SB414: Bill Text

SB414,3,3 (a) "Business opportunity enterprise" means a person or persons engaged in the business of offering business opportunity plans to, or entering into business opportunity plans with, purchasers.

SB414,3,6 (b) "Business opportunity plan" means an agreement under which a business opportunity enterprise sells or leases products to a purchaser after the business opportunity enterprise has made any of the following representations:

SB414,3,9 1. That the business opportunity enterprise may purchase any item made, grown, bred, modified, or developed by the purchaser using any of the products sold or leased under the business opportunity plan.

SB414,3,12 2. That the purchaser may earn an amount by selling or leasing the products subject to the business opportunity plan that is in excess of the purchaser's investment.

SB414,3,15 3. That there is a market for the product or anything made, grown, bred, modified, or developed by the purchaser using any of the products that are subject to the business opportunity plan.

SB414,3,18 (c) "Business opportunity plan group" means all of the purchasers who have entered into business opportunity plans with the same business opportunity enterprise to purchase the same product under the same terms and conditions.

SB414,3,19 (d) "Products" means goods, services, or training or any combination thereof.

SB414,3,21 (e) "Purchaser" means a person who is solicited to enter into or who enters into a business opportunity plan with a business opportunity enterprise.

SB414,3,24 (f) "Purchaser's investment" means any consideration given by or on behalf of the purchaser to a business opportunity enterprise to buy or lease products that are subject to a business opportunity plan.

SB414,4,3 (2) Registration requirements. No business opportunity enterprise or its employee or agent may offer or enter into, in this state, any business opportunity plan unless all of the following apply:

SB414,4,6 (a) The business opportunity enterprise has registered the business opportunity plan with the department at least 30 days before offering the business opportunity plan. The registration shall include the following information:

SB414,4,10 1. The official name, address, and places of business of the business opportunity enterprise. If the business opportunity enterprise is a partnership, limited liability company, or association, the name and address of each member. If the business opportunity enterprise is a corporation, the name and address of each of its officers.

SB414,4,11 2. A copy of the articles of incorporation, if applicable.

SB414,4,13 3. The name under which the business opportunity enterprise intends to do business.

SB414,4,16 4. Any trademarks, trade names, service marks, advertising symbols, or other commercial symbols that identify the products to be sold or leased under the business opportunity plan.

SB414,4,20 5. The name of any business opportunity plan in which the business opportunity enterprise has been involved within the 5 years immediately before the date on which the business opportunity enterprise submits the registration to the department.

SB414,4,21 6. A factual description of the business opportunity plan.

SB414,4,24 7. A statement specifying the amount that the purchaser must pay to the business opportunity enterprise as the purchaser's investment in order to enter into the business opportunity plan.

SB414,5,3 8. A statement specifying any amounts, in addition to the purchaser's investment, that the purchaser must pay to the business opportunity enterprise under the business opportunity plan.

SB414,5,6 9. A record of any conviction, civil order or judgment, administrative order, or other legal proceeding that relates to or affects the business practices of the business opportunity enterprise.

SB414,5,7 10. Any other information required by the department by rule.

SB414,5,9 (b) The business opportunity enterprise files a bond or other security with the department as required under sub. (2m).

SB414,5,12 (c) The business opportunity enterprise pays a registration fee of $300 for the business opportunity plan being registered, unless the department by rule establishes a different amount.

SB414,5,16 (2m) Bond or surety requirements. (a) Except as provided in par. (b), the department shall require, for purposes of sub. (2) (b), a continuous surety bond payable to the department, on a form approved by the department and endorsed by a surety company licensed to do business in this state.

SB414,5,19 (b) The department may promulgate rules changing or eliminating any of the requirements under par. (a) relating to the type of security, the type of form used, or the qualifications of surety companies.

SB414,5,22 (c) The department shall set the bond or other security to be filed under sub. (2) (b) in an amount that is equal to at least $75,000, unless the department by rule sets a different minimum amount.

SB414,6,2 (3) Disclosure requirements. (a) If a business opportunity enterprise or its employee or agent makes any statement concerning the amount or range of earnings or receipts that may be made by a purchaser under a business opportunity plan, the business opportunity enterprise or its employee or agent shall provide a written disclosure that reads as follows:

SB414,6,3 Disclosure

SB414,6,8 No guarantee of earning or range of earnings through this business opportunity plan can be made. The number of purchasers who have earned, through this business opportunity plan, an amount in excess of the amount of their purchasers' investments is at least ...., which represents ....% of the total number of purchasers of the business opportunity plan.

