; (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.
    For the FTC to consider a comment, we must receive it on or before 
October 2, 2023. Your comment, including your name and your state, will 
be placed on the public record of this proceeding, including the 
https://www.regulations.gov website.
    You can file a comment online or on paper. Due to heightened 
security screening, postal mail addressed to the Commission will be 
subject to delay. We encourage you to submit your comments online 
through the https://www.regulations.gov website.
    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 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.
    Because your comment will become publicly available at https://www.regulations.gov, you are solely responsible for making sure that 
your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else'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, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
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)--including, in particular, competitively sensitive 
information, such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must (1) be filed in paper form, (2) be clearly labeled 
``Confidential,'' and (3) comply with FTC Rule 4.9(c). 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). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted publicly at www.regulations.gov, we cannot redact or remove 
your comment unless you submit a confidentiality request that meets the 
requirements for such treatment under FTC Rule 4.9(c), and the General 
Counsel grants that request.
    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 October 2, 
2023. For information on the Commission's privacy policy, including 
routine uses permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2023-16454 Filed 8-1-23; 8:45 am]
BILLING CODE 6750-01-P