553.24 (6) Within 10 days after the filing date of
the information required under s. 553.22 or an application for an exemption under s. 553.25, the division may require that additional information be filed if the division determines that the information is reasonably necessary to establish an exemption under s. 553.22 or 553.25. If the division requires additional information, the exemption is not effective until 10 days after the additional information is filed with the division, unless a shorter period is permitted by the division.
553.25 Exemption by division. The division may by rule or order exempt from registration under s. 553.21 any offer or sale of a franchise if registration is not necessary or appropriate in the public interest or for the protection of investors.
364, s. 15
553.26 (title) of the statutes is amended to read:
553.26 (title) Application for registration Registration by notification.
364, s. 16
553.26 (intro.) of the statutes is repealed.
364, s. 17
553.26 (1) to (3) of the statutes are repealed and recreated to read:
553.26 (1) A person who wishes to sell a franchise in this state that is not excluded under s. 553.22 and that is not exempt from registration under s. 553.23, 553.235 or 553.25 shall register the franchise by notification to the division. The notification shall be on a notice form prescribed by the division, which need include only the name of the franchisor or subfranchisor, the name or names under which the franchisor or subfranchisor intends to do business and the franchisor's or subfranchisor's principal business address. Nothing other than a copy of the offering circular required under s. 553.27(4), the consent to service of process required by s. 553.27 (10), if it is not already on file with the division, and the registration fee required under s. 553.72 (1) need accompany the notification.
(2) A franchisor may register only one franchise system on each notification.
(3) Registration is effective upon receipt of the notification by the division. The notice shall be effective for one year from the date on which the division receives it.
553.26 (4) Upon receipt of notification, the division shall endorse upon the notice form "received" and the date and shall return a copy to the person who filed the notice form.
364, s. 19
553.26 (4m) of the statutes is created to read:
553.26 (4m) A person who has complied with sub. (1) need not file with the division, during the period when the registration is effective, any more information, including any amendments to the offering circular. The division may not require changes in the offering circular filed by the franchisor, subject to the division's authority to suspend or revoke a registration for any of the causes under s. 553.28.
364, s. 20
553.26 (5) and (6) of the statutes are repealed.
364, s. 22
553.26 (8) to (17) of the statutes are repealed.
364, s. 24
553.26 (19) of the statutes is repealed.
364, s. 26
553.26 (21) of the statutes is repealed.
364, s. 27
553.26 (22) of the statutes is repealed.
364, s. 28
553.27 (title) of the statutes is amended to read:
553.27 (title) General registration provisions; offering circular; consent to service of process.
364, s. 29
553.27 (1) of the statutes is repealed.
553.27 (2) If the division finds that the applicant has failed to demonstrate that adequate financial arrangements have been made to fulfill obligations to provide real estate, improvements, equipment, inventory, training or other items included in the offering and if the franchisee so requests, the division may by rule or order require the escrow of franchise fees and other funds paid by the franchisee or subfranchisor until no later than the time of opening of the franchise business, or, at the option of the franchisor, the furnishing of a surety bond as provided by rule of the division, if the division finds that such requirement is necessary and appropriate to protect prospective franchisees or subfranchisors.
553.27 (4) No franchise subject to registration under this chapter may be sold in this state unless a copy of the an offering circular in the form prescribed by rule of the division is provided to the prospective franchisee at least 10 business days prior to the execution by the prospective franchisee of any binding franchise or other agreement or at least 10 business days prior to the receipt of any consideration, whichever first occurs. The offering circular may be in a form that the division requires by rule, in a form permitted under 16 CFR 436 or in a form permitted by a successor to that regulation.
364, s. 32
553.27 (5) of the statutes is repealed.
553.27 (10) Every applicant for registration of an offer to sell franchises under this chapter franchisor who files a notification shall file with the division, in such the form as that the division by rule prescribes, an irrevocable consent appointing the division to be the applicant's attorney to receive service of any lawful process in any civil action against the applicant or the applicant's successor, executor or administrator, which that arises under this chapter or any rule or order under this chapter after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. A person who has filed a consent in connection with a previous registration or exemption under this chapter need not file another. Service may be made by leaving a copy of the process in the office of the division but it is not effective unless the plaintiff, who may be the division in an action instituted by the division, forthwith sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at his or her last address on file with the division, and the plaintiff's affidavit of compliance with this subsection is filed in the case on or before the return day of the process, if any, or within such further the time as that the court allows.
