445.1501 Short title; construction. Sec. 1. This act shall be known and may be cited as the “franchise investment law”. This act shall be broadly construed to effectuate its purpose of providing protection to the public. History: 1974, Act 269, Eff. Oct. 15, 1974
445.1502 Definitions. Sec. 2. (1) “Advertisement” means a written or printed communication or a communication by means of recorded telephone message or spoken on radio, television, or similar communications media, published in connection with an offer or sale of a franchise. (2) “Department” means the department of attorney general. (3) “Franchise” means a contract or […]
445.1503 Additional definitions; burden of proof. Sec. 3. (1) “Franchise fee” means a fee or charge that a franchisee or subfranchisor is required to pay or agrees to pay for the right to enter into a business under a franchise agreement, including but not limited to payments for goods and services. The following are not […]
445.1504 Arrangements between franchisor and franchisee to which act applicable; making offer or sale of franchise in state; accepting offer to sell in state; communication of acceptance. Sec. 4. (1) This act applies to all written or oral arrangements between a franchisor and franchisee in connection with the offer or sale of a franchise, including, […]
445.1504a Applicability of act. Sec. 4a. This act shall not apply to a nonprofit organization operated on a cooperative basis by and for independent retailers to which all of the following apply: (a) Control and ownership of each member is substantially equal. (b) Membership is limited to those who use the services furnished by the […]
445.1504b Franchisee as sole employer. Sec. 4b. To the extent allocation of employer responsibilities between the franchisor and franchisee is permitted by law, the franchisee shall be considered the sole employer of workers for whom it provides a benefit plan or pays wages except as otherwise specifically provided in the franchise agreement. History: Add. 2015, […]
445.1505 Prohibited conduct in connection with offer, sale, or purchase of franchise. Sec. 5. A person shall not, in connection with the filing, offer, sale, or purchase of any franchise, directly or indirectly: (a) Employ any device, scheme, or artifice to defraud. (b) Make any untrue statement of a material fact or omit to state […]
445.1505a Franchise opportunities handbook. Sec. 5a. The department, in cooperation with the Michigan consumers council, shall prepare and make available to an interested agency or person a franchise opportunities handbook containing information to be used by a potential franchisee in evaluating a franchise offering. History: Add. 1984, Act 92, Eff. June 20, 1984
445.1506 Exemption of offer and sale of franchise from MCL 445.1507a and 445.1508; circumstances; compliance with MCL 445.1508. Sec. 6. (1) Except as provided in subsection (2), the offer and sale of a franchise is exempt from sections 7a and 8 if any of the following circumstances apply: (a) The transaction is by an executor, […]
445.1507 Repealed. 1984, Act 92, Eff. June 20, 1984. Compiler’s Notes: The repealed section pertained to conditions to exemption under MCL 445.1506(1).
445.1507a Notice required prior to offering for sale or selling franchise; fee; form and contents of notice; indorsement, return, and duration of notice; effect of compliance; penalty for failure to file notice; duty of franchisor with effective registration or exemption from registration; validity and enforceability of franchise documents; written notice of filing date and penalties; […]
445.1508 Prospective franchisee to be provided copy of disclosure statement, notice, and proposed agreements; form and contents of disclosure statement; location and contents of notice. Sec. 8. (1) A franchise shall not be sold in this state without first providing to the prospective franchisee, at least 10 business days before the execution by the prospective […]
445.1509-445.1511 Repealed. 1984, Act 92, Eff. June 20, 1984. Compiler’s Notes: The repealed sections pertained to disclosure statement, exemption from registration requirements, and proposed offering prospectus.
445.1512 Escrow of initial investment and other funds; time; surety bond; financial institution as escrow agent; release of escrowed funds; affidavit. Sec. 12. (1) A franchisor whose most recent financial statements are unaudited and which show a net worth of less than $100,000.00 shall, at the request of a franchisee, arrange for the escrow of […]
445.1513 Conditions prohibiting offering for sale or selling franchise. Sec. 13. A franchise shall not be offered for sale or sold in this state if any of the following apply: (a) The franchisor’s method of business includes or would include activities which are illegal where performed. (b) A person identified in the disclosure statement has […]
445.1514-445.1518 Repealed. 1984, Act 92, Eff. June 20, 1984. Compiler’s Notes: The repealed sections pertained to effective date of registration, notice of stop order, conditions to sale of franchise, and renewal of registration.
445.1519 Filing change in information contained in notice. Sec. 19. A franchisor shall file with the department promptly in writing any change in the information contained in the notice as originally submitted or amended. History: 1974, Act 269, Eff. Oct. 15, 1974 ;– Am. 1984, Act 92, Eff. June 20, 1984
445.1520 Accounts of franchise sales; reports; examination of records. Sec. 20. A franchisor offering franchises for sale in this state shall keep and maintain accounts of franchise sales in accordance with generally accepted accounting principles and shall make and file with the department such reports as the department may by rule or order prescribe, including […]
445.1521 Certain facts not to constitute finding or approval; representation inconsistent with section prohibited. Sec. 21. (1) The fact that documents required under this act are filed does not constitute a finding by the department that a document filed under this act is true, complete, or not misleading. Neither any such fact nor the fact […]
445.1522 Service of process. Sec. 22. The notice filed by a nonresident franchisor under section 7a shall be considered an irrevocable consent appointing the corporations and securities bureau of the department of commerce to be its attorney to receive service of lawful process in any noncriminal action or proceeding against it or its successor, executor, […]