SB414,6,11 (b) Before providing a written disclosure under par. (a), the business opportunity enterprise or its employee or agent shall enter the appropriate calculations on the blanks on the disclosure.

SB414,6,14 (3m) Applicability. This section applies only to business opportunity plans that are offered or entered into by business opportunity enterprises or by their employees or agents to which any of the following applies:

SB414,6,17 (a) The business opportunity enterprise has entered into 5 or more business opportunity plans within the 24 months immediately before the date of the offer of the business opportunity plan.

SB414,6,21 (b) The business opportunity enterprise or its employee or agent represents that the business opportunity enterprise has entered into 5 or more business opportunity plans within the 24 months immediately before the date of the offer of the business opportunity plan.

SB414,6,25 (c) The business opportunity enterprise or its employee or agent represents that the business opportunity enterprise intends to offer 5 or more business opportunity plans during the 12 months immediately following the date of the offer of the business opportunity plan.

SB414,7,1 (4) Exemptions. This section does not apply to any of the following:

SB414,7,2 (a) Any sale or lease of any security, as defined in s. 551.02 (13).

SB414,7,3 (b) Any sale or lease of any franchise, as defined in s. 553.03 (4).

SB414,7,6 (c) Any transaction, as defined in s. 452.01 (10), in which the business opportunity enterprise or its employee or agent or the purchaser is licensed or registered under ch. 452.

SB414,7,7 (d) Any school or program approved by the educational approval board.

SB414,7,11 (e) A license granted by a business opportunity enterprise that allows the purchaser to sell or lease products to the general public under the trademark, trade name, or service mark of the business opportunity enterprise if all of the following apply:

SB414,7,14 1. The business opportunity enterprise has been doing business in this state continually for 5 years immediately before the date on which the license is to be granted.

SB414,7,16 2. The business opportunity enterprise sells or leases directly to the general public the same products that are purchased or leased by the purchaser.

SB414,7,21 3. During the 12 months immediately before the date on which the license is to be granted, the amount of gross receipts from sales and leases of the products made directly to the general public by all of the purchasers who are part of a business opportunity plan group equaled at least 50% of the total fair market value of the products that were sold or leased to those purchasers.

SB414,7,22 (f) A newspaper distribution system, as defined by the department by rule.

SB414,8,2 (g) A sale in its entirety of a business that sells or leases products that are subject to a business opportunity plan, but that, for at least 6 months immediately before the date on which the business opportunity plan became effective, had been operated from a particular location, had been open for business to the general public, and had sold or leased all of the products from that location.

SB414,8,4 (h) A sale or lease, or an offer to sell or lease, to a purchaser who has done all of the following:

SB414,8,8 1. Bought or acquired by lease products, for a period of at least 6 months before the date on which the business opportunity plan becomes effective, that were either produced by the business opportunity enterprise or that had the same trademark, trade name, or service mark as the products under the business opportunity plan.

SB414,8,11 2. Received in reselling or releasing the products specified in subd. 1. a gross amount that is at least equal to the purchaser's investment for the business opportunity plan.

SB414,8,15 (5) Remedies and penalties. (a) Any person suffering pecuniary loss because of a violation of this section or any rule promulgated under this section may sue for damages and shall recover twice the amount of such pecuniary loss, together with costs, including reasonable attorney fees.

SB414,8,20 (b) 1. The department may commence an action in the name of the state to restrain the violation of this section or any rule promulgated under this section. The court may, before the entry of final judgment, make such orders or judgments as may be necessary to restore any pecuniary loss suffered by any person because of the violation of this section or any rule promulgated under this section.

SB414,8,22 2. The department may use its authority under ss. 93.14 to 93.16 to investigate violations of any order issued under this paragraph.

SB414,8,25 3. The court may order a person who commits a violation of this section or the rules promulgated under this section to pay the reasonable and necessary costs of investigation and of prosecution, including attorney fees, related to the violation.

SB414,9,4 (c) Any person who violates this section or any rule promulgated under this section shall forfeit not less than $100 nor more than $10,000 for each violation. The department or any district attorney may commence an action in the name of the state to recover a forfeiture under this paragraph.

SB414,9,7 (d) Any person who violates this section or any rule promulgated under this section with intent to defraud another may be fined, for each violation, not more than $5,000 or imprisoned for not more than 5 years or both.

SB414,9,8 (End)