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Good News! The Federal Trade Commission (FTC) has issued a revised notice of its proposed Business Opportunity Rule, which could have devastated the network marketing industry. The notice exempts will be exempt from the proposed Rule! direct selling companies from the Rule, which proposes onerous requirements on recruiting new prospects and disclosing trade secret distributor information. Yes, the 124-page revision specifically states that legitimate direct selling companies

The original proposed Business Opportunity Rule, published on April 5, 2006, presented a serious challenge to direct selling distributors and companies, alike. Initially intended to extend controls beyond franchises to certain business opportunity ventures, the direct selling industry inadvertently got caught up in the scope of the restrictive 2006 proposal.

MLM selling distributors would have been required to:

· Provide recruits with lengthy disclosure statements prior to them signing up.

· Impose a seven-day waiting period from the time the opportunity is presented and the time a prospect joins the business.

· Disclose the names, addresses, and phone numbers of at least 10 sellers of the product.

Direct selling companies would have been required to:

· Create and distribute the additional collateral materials necessary to meet the above requirements; then,

· Retain and archive the receipts and paperwork generated for a minimum of three years.

Indeed, the Rule as originally written would have had a tremendous impact on industry recruiting, growth, and the viable future of MLM companies.

So, who do we thank for such a reprieve? According to Brittany Glenn, writer for Direct Selling News, “The Direct Selling Association played a key role in eliciting the revised ruling.” Ms. Glenn went on to say, “The effort was spearheaded by the DSA’s Business Opportunity Task Force chaired by Michael Lunceford, Senior Vice President of Government Relations for Mary Kay Inc., and the DSA Government Relations Committee, chaired by Josephine Mills, Executive Director of Global Government Affairs for Avon, along with DSA President Neil Offen and Executive Vice President Joseph Mariano.”

Of course, the efforts of individual companies such as Unicity, Neways, 4Life, Avon, Herbalife, and Mary Kay cannot go unmentioned. These companies and many more effectively presented the industry’s point of view to the FTC. The FTC specifically cited comments received from 4Life, AdvoCare, Arbonne, Avon, Cookie Lee Jewelry, EcoQuest, Financial Freedom Society, FreeLife, Herbalife, Lia Sophia, Liberty League International, Mannatech, Mary Kay, Melaleuca, Nature’s Sunshine, Neways, Pampered Chef, PartyLite, Pre-Paid Legal, Primerica Financial Services, Quixtar, Scent Station, Shaklee, Sunrider, Synergy Worldwide, Tastefully Simple, Xango, Vartec/Excel, Vemma and Young Living Essential Oils.

And then, there were the thousands of letters received from individual distributors and 84 members of Congress--all expressing their concern about the stifling effect of such a rule on their districts and home-based businesses, respectively. Reportedly, the FTC received more than 17,000 communications on the issue, only 187 supportive of the initial proposed Rule.

Obviously, industry participants large and small did not take the initial proposition lying down. Everyone contributed to a united front that, in the end, was very persuasive. But, we are not completely out of the woods yet. The FTC has requested comments to the proposed revised Rule by May 27, 2008, and rebuttal comments by June 16, 2008. “The FTC might hold hearings or in lieu thereof, workshops, to discuss the issues raised in its Revised Notice of Rulemaking and the comments it receives from the public,” reads an FTC press release dated March 18. So, it won’t be until the fall of 2008, at the earliest, that we will see the final rule. In the meantime, we can all take a united sigh of relief and know that we are better than ever for the effort made!

Stay tuned to MLM.com for relevant updates on the Business Opportunity Rule and other significant regulations, statutes, and laws that impact our industry.