Section 445.803. False, fraudulent, misleading, and deceptive advertising.

(1)  The   following  practices   shall  constitute,   without limitation, false, fraudulent, misleading, and  deceptive  advertising   in connection with the offer or sale of a franchise:

(a)   Failure to disclose in any communications media  advertising  the required total initial and deferred franchise fee for  the   franchise,  or misrepresent, in any way, the fee.

(b)    Misrepresentation of the training or management assistance available to the franchisee. The failure to disclose that little or none is provided, unless this requirement is  waived   by  the    administrator, constitutes a misrepresentation.

(c)    Misrepresentation or causing confusion or misunderstanding regarding the source, sponsorship, approval, or certification of franchised  goods  or services.

(d)  Dissemination of an advertisement in a language other than English without including therein the required disclosures or limitations on the offer advertised in the language principally used in the advertisement.

(e)     Obtaining leads to prospective franchisees by placing  classified advertisements designated or captioned "men wanted to train for . . . ," "help wanted," "employment," "business  opportunities,"  or  by  words    or terms of similar import, so as to represent directly or by  implication that employment is being offered when, in fact, it is not.

(f)  Designation or reference to sale representatives as "registrars," "counselors," "advisors," or words of similar import    that   misrepresent,   in any manner, the titles,

qualifications, training, experience,  or   status  of salesmen, agents, employees, or other representatives.

(g)   Representation in an advertisement that a person receive goods or services "free," "without charge," or any other term of similar import when the product or service is not, in fact, free.

(2)   An advertisement of a guarantee or warranty relating to the sale of franchised goods and services to the  franchisee,  or relating  to   the repurchase of the goods, shall  clearly and   conspicuously  disclose   the following:

(a)   The nature and extent of the guarantee, including disclosure of  the following:

(i)   The product or service being guaranteed.

(ii)    The characteristics or properties  of   the  designated   product  or service covered by or excluded from the guarantee.

(iii)     The conditions one claiming under the guarantee shall meet before the guarantor will fulfill its obligation under the guarantee.

(b)   The manner in which the guarantor will perform.

(c)   The identify of the guarantor.

(3)   A franchisor shall not advertise or represent that  a  product  is guaranteed, or that it shall repurchase the product for a specified price, when it cannot promptly fulfill its obligations under the guarantee.

(4)   Deceptive price advertising in connection with the offer or sale of a franchise includes, among other practices, the following:

(a)   Falsely representing, in any manner, that goods  or  services  are offered for sale at a reduction.

(b)     Representing that prices being  charged  are  a  reduction   by "comparing" prices of goods of like kind and quality, where the comparison being made is not with other goods of essentially similar quality, obtainable in the area, and at an established price.

(c)  Advertising a special price or limited offer  to  persons    when,   in fact, the offer is not limited and is being made to many persons on a mass advertising or marketing basis, or when the price is the  same as that charged to those occupying a status similar to that of a franchisee.

History: 1979 AC.