Section 445.304. Release of escrowed funds.

(1) The administrator shall authorize the depository to release to the franchisor those amounts of the escrowed funds applicable to a specified franchisee or subfranchisor upon a showing satisfactory to the administrator that the franchisor has fulfilled its obligations under  the franchise agreement to establish the franchise, or that the  escrow   is  not required for the protection of the franchisee.

(2)   An application for an order of the administrator authorizing the release of escrowed funds to the franchisor shall be  verified    and  shall contain:

(a)   A statement of the franchisor that required proceeds from the sale of franchises have been placed with the depository in accordance with the terms and conditions of the escrow agreement.

(b)   A franchisee's verified  statement  of  completion   of  franchisor's obligations for release of funds from escrow.

(c)   A statement of the depository  signed  by  an  appropriate  officer setting forth the aggregate amount  of   escrowed  funds   placed  with   the depository when required by the administrator.

(d)  The names of each franchisee or subfranchisor and the amount held in escrow for the account of the franchisee or subfranchisor.

(e)   A showing that the franchisor, with respect to  a  franchise,  the funds for which are sought to be released, has completely performed obligations, cited by reference to the franchise agreement and its provisions, to provide real estate, improvements,   equipment,   inventory, training, or other items.

(f)  Other information the administrator may reasonably require.

(3)  If the administrator finds that any conditions of this agreement have not been satisfied or that any provisions of the Michigan  franchise investment law or rules have not been complied with, or the registration of the franchises has been revoked, then the administrator may withhold  such authorization for release  of   funds  by  the  escrow agent to  the franchisor and may direct the full return of funds by the  escrow   agent  to the franchisees.

History: 1979 AC.