364, s. 39
553.28 (title) of the statutes is amended to read:
553.28 (title) Denial, suspension or revocation of registrations or exemptions.
553.28 (1) (intro.) The division may issue an order denying effectiveness to, or postponing, suspending or revoking the effectiveness of, any registration statement if the division finds any of the following:
553.28 (1) (a) That the franchisor or any person acting on behalf of the franchisor failed to provide an offering circular to a person purchasing a franchise in this state within the time period prescribed in s. 553.27 (4).
364, s. 41m
553.28 (1) (b) of the statutes is repealed and recreated to read:
553.28 (1) (b) That any person in this state was sold a franchise by means of any written or oral communication that contained an untrue statement of a material fact, or that omitted to state a material fact necessary in order to make statements made, in the light of the circumstances under which they were made, not misleading.
364, s. 41s
553.28 (1) (c) of the statutes is repealed.
364, s. 42
553.28 (1) (d) of the statutes is amended to read:
553.28 (1) (d) That any person identified in an application for registration the franchisor's offering circular has been convicted of an offense specified under s. 553.26 (5) that is required to be disclosed in the offering circular, or is subject to an order, or has had a civil judgment entered against him or her as described in s. 553.26 (5) that is required to be disclosed in the offering circular, and the involvement of the person in the same sale or management of the franchise creates an unreasonable risk to prospective franchisees.
553.28 (1) (e) That the applicant or registrant franchisor has failed to pay the proper filing fee;, but the division may enter only a denial order under this paragraph and the division shall vacate any such order when the deficiency has been corrected.
364, s. 44
553.28 (1) (f), (g) and (h) of the statutes are repealed.
553.28 (2) If the public interest and the protection of investors so require, the division may by order summarily deny, postpone, suspend or revoke the effectiveness of the registration.
364, s. 50
553.41 (3) of the statutes is amended to read:
553.41 (3) No person may offer, purchase or sell a franchise in this state by means of any written or oral communication not included in sub. (1) which (4) that includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.
364, s. 51
553.41 (4) of the statutes is amended to read:
553.41 (4) No person may make any untrue statement of a material fact in any statement required to be disclosed in writing in a timely manner pursuant to s. 553.22 or under s. 553.27 or omit to state in any such statement any material fact which that is required to be stated therein in the statement.
553.41 (5) No person may wilfully represent to any prospective purchaser or seller of a franchise franchisee in this state that the filing of a franchise registration application or the registration of a franchise constitutes a finding by the division that any document filed under this chapter is true, complete, and not misleading, or in relation to an exemption or exception, that the division has passed in any way upon the merits of any franchise or wilfully represent in a similar manner that a franchise is registered or exempted when in fact, such that is not the case.
364, s. 53
553.51 (title) of the statutes is amended to read:
553.51 (title) Civil liability; offer or sale in violation.
364, s. 54
553.51 (1) of the statutes is amended to read:
553.51 (1) Any person who offers, purchases or sells a franchise in violation of s. 553.21 or 553.41 (1), (2), (4) or (5) 553.27 (4), if the violation was material in the franchisee's or subfranchisor's decision to purchase the franchise, shall be liable to the franchisee or subfranchisor, who may bring an action for rescission, unless, in the case of a violation of s. 553.41 (1), (2), (4) or (5), the defendant proves that the plaintiff knew the facts concerning the untruth or omission, or that the defendant exercised reasonable care and did not know, or, if the defendant had exercised reasonable care, would not have known, of the untruth or omission.
364, s. 55
553.51 (2) of the statutes is amended to read:
553.51 (2) Any person who violates s. 553.41 (3) shall be, (4) or (5) is liable for damages to any person who does not knowing know or having have cause to believe that such the statement or representation was false or misleading and who, while relying upon such the statement, shall have sold or representation, purchased a franchise, for damages, unless the defendant proves that the plaintiff knew the facts concerning the untruth or omission or that the defendant exercised reasonable care and did not know, or if the defendant had exercised reasonable care would not have known, of the untruth or omission.
