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CHAPTER 553
WISCONSIN FRANCHISE INVESTMENT LAW
SUBCHAPTER I
TITLE AND DEFINITIONS
553.01   Short title.
553.03   Definitions.
SUBCHAPTER II
REGISTRATION OF FRANCHISES
553.21   Registration requirement.
553.22   Excluded franchises.
553.23   Private franchisee and subfranchisor sales exempted.
553.235   Experienced franchisee exempt transactions.
553.24   Exemption proceedings.
553.25   Exemption by division.
553.26   Registration by notification.
553.27   General registration provisions; offering circular; consent to service of process.
553.28   Denial, suspension or revocation of registrations.
553.31   Amendment to registration statement.
SUBCHAPTER III
FRAUDULENT AND PROHIBITED PRACTICES
553.41   Fraudulent and prohibited practices.
SUBCHAPTER IV
ENFORCEMENT AND GENERAL PROVISIONS
553.51   Civil liability; sale in violation.
553.52   Criminal penalties.
553.54   Injunctions.
553.55   Investigations and subpoenas.
553.56   Hearings and judicial review.
553.57   Enforcement of criminal penalties.
553.58   Rules, forms and orders.
553.59   Scope of chapter.
553.60   Miscellaneous powers.
553.605   Administrative assessments; investor education.
SUBCHAPTER V
ADMINISTRATION
553.71   Administration.
553.72   Fees and expenses.
553.73   Service of process.
553.74   Open records; publication.
553.75   Administrative files and opinions.
553.76   Waivers of compliance void.
553.78   Preemption.
subch. I of ch. 553 SUBCHAPTER I
TITLE AND DEFINITIONS
553.01 553.01 Short title. This chapter shall be known and may be cited as the "Wisconsin Franchise Investment Law".
553.01 History History: 1971 c. 241.
553.01 Annotation Protection for consumers against unfair and deceptive business. Jeffries, 57 MLR 559.
553.01 Annotation The Wisconsin franchise investment law. Mett, 1972 WBB No. 5.
553.01 Annotation Avoiding the Accidental Franchise. Modell & Fittante. Wis. Law. May 2003.
553.03 553.03 Definitions. In this chapter:
553.03(2) (2) "Area franchise" means any contract or agreement between a franchisor and a subfranchisor whereby the subfranchisor is granted the right, for consideration given in whole or in part for such right, to sell or negotiate the sale of franchises in the name or on behalf of the franchisor.
553.03(3) (3) "Division" means the division of securities.
553.03(4) (4)
553.03(4)(a)(a) "Franchise" means a contract or agreement, either express or implied, whether oral or written, between 2 or more persons by which:
553.03(4)(a)1. 1. A franchisee is granted the right to engage in the business of offering, selling or distributing goods or services under a marketing plan or system prescribed or suggested in substantial part by a franchisor; and
553.03(4)(a)2. 2. The operation of the franchisee's business pursuant to such plan or system is substantially associated with the franchisor's business and trademark, service mark, trade name, logotype, advertising or other commercial symbol designating the franchisor or its affiliate; and
553.03(4)(a)3. 3. The franchisee is required to pay, directly or indirectly, a franchise fee.
553.03(4)(b) (b) Unless specifically stated otherwise, "franchise" includes area franchise.
553.03(5) (5) "Franchisee" means a person to whom a franchise is granted.
553.03(5m) (5m) "Franchise fee" means any fee or charge that a franchisee or subfranchisor is required to pay or agrees to pay for the right to enter into a business under a franchise agreement, including, but not limited to, any such payment for goods and services. The following shall not be considered the payment of a "franchise fee":
553.03(5m)(a) (a) The purchase or agreement to purchase goods at a bona fide wholesale price. The division may issue rules defining wholesale transactions exempt under this paragraph.
553.03(5m)(b) (b) The payment of a reasonable service charge to the issuer of a credit card by an establishment accepting or honoring such credit card.
553.03(5m)(c) (c) Amounts paid in connection with trading stamp promotions permitted under s. 100.15 by a person issuing trading stamps in connection with the retail sale of merchandise or service.
553.03(5m)(d) (d) Any other consideration which the division by rule excludes from "franchise fee".
553.03(6) (6) "Franchisor" means a person who grants a franchise.
553.03(8) (8) "Fraud" and "deceit" are not limited to common law fraud or deceit.
553.03(8g) (8g) "Notification" means notification under s. 553.26.
553.03(8r) (8r) "Offer to sell" includes every attempt to offer to dispose of, or solicitation of an offer to buy, a franchise or interest in a franchise for value. This term does not include the renewal or extension of an existing franchise where there is no interruption in the operation of the franchised business by the franchisee.
553.03(9) (9) "Order" means every direction or determination of the division designated an order and made in writing by the division, except a rule as defined under s. 227.01 (13).
553.03(11) (11) "Sale" or "sell" includes every contract or agreement of sale of, contract to sell, or disposition of, a franchise or interest in a franchise for value. This term does not include the renewal or extension of an existing franchise where there is no interruption in the operation of the franchised business by the franchisee.
553.03(12) (12) "Subfranchisor" means a person to whom an area franchise is granted.
553.03 Cross-reference Cross-reference: See also s. DFI-Sec 31.01, Wis. adm. code.
553.03 Annotation Service stations leased to their operators under agreements under which the rent was based on the amount of gasoline sold were not franchises subject to the Wisconsin Franchise Investment Law. Clark Oil & Refining Corp. v. Leistikow, 69 Wis. 2d 226, 230 N.W.2d 736 (1975).
553.03 Annotation Franchise tie-ins and antitrust; a critical analysis. Boer. 1973 WLR 847.
subch. II of ch. 553 SUBCHAPTER II
REGISTRATION OF FRANCHISES
553.21 553.21 Registration requirement. No person may sell in this state any franchise unless the franchise has been registered under this chapter or is exempted under s. 553.23, 553.235 or 553.25.
553.21 History History: 1971 c. 241; 1981 c. 54 ss. 1, 32; 1987 a. 381; 1989 a. 56 s. 259; 1995 a. 364.
553.21 Cross-reference Cross-reference: See also s. DFI-Sec 32.05, Wis. adm. code.
553.21 Annotation A franchisor who illegally sold a franchise had no right to set off the value of "benefits conferred" upon the franchisee against the franchisor's liability for its illegal actions. Hiltpold v. T-Shirts Plus, Inc. 98 Wis. 2d 711, 298 N.W.2d 217 (Ct. App. 1980).
553.21 Annotation Failure to register an offer of franchises under this section affords only an action for rescission and does not add any additional rights over what a plaintiff has under the law of equity. Lulling v. Barnaby's Family Inns, Inc. 499 F. Supp. 1353 (1980).
553.22 553.22 Excluded franchises. This chapter does not apply to the offer or sale of the following franchises:
553.22(1) (1) Any relationship if the person described in the offer as a franchisee, or any of the current directors or executive officers of that person, has been in the type of business of the franchise relationship for more than 2 years and the parties anticipated, or should have anticipated, at the time the agreement establishing the franchise relationship was reached, that the sales arising from the relationship would account for no more than 20% of the gross sales revenue of the franchisee for a period of at least one year after the franchisee begins selling the goods or services involved in the franchise.
553.22(2) (2) An association of producers of agricultural products authorized by 7 USC 291.
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2011-12 Wisconsin Statutes updated though 2013 Wis. Act 380 and all Supreme Court Orders entered before June 30, 2014. Published and certified under s. 35.18. Changes effective after July 1, 2014 are designated by NOTES. (Published 7-1-14)