View Rule

View EO 12866 Meetings

Printer-Friendly Version Download RIN Data in XML

FTC

RIN: 3084-AB04

Publication ID: Fall 2011

Title: Business Opportunity Rule
Abstract: From the review of the current Franchise Rule (RIN 3084-AA63), staff recommended that the rule be split into two parts: One part addressing franchise issues and the second addressing business opportunity issues. On April 6, 2006, the Commission announced publication of a Notice of Proposed Rulemaking (NPRM) seeking comment on this proposed Business Opportunity Rule. Pending completion of the proceeding initiated with this notice, business opportunities presently covered by the requirements of the original Rule will remain covered, as set forth as part 437 of the final amended Rule. 72 FR 15444 (March 30, 2007) Pending completion of the proceeding initiated with this notice, business opportunities presently covered by the requirements of the original Rule will remain covered, as set forth as part 437 of the final amended Rule. 72 FR 15444 (March 20, 2001). The proposed rule addresses fraud in the offer and sale of business opportunity ventures by requiring business opportunity sellers to furnish specific presale disclosures to prospective purchasers, as well as prohibiting specific conduct that the rulemaking record and the Commission's law enforcement experience show are prevalent problems. The extended comment period closed on July 17, 2006. A subsequent extended rebuttal comment period closed on September 29, 2006. After reviewing the comments, the Commission published a revised NPRM on March 26, 2008, that would require business opportunity sellers to furnish prospective purchasers with specific information that is material to the consumer's decision as to whether to purchase a business opportunity and which should help the purchaser identify fraudulent offerings. The revised NPRM also would prohibit other acts or practices that are unfair or deceptive within the meaning of section 5 of the Federal Trade Commission Act (the FTC Act). The comment period closed on May 27, 2008. The extended period for rebuttal comments closed on July 1, 2008 (73 FR 34895). The Commission held a day-long workshop on June 1, 2009, to explore proposed changes to the rule, including the effectiveness of the proposed one-page Business Opportunity Disclosure Form that sellers of business opportunities would be required to provide to prospective purchasers. The comment period closed on June 30, 2009. On October 28, 2010, the Commission released a staff report (the report can be found at http://www.ftc.gov/os/fedreg/2010/october/101028businessopportunitiesstaffreport.pdf)recommending that coverage of the Business Opportunity Rule be expanded to include work-at-home opportunities suck as envelope stuffing, medical billing, and product assembly, many of which have not been covered before. FTC staff also recommends streamlining the discourses required by the Business Opportunity Rule so that companies or individuals selling business opportunities make important disclosures to consumers on a simple, easy-to-read document. If adopted, the changes will make it less burdensome for legitimate sellers to comply with the Rule, while still protecting consumers from "widespread and persistent" business opportunity fraud. Public comments on the staff report were accepted until January 18, 2011. Staff anticipates final action by the Commission on a final rule by the end of 2011.
Agency: Federal Trade Commission(FTC)	Priority: Substantive, Nonsignificant
RIN Status: Previously published in the Unified Agenda	Agenda Stage of Rulemaking: Final Rule Stage
Major: No	Unfunded Mandates: No
CFR Citation: 16 CFR 437
Legal Authority: 15 USC 41 to 58

Legal Deadline: None

Timetable:

Action	Date	FR Cite
NPRM	04/12/2006	71 FR 19054
NPRM Comment Period End	06/16/2006
Rebuttal Comment Period End	07/07/2006
NPRM Comment Period Extended	06/01/2006	71 FR 31124
Extended Comment Period End	07/17/2006
NPRM Comment Period Extended	08/15/2006	71 FR 46878
Extended Rebuttal Comment Period End	09/29/2006
Revised NPRM	03/26/2008	73 FR 16110
Revised NPRM Comment Period End	05/27/2008
Rebuttal Comment Period End	06/16/2008
Extended Rebuttal Comment Period End	07/01/2008	73 FR 34895
Public Workshop	06/01/2009
Staff Report	11/08/2010	75 FR 68559
Staff Report Comment Period End	01/18/2011
Final Rule	12/00/2011

Regulatory Flexibility Analysis Required: No	Government Levels Affected: State
Small Entities Affected: Businesses	Federalism: No
Included in the Regulatory Plan: No
International Impacts: This regulatory action will be likely to have international trade and investment effects, or otherwise be of international interest.
RIN Data Printed in the FR: No
Related RINs: Split from 3084-AA63
Agency Contact: Christine Todaro Attorney Federal Trade Commission 600 Pennsylvania Avenue NW, Washington, DC 20580 Phone:202 326-3711 Email: ctodaro@ftc.gov