553.51 (4) No action may be maintained against any person to enforce any liability under this section unless it is brought before the expiration of 3 years after the act or transaction constituting the violation upon which the liability is based or 90 days after delivery to the franchisee of a written notice disclosing from or on behalf of that person that discloses any violation of s. 553.21 or 553.41, which notice shall be approved as to form by this chapter and that is filed with the division, whichever first expires.
364, s. 57
553.52 (1) of the statutes is amended to read:
553.52 (1) Any person who wilfully violates any provision of this chapter except s. 553.41 (1), or any rule under this chapter, (2) to (5) or any order of which the person has notice, or who violates s. 553.41 (1) knowing or having reasonable cause to believe either that the statement made was false or misleading in any material respect or that the failure to report a material event under s. 553.31 (1) was false or misleading in any material respect, may be fined not more than $5,000 or imprisoned for not more than 5 years or both. Each of the acts specified shall constitute is a separate offense, and a prosecution or conviction for any one of those offenses shall does not bar prosecution or conviction for any other offense.
364, s. 58
553.52 (2) of the statutes is amended to read:
553.52 (2) Any person who employs, directly or indirectly, any device, scheme or artifice to defraud in connection with the offer or sale of any franchise or engages, directly or indirectly, in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person in connection with the offer, purchase or sale of any franchise shall be fined not more than $5,000 or imprisoned for not more than 5 years, or both.
364, s. 59m
553.54 (2) (a) of the statutes is amended to read:
553.54 (2) (a) The court may, prior to the entry of final judgment, issue such orders or judgments as are necessary to restore to any person any pecuniary loss suffered because of the acts or practices involved in the action if proof of the pecuniary loss is submitted to the satisfaction of the court. Orders or judgments under this paragraph shall not provide restoration of any pecuniary loss to persons for whom recovery is sought where the defendant in the action establishes that the persons were in possession of knowledge which would defeat recovery by them in a private civil action under s. 553.51 (1) or (2). Persons liable for pecuniary losses under this paragraph are the same as provided under s. 553.51 (3).
553.56 (1) Except as provided by sub. (2), no order may be entered by the division under s. 553.24, or 553.28 or 553.53 (2) without appropriate prior notice to all interested parties, opportunity for hearing and written findings of fact and conclusions of law.
553.58 (1) The division may make, amend and rescind any rules, forms and orders that are necessary to carry out this chapter, including rules and forms governing registration statements, applications registrations and reports, defining any terms, whether or not used in this chapter, insofar as the definitions are not inconsistent with this chapter. The division may define by rule false, fraudulent or deceptive practices in the offer and sale of franchises. The division may also adopt rules with regard to advertising utilized in connection with exempt sales under s. 553.22, 553.23 or 553.235 and which need not be filed under s. 553.53. For the purpose of rules and forms, the division may classify franchises, persons and matters within the division's jurisdiction, and may prescribe different requirements for different classes. Rules shall be made and published and all administrative procedures, including hearings under s. 553.56 and issuance of orders, shall be in accordance with ch. 227.
364, s. 63
553.59 of the statutes is amended to read:
553.59 Scope of chapter. (1) The provisions of this chapter concerning sales and offers to sell apply when a sale is made in this state or when an offer to sell is made in this state or when an offer to purchase is made and accepted in this state. The provisions concerning purchases and offers to purchase apply when a purchase or offer to purchase is made in this state or an offer to sell is made and or accepted in this state, except that s. 553.21 does not apply to an offer to sell that is not directed to, or received by, the offeree in this state.
(2) For the purpose of this section, an offer to sell or to purchase is made in this state, whether or not either party is then present in this state, when if the offer either originates from in this state or is directed by the offeror to this state and received by the offeree in this state, but for the purpose of s. 553.21, an offer to sell which is not directed to or received by the offeree in this state is not made in this state.
(3) For the purpose of this section, an offer to
purchase or to sell is accepted in this state when
if acceptance is communicated to the offeror in from this state, and has not previously been communicated to the offeror, orally or in writing, outside this state; and acceptance is communicated to the offeror in this state, whether or not either party is then present in this state, when the offeree directs it to the offeror in this state reasonably believing the offeror to be in this state and it is received by the offeror in this state.
(4) An offer to sell or to purchase is not made in this state when if the publisher circulates or there is circulated on the publisher's behalf in this state any bona fide newspaper or other publication of general, regular and paid circulation which that is not published in this state, or if a radio or television program originating that originates outside this state is received in this state.