SB580, s. 8 18Section 8. 553.235 (1) (intro.) of the statutes is amended to read:
SB580,3,2119 553.235 (1)Conditions of exemption. (intro.) Except as provided in sub. (2),
20a registration exemption is available for the offer or sale of a franchise that meets all
21of the following conditions:
SB580, s. 9 22Section 9. 553.235 (2) (a) of the statutes is amended to read:
SB580,3,2523 553.235 (2) (a) The exemption under sub. (1) is not available for the offer or sale
24of a franchise in which the franchisee would be a motor vehicle dealer or a motor
25vehicle distributor or wholesaler, as defined in s. 218.01 (1).
SB580, s. 10
1Section 10. 553.24 (1) of the statutes, as affected by 1995 Wisconsin Act 27,
2is amended to read:
SB580,4,53 553.24 (1) The division may by order deny or revoke any exemption under s.
4553.22, 553.23, 553.235 or 553.25 with respect to the offer or sale of a franchise for
5any of the grounds specified in s. 553.28 (1).
SB580, s. 11 6Section 11. 553.24 (2) of the statutes, as affected by 1995 Wisconsin Act 27,
7is amended to read:
SB580,4,108 553.24 (2) If the public interest and the protection of investors so require, the
9division may, by order, summarily deny or revoke any exemption under s. 553.22,
10553.23, 553.235 or 553.25 with respect to the offer or sale of a franchise.
SB580, s. 12 11Section 12. 553.24 (4) (intro.) of the statutes, as affected by 1995 Wisconsin
12Act 27
, is amended to read:
SB580,4,1513 553.24 (4) (intro.) A person who offers or sells a franchise pursuant to an
14exemption under s. 553.22, 553.23, 553.235 or 553.25 after the exemption is denied
15or revoked by an order of the division does not violate s. 553.21 if:
SB580, s. 13 16Section 13. 553.24 (6) of the statutes, as affected by 1995 Wisconsin Act 27,
17is amended to read:
SB580,4,2418 553.24 (6) Within 10 days after the filing date of the information required
19under s. 553.22 or
an application for an exemption under s. 553.25, the division may
20require that additional information be filed if the division determines that the
21information is reasonably necessary to establish an exemption under s. 553.22 or
22553.25. If the division requires additional information, the exemption is not effective
23until 10 days after the additional information is filed with the division, unless a
24shorter period is permitted by the division.
SB580, s. 14
1Section 14. 553.25 of the statutes, as affected by 1995 Wisconsin Act 27, is
2amended to read:
SB580,5,5 3553.25 Exemption by division. The division may by rule or order exempt
4from registration under s. 553.21 any offer or sale of a franchise if registration is not
5necessary or appropriate in the public interest or for the protection of investors.
SB580, s. 15 6Section 15. 553.26 (title) of the statutes is amended to read:
SB580,5,7 7553.26 (title) Application for registration Registration by notification.
SB580, s. 16 8Section 16. 553.26 (intro.) of the statutes is repealed.
SB580, s. 17 9Section 17. 553.26 (1) to (3) of the statutes are repealed and recreated to read:
SB580,5,1910 553.26 (1) A person who wishes to sell a franchise in this state that is not
11excluded under s. 553.22 and that is not exempt from registration under s. 553.23,
12553.235 or 553.25 shall register the franchise by notification to the division. The
13notification shall be on a form prescribed by the division, which need include only the
14name of the franchisor or subfranchisor, the name or names under which the
15franchisor or subfranchisor intends to do business and the franchisor's or
16subfranchisor's principal business address. Nothing other than a copy of the offering
17circular required under s. 553.27(4), the consent to service of process required by s.
18553.27 (10), if it is not already on file with the division, and the registration fee
19required under s. 553.72 (1) need accompany the notification.
SB580,5,20 20(2) A franchisor may register only one franchise system on each notification.
SB580,5,22 21(3) Registration is effective upon receipt of the notification by the division. The
22notice shall be effective for one year from the date on which the division receives it.
SB580, s. 18 23Section 18. 553.26 (4) of the statutes, as affected by 1995 Wisconsin Act 27,
24is repealed and recreated to read:
SB580,6,3
1553.26 (4) Upon receipt of notification, the division shall endorse upon the
2notice "received" and the date and shall return a copy to the person who filed the
3notice.
SB580, s. 19 4Section 19. 553.26 (4m) of the statutes is created to read:
SB580,6,85 553.26 (4m) A person who has complied with sub. (1) need not file with the
6division, during the period when the registration is effective, any more information,
7including any amendments to the offering circular. The division may not review the
8offering circular for the adequacy of its disclosure.
