Michigan Compiled Laws Act 269 Of 1974 Franchise Investment Law (445.1501 - 445.1546)

AN ACT to regulate the offer, sale, and purchase of franchises; to prohibit fraudulent practices in relation thereto; to prohibit pyramid and chain promotions; to impose regulatory duties upon certain state departments and agencies; and to provide penalties.

History: 1974, Act 269, Eff. Oct. 15, 1974 ;-- Am. 1984, Act 92, Eff. June 20, 1984

Section 445.1501 Short Title; Construction.
This act shall be known and may be cited as the “franchise investment law”. This act shall be broadly construed to effectuate its purpose...
Section 445.1502 Definitions.
(1) “Advertisement” means a written or printed communication or a communication by means of recorded telephone message or spoken on radio, television, or similar...
Section 445.1503 Additional Definitions; Burden Of Proof.
(1) “Franchise fee” means a fee or charge that a franchisee or subfranchisor is required to pay or agrees to pay for the right...
Section 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.
(1) This act applies to all written or oral arrangements between a franchisor and franchisee in connection with the offer or sale of a...
Section 445.1504a Applicability Of Act.
This act shall not apply to a nonprofit organization operated on a cooperative basis by and for independent retailers to which all of the...
Section 445.1505 Prohibited Conduct In Connection With Offer, Sale, Or Purchase Of Franchise.
A person shall not, in connection with the filing, offer, sale, or purchase of any franchise, directly or indirectly: (a) Employ any device, scheme,...
Section 445.1505a Franchise Opportunities Handbook.
The department, in cooperation with the Michigan consumers council, shall prepare and make available to an interested agency or person a franchise opportunities handbook...
Section 445.1506 Exemption Of Offer And Sale Of Franchise From Mcl 445.1507a And 445.1508; Circumstances; Compliance With Mcl 445.1508.
(1) Except as provided in subsection (2), the offer and sale of a franchise is exempt from sections 7a and 8 if any of...
Section 445.1507 Repealed. 1984, Act 92, Eff.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Compiler's Notes: The repealed section pertained to conditions to exemption under MCL 445.1506(1).
Section 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; Failure To Notify Franchisor.
(1) Prior to offering for sale or selling a franchise in this state, a person annually shall file a notice with the department along...
Section 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.
(1) A franchise shall not be sold in this state without first providing to the prospective franchisee, at least 10 business days before the...
Section 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.
Section 445.1512 Escrow Of Initial Investment And Other Funds; Time; Surety Bond; Financial Institution As Escrow Agent; Release Of Escrowed Funds; Affidavit.
(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...
Section 445.1513 Conditions Prohibiting Offering For Sale Or Selling Franchise.
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...
Section 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.
Section 445.1519 Filing Change In Information Contained In Notice.
A franchisor shall file with the department promptly in writing any change in the information contained in the notice as originally submitted or amended....
Section 445.1520 Accounts Of Franchise Sales; Reports; Examination Of Records.
A franchisor offering franchises for sale in this state shall keep and maintain accounts of franchise sales in accordance with generally accepted accounting principles...
Section 445.1521 Certain Facts Not To Constitute Finding Or Approval; Representation Inconsistent With Section Prohibited.
(1) The fact that documents required under this act are filed does not constitute a finding by the department that a document filed under...
Section 445.1522 Service Of Process.
The notice filed by a nonresident franchisor under section 7a shall be considered an irrevocable consent appointing the corporations and securities bureau of the...
Section 445.1523 Untrue Statement, Omission, Or Failure To Give Notice Of Change.
A person shall not make an untrue statement of a material fact in a notice or report filed with the department under this act,...
Section 445.1524 Filing Of Advertisement Or Sales Literature; Exemption From Liability.
