Section 445.901. Enumeration of deceptive or fraudulent practices.

Deceptive   or  fraudulent   practices  committed,  directly   or indirectly, in connection with the offer, sale, or purchase of a franchise include, but are not limited to, the following practices:

(a)   Misrepresentation of, or failure to disclose, the required total initial and deferred franchise fee for the franchise.

(b)     Misrepresentation   of  the  training   and   management   assistance available to the franchisee, or failure to disclose that little or none is available.

(c)   Misrepresentation or failure to disclose that the franchisor does not have significant experience in the sale of the  franchised   product   or service in this state.

(d)  Failure to disclose that the franchisor does not have  material information about the existence of a market for the product or service, if such is the case, or misrepresentation of that information.

(e)  Misrepresentation of, or failure to disclose, the franchisor's efforts to sell or establish more franchises  than  it  is  reasonable  to expect the market or market area for the particular franchise to  sustain.

(f)  Misrepresentation of the quantity or quality of the  products  or services to be sold or distributed through the franchise.

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

(h)      Representation that goods are new if they are deteriorated, altered, reconditioned,  used,  or  secondhand, or  failure to   disclose   such   a condition.

(i)   Misrepresentation of the number of franchisees the franchisor shall appoint or designate to operate within a given territory or shall locate within a given territory, or representation that a franchisee shall be or is the only franchisee appointed or located within  a   specified  franchise territory when, in fact, the franchisee is not.

(j)      Misrepresentation by failure to disclose, or otherwise, the termination, cancellation, reacquisition, transfer, or renewal  provisions of a franchise agreement.

(k)  Falsely claiming or inferring that a primary marketer, other than franchisor of trademark products or services, sponsors or participates directly or indirectly, in the franchise operation, or that the offeror has an affiliation, or connection with, or is attributed   some  special status by, the marketer.

(l)       Representation  that  locations   for  the  franchised  business, facilities, machines, or other devices are secured, or shall be secured, by the franchisor when, in fact, they are not or shall not be.

(m)   Representation that machines, equipment, products, or displays of a brand or kind are of a specific ability or nature when, in fact, they  are not.

(n)   Misrepresentation or failure to disclose that a person is being offered a franchise in a business, trade, or profession which requires a registration or license to conduct.

(o)  Representation, in any manner, that goods or services are offered for sale at a reduced price when they are not.

(p)   Representation of a reduction of prices charged by   "comparing" prices of goods of like kind and quality, where the comparison being made is not with other goods of essentially similar quality and  obtainable   in  the area.

(q)   Representing 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 the price is the same as that charged to those occupying a status similar to that of the franchisee.

History: 1979 AC.