SB580, s. 20 9Section 20. 553.26 (5) and (6) of the statutes are repealed.
SB580, s. 21 10Section 21. 553.26 (7) of the statutes, as affected by 1995 Wisconsin Act 27,
11is repealed.
SB580, s. 22 12Section 22. 553.26 (8) to (17) of the statutes are repealed.
SB580, s. 23 13Section 23. 553.26 (18) of the statutes, as affected by 1995 Wisconsin Act 27,
14is repealed.
SB580, s. 24 15Section 24. 553.26 (19) of the statutes is repealed.
SB580, s. 25 16Section 25. 553.26 (20) of the statutes, as affected by 1995 Wisconsin Act 27,
17is repealed.
SB580, s. 26 18Section 26. 553.26 (21) of the statutes is repealed.
SB580, s. 27 19Section 27. 553.26 (22) of the statutes is repealed.
SB580, s. 28 20Section 28. 553.27 (title) of the statutes is amended to read:
SB580,6,22 21553.27 (title) General registration provisions; offering circular;
22consent to service of process
.
SB580, s. 29 23Section 29. 553.27 (1) of the statutes is repealed.
SB580, s. 30 24Section 30. 553.27 (2) and (3) of the statutes, as affected by 1995 Wisconsin
25Act 27
, are repealed.
SB580, s. 31
1Section 31. 553.27 (4) of the statutes, as affected by 1995 Wisconsin Act 27,
2is amended to read:
SB580,7,103 553.27 (4) No franchise subject to registration under this chapter may be sold
4in this state unless a copy of the an offering circular in the form prescribed by rule
5of the division
is provided to the prospective franchisee at least 10 business days
6prior to the execution by the prospective franchisee of any binding franchise or other
7agreement or at least 10 business days prior to the receipt of any consideration,
8whichever first occurs. The offering circular may be in a form that the division
9requires by rule, in a form permitted under 16 CFR 436 or in a form permitted by a
10successor to that regulation.
SB580, s. 32 11Section 32. 553.27 (5) of the statutes is repealed.
SB580, s. 33 12Section 33. 553.27 (6) of the statutes, as affected by 1995 Wisconsin Act 27,
13is repealed.
SB580, s. 34 14Section 34. 553.27 (7) of the statutes, as affected by 1995 Wisconsin Act 27,
15is repealed.
SB580, s. 35 16Section 35. 553.27 (8) of the statutes, as affected by 1995 Wisconsin Act 27,
17is repealed.
SB580, s. 36 18Section 36. 553.27 (9) of the statutes, as affected by 1995 Wisconsin Act 27,
19is repealed.
SB580, s. 37 20Section 37. 553.27 (10) of the statutes, as affected by 1995 Wisconsin Act 27,
21is amended to read:
SB580,8,1222 553.27 (10) Every applicant for registration of an offer to sell franchises under
23this chapter
franchisor who files a notification shall file with the division, in such the
24form as that the division by rule prescribes, an irrevocable consent appointing the
25division to be the applicant's attorney to receive service of any lawful process in any

1civil action against the applicant or the applicant's successor, executor or
2administrator, which that arises under this chapter or any rule or order under this
3chapter after the consent has been filed, with the same force and validity as if served
4personally on the person filing the consent. A person who has filed a consent in
5connection with a previous registration or exemption under this chapter need not file
6another. Service may be made by leaving a copy of the process in the office of the
7division but it is not effective unless the plaintiff, who may be the division in an action
8instituted by the division, forthwith sends notice of the service and a copy of the
9process by registered or certified mail to the defendant or respondent at his or her
10last address on file with the division, and the plaintiff's affidavit of compliance with
11this subsection is filed in the case on or before the return day of the process, if any,
12or within such further the time as that the court allows.
SB580, s. 38 13Section 38. 553.27 (11) of the statutes, as affected by 1995 Wisconsin Act 27,
14is repealed.
SB580, s. 39 15Section 39. 553.28 (title) of the statutes is amended to read:
SB580,8,17 16553.28 (title) Denial, suspension or revocation of registrations or
17exemptions
.
SB580, s. 40 18Section 40. 553.28 (1) (intro.) of the statutes, as affected by 1995 Wisconsin
19Act 27
, is amended to read:
SB580,8,2220 553.28 (1) (intro.) The division may issue an order denying effectiveness to, or
21postponing,
suspending or revoking the effectiveness of, any registration statement
22if the division finds any of the following:
SB580, s. 41 23Section 41. 553.28 (1) (b) of the statutes is amended to read:
SB580,9,3
1553.28 (1) (b) That the offer, purchase or sale of the franchise would constitute
2misrepresentation to, or deceit or fraud upon, purchasers thereof, or of the franchise,
3has worked or tended to work a fraud upon purchasers or would so operate.
