Questions & Answers

What Information has to be in the Earnings Claim Statement in the Business Opportunity Rule?

What Information has to be in the Earnings Claim Statement in the Business Opportunity Rule? If you make a claim expressly or by implication about how much money a person can earn from your business opportunity, you have to put the claim in writing. Furthermore, it's illegal to make an earnings...

What is an MLM or Pyramid Scheme?

What is an MLM or Pyramid Scheme? MLM - also known as "network" or "matrix" marketing - is a way of selling goods and services through distributors. These plans typically promise that people who sign up as distributors will get commissions two ways - on their own sales and on the sales their...

What is the Disclosure Document Requirement in the Business Opportunity Rule?

What is the Disclosure Document Requirement in the Business Opportunity Rule? §437.3 The disclosure document. In connection with the offer for sale, sale, or promotion of a business opportunity, it is a violation of this Rule and an unfair or deceptive act or practice in violation of Section 5 of...

What is the Requirement to Furnish Written Documents in the Business Opportunity Rule?

What is the Requirement to Furnish Written Documents in the Business Opportunity Rule? §437.2 The obligation to furnish written documents. In connection with the offer for sale, sale, or promotion of a business opportunity, it is a violation of this Rule and an unfair or deceptive act or practice...

What Rules Apply to Ads for Franchises or Business Opportunities?

What Rules Apply to Ads for Franchises or Business Opportunities? The FTC's Trade Regulation Rule on Franchises and Business Opportunities ("Franchise Rule") governs the sale of franchises and business opportunities. The law requires sellers to make specific disclosures, give prospective buyers a...

What’s Covered in the Business Opportunity Rule?

What’s Covered in the Business Opportunity Rule? The Business Opportunity Rule applies to commercial arrangements where a seller solicits a prospective buyer to enter into a new business, the prospective purchaser makes a required payment, and the seller – expressly or by implication – makes...

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