(1) The department may by rule or order require the filing of any advertisement or other sales literature or advertising communication addressed or intended...
Section 445.1525 Publication Of False Or Misleading Advertisement Prohibited.
A person shall not publish an advertisement concerning the offer or sale of a franchise in this state if the advertisement contains a statement...
Section 445.1526 Repealed. 1984, Act 92, Eff. June 20, 1984.
Compiler's Notes: The repealed section pertained to violation of order.
Section 445.1527 Void And Unenforceable Provisions.
Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise: (a) A prohibition on the right...
Section 445.1528 Pyramid Or Chain Promotion Or Distribution.
(1) A person may not offer or sell any form of participation in a pyramid or chain promotion. A pyramid or chain promotion is...
Section 445.1529, 445.1530 Repealed. 1984, Act 92, Eff. June 20, 1984.
Compiler's Notes: The repealed sections pertained to franchise agent's application and cease and desist order.
Section 445.1531 Liability For Damages Or Rescission; Basis Of Damages.
(1) A person who offers or sells a franchise in violation of section 5 or 8 is liable to the person purchasing the franchise...
Section 445.1532 Joint And Several Liability.
A person who directly or indirectly controls a person liable under this act, a partner in a firm so liable, a principal executive officer...
Section 445.1533 Statute Of Limitations.
An action shall not be maintained to enforce a civil or criminal liability created under this act unless brought before the expiration of 4...
Section 445.1534 Civil Liability; Liability Under Other Statute Or Common Law.
Except as explicitly provided in this act, civil liability in favor of any private party shall not arise against a person by implication from...
Section 445.1535 Action By Department For Injunction, Restitution, Or Compliance; Restraining Order; Writ Of Mandamus; Appointment Of Receiver Or Conservator; Bond Not Required; Costs; Notice Of Action; Opportunity To Cease And Desist Or To Confer With Department; Presumption Of Immediate And Irreparable Harm.
(1) Whenever it appears to the department that a person has engaged, is engaged, or is about to engage in an act or practice...
Section 445.1536 Investigations; Statements Under Oath; Administration Of Oaths And Affirmations; Subpoena; Evidence; Order Requiring Appearance; Self-incrimination; Perjury; Contempt.
(1) The department in its discretion may: (a) Make such public or private investigations within or without this state as it deems necessary to...
Section 445.1537 Repealed. 1984, Act 92, Eff. June 20, 1984.
Compiler's Notes: The repealed section pertained to referring information as to violation to attorney general.
Section 445.1538 Violation; Penalty; Punishing Crime Under Other Statute.
A person who violates a provision of this act shall be fined not more than $10,000.00, or imprisoned for not more than 7 years,...
Section 445.1539 Prohibited Conduct Equivalent To Appointment Of Corporations And Securities Bureau As Attorney For Service Of Process; Procedure For Service Of Process.
When a person, including a nonresident of this state, engages in conduct prohibited or made actionable by this act or a rule or order...
Section 445.1540 Collection And Disposition Of Fees And Fines; Detailed Statement; Fee For Filing Notice Under Mcl 445.1507a.
(1) The department shall charge and collect the fee fixed by this section. Fees and fines collected under this section and section 7a shall...
Section 445.1541 Rules.
The department shall promulgate rules pursuant to Act No. 306 of the Public Acts of 1969, as amended, being sections 24.201 to 24.315 of...
Section 445.1542 Documents Subject To Mcl 15.231 To 15.246; Publication Of Information; Disclosure Of Information Withheld From Public Inspection; Evidence Sought Under Subpoena.
Filings, reports, and other papers and documents filed with the department under this act shall be subject to the freedom of information act, Act...
Section 445.1543-445.1545 Repealed. 1984, Act 92, Eff. June 20, 1984.
Compiler's Notes: The repealed sections pertained to copies of documents and provided an effective date.
Section 445.1546 Prior Acts, Offenses, Rights, Liabilities, Penalties, Forfeiture, Or Punishments Not Impaired Or Affected; Transfer Of Records, Personnel, And Funds.
(1) This act does not impair or affect any act done, offense committed, or right accruing, accrued, or acquired, or a liability, penalty, forfeiture,...

Last modified: October 10, 2016