SB580, s. 42 4Section 42. 553.28 (1) (d) of the statutes is amended to read:
SB580,9,115 553.28 (1) (d) That any person identified in an application for registration the
6franchisor's offering circular
has been convicted of an offense specified under s.
7553.26 (5)
that is required to be disclosed in the offering circular, or is subject to an
8order, or has had a civil judgment entered against him or her as described in s. 553.26
9(5)
that is required to be disclosed in the offering circular, and the involvement of the
10person in the same sale or management of the franchise creates an unreasonable risk
11to prospective franchisees.
SB580, s. 43 12Section 43. 553.28 (1) (e) of the statutes, as affected by 1995 Wisconsin Act 27,
13is amended to read:
SB580,9,1614 553.28 (1) (e) That the applicant or registrant franchisor has failed to pay the
15proper filing fee;, but the division may enter only a denial order under this paragraph
16and the division
shall vacate any such order when the deficiency has been corrected.
SB580, s. 44 17Section 44. 553.28 (1) (f) of the statutes is repealed.
SB580, s. 45 18Section 45. 553.28 (2) of the statutes, as affected by 1995 Wisconsin Act 27,
19is amended to read:
SB580,9,2220 553.28 (2) If the public interest and the protection of investors so require, the
21division may by order summarily deny, postpone, suspend or revoke the effectiveness
22of the registration.
SB580, s. 46 23Section 46. 553.29 of the statutes, as affected by 1995 Wisconsin Act 27, is
24repealed.
SB580, s. 47
1Section 47. 553.30 of the statutes, as affected by 1995 Wisconsin Act 27, is
2repealed.
SB580, s. 48 3Section 48. 553.31 of the statutes, as affected by 1995 Wisconsin Act 27, is
4repealed.
SB580, s. 49 5Section 49. 553.41 (1) of the statutes, as affected by 1995 Wisconsin Act 27,
6is amended to read:
SB580,10,137 553.41 (1) No person may make or cause to be made, in any document filed with
8the division or in any proceeding under this chapter, any statement which is, at the
9time and in the light of the circumstances under which it is made, false or misleading
10in any material respect or, in connection with any statement required to be made
11under s. 553.31 (1), omit to state a material fact necessary in order to make the
12statement made, in the light of the circumstances under which they are made, not
13misleading
.
SB580, s. 50 14Section 50. 553.41 (3) of the statutes is amended to read:
SB580,10,1915 553.41 (3) No person may offer, purchase or sell a franchise in this state by
16means of any written or oral communication not included in sub. (1) which (4) that
17includes an untrue statement of a material fact or omits to state a material fact
18necessary in order to make the statements made, in the light of the circumstances
19under which they were made, not misleading.
SB580, s. 51 20Section 51. 553.41 (4) of the statutes is amended to read:
SB580,10,2421 553.41 (4) No person may make any untrue statement of a material fact in any
22statement required to be disclosed in writing in a timely manner pursuant to s.
23553.22 or
under s. 553.27 or omit to state in any such statement any material fact
24which that is required to be stated therein in the statement.
SB580, s. 52
1Section 52. 553.41 (5) of the statutes, as affected by 1995 Wisconsin Act 27,
2is amended to read:
SB580,11,93 553.41 (5) No person may wilfully represent to any prospective purchaser or
4seller of a franchise
franchisee in this state that the filing of a franchise registration
5application or the registration of a franchise constitutes a finding by the division that
6any document filed under this chapter is true, complete, and not misleading, or in
7relation to an exemption or exception,
that the division has passed in any way upon
8the merits of any franchise or wilfully represent in a similar manner that a franchise
9is registered or exempted when in fact, such that is not the case.
SB580, s. 53 10Section 53. 553.51 (title) of the statutes is amended to read:
SB580,11,11 11553.51 (title) Civil liability; offer or sale in violation.
SB580, s. 54 12Section 54. 553.51 (1) of the statutes is amended to read:
SB580,11,2013 553.51 (1) Any person who offers, purchases or sells a franchise in violation of
14s. 553.21 or 553.41 (1), (2), (4) or (5) 553.27 (4), if the violation was material in the
15franchisee's or subfranchisee's decision to purchase the franchise,
shall be liable to
16the franchisee or subfranchisor, who may bring an action for rescission , unless, in the
17case of a violation of s. 553.41 (1), (2), (4) or (5), the defendant proves that the plaintiff
18knew the facts concerning the untruth or omission, or that the defendant exercised
19reasonable care and did not know, or, if the defendant had exercised reasonable care,
20would not have known, of the untruth or omission
.
SB580, s. 55 21Section 55. 553.51 (2) of the statutes is amended to read:
SB580,12,422 553.51 (2) Any person who violates s. 553.41 (3) shall be, (4) or (5) is liable for
23damages
to any person who does not knowing know or having have cause to believe
24that such the statement or representation was false or misleading and who, while
25relying upon such the statement, shall have sold or representation, purchased a

1franchise, for damages, unless the defendant proves that the plaintiff knew the facts
2concerning the untruth or omission or that the defendant exercised reasonable care
3and did not know, or if the defendant had exercised reasonable care would not have
4known, of the untruth or omission.
SB580, s. 56 5Section 56. 553.51 (4) of the statutes, as affected by 1995 Wisconsin Act 27,
6is amended to read:
SB580,12,137 553.51 (4) No action may be maintained to enforce any liability under this
8section unless it is brought before the expiration of 3 years after the act or transaction
9constituting the violation upon which the liability is based, the expiration of one year
10after the discovery by the franchisee of the fact that constitutes the violation
or 90
11days after delivery to the franchisee of a written notice disclosing that discloses any
12violation of s. 553.21 or 553.41, which notice shall be approved as to form by this
13chapter and that is filed with
the division, whichever first expires.
SB580, s. 57 14Section 57. 553.52 (1) of the statutes is amended to read:
SB580,12,2315 553.52 (1) Any person who wilfully violates any provision of this chapter except
16s. 553.41 (1), or any rule under this chapter, (2) to (5) or any order of which the person
17has notice, or who violates s. 553.41 (1) knowing or having reasonable cause to
18believe either that the statement made was false or misleading in any material
19respect or that the failure to report a material event under s. 553.31 (1) was false or
20misleading in any material respect
, may be fined not more than $5,000 or imprisoned
21for not more than 5 years or both. Each of the acts specified shall constitute is a
22separate offense, and a prosecution or conviction for any one of those offenses shall
23does not bar prosecution or conviction for any other offense.
SB580, s. 58 24Section 58. 553.52 (2) of the statutes is amended to read:
SB580,13,6
1553.52 (2) Any person who employs, directly or indirectly, any device, scheme
2or artifice to defraud in connection with the offer or sale of any franchise or engages,
3directly or indirectly, in any act, practice, or course of business which operates or
4would operate as a fraud or deceit upon any person in connection with the offer,
5purchase
or sale of any franchise shall be fined not more than $5,000 or imprisoned
6for not more than 5 years, or both.
SB580, s. 59 7Section 59. 553.53 of the statutes, as affected by 1995 Wisconsin Act 27, is
8repealed.
SB580, s. 60 9Section 60. 553.56 (1) of the statutes, as affected by 1995 Wisconsin Act 27,
10is amended to read:
SB580,13,1411 553.56 (1) Except as provided by sub. (2), no order may be entered by the
12division under s. 553.24, or 553.28 or 553.53 (2) without appropriate prior notice to
13all interested parties, opportunity for hearing and written findings of fact and
14conclusions of law.
SB580, s. 61 15Section 61. 553.58 (1) of the statutes, as affected by 1995 Wisconsin Act 27,
16is amended to read:
SB580,14,417 553.58 (1) The division may make, amend and rescind any rules, forms and
18orders that are necessary to carry out this chapter, including rules and forms
19governing registration statements, applications registrations and reports, defining
20any terms, whether or not used in this chapter, insofar as the definitions are not
21inconsistent with this chapter. The division may define by rule false, fraudulent or
22deceptive practices in the offer and sale of franchises. The division may also adopt
23rules with regard to advertising utilized in connection with exempt sales under s.
24553.22, 553.23 or 553.235 and which need not be filed under s. 553.53.
For the
25purpose of rules and forms, the division may classify franchises, persons and matters

1within the division's jurisdiction, and may prescribe different requirements for
2different classes. Rules shall be made and published and all administrative
3procedures, including hearings under s. 553.56 and issuance of orders, shall be in
4accordance with ch. 227.
SB580, s. 62 5Section 62. 553.58 (3) of the statutes, as affected by 1995 Wisconsin Act 27,
6is repealed.
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