815 ILCS 705/1
Short title
Short title. This Act may be cited as the Franchise Disclosure Act of 1987. (Source: P.A. 85-551; 86-1475.)
Illinois Compiled Statutes 815 ILCS 705 — Franchise Disclosure Act of 1987.
Illinois · statute · 815 ILCS 705 · 41 active provisions
815 ILCS 705/2
Findings and purpose
Findings and purpose. (1) The General Assembly finds and declares that the sale of franchises is a widespread business activity. Illinois residents have suffered substantial losses where franchisors or their representatives have not provided full and complete information regarding the franchisor-franchisee relationship…
815 ILCS 705/3
Definitions
Definitions. As used in this Act: (1) "Franchise" means a contract or agreement, either expressed or implied, whether oral or written, between two or more persons by which: (a) a franchisee is granted the right to engage in the business of offering, selling, or distributing goods or services, under a marketing plan or…
815 ILCS 705/4
Jurisdiction and venue
Jurisdiction and venue. Any provision in a franchise agreement that designates jurisdiction or venue in a forum outside of this State is void, provided that a franchise agreement may provide for arbitration in a forum outside of this State. (Source: P.A. 88-256.)
815 ILCS 705/5
Prohibited practices
Prohibited practices. (1) Sale of unregistered franchise unlawful. It is unlawful for any person to offer or sell any franchise required to be registered under this Act unless the franchise has been registered under this Act or is exempt under this Act. (2) Failure to deliver a disclosure statement unlawful. It is unla…
815 ILCS 705/6
Fraudulent practices
Fraudulent practices. In connection with the offer or sale of any franchise made in this State, it is unlawful for any person, directly or indirectly, to: (a) employ any device, scheme, or artifice to defraud; (b) make any untrue statement of a material fact or omit to state a material fact necessary in order to make t…
815 ILCS 705/7
Sale by franchisee and extension or renewal of existing franchise
Sale by franchisee and extension or renewal of existing franchise. There shall be exempted from the provisions of Sections 5, 10, 11, 13 and 15 of this Act the offer or sale of a franchise by a franchisee for its own account if the sale is not effected by or through a franchisor. A sale is not effected by or through a…
815 ILCS 705/8
Exemptions
Exemptions. (a) There shall be exempted, from the registration requirements of Section 10 of this Act, the offer and sale of a franchise if: (1) the franchisor has a net worth on a consolidated basis, according to its most recent audited financial statement, of not less than $15,000,000; or the franchisor has a net wor…
815 ILCS 705/9
Exemptions from disclosure statement and registration requirements granted by Administrator
Exemptions from disclosure statement and registration requirements granted by Administrator. The Administrator may by rule or order provide that any information required by Section 16 of this Act to be included in the disclosure statement need not be included in respect of any class of franchises if he finds that the r…
815 ILCS 705/10
Registration and Annual Report
Registration and Annual Report. No franchisor may sell or offer to sell a franchise in this State if (1) the franchisee is domiciled in this State or (2) the offer of the franchise is made or accepted in this State and the franchise business is or will be located in this State, unless the franchisor has registered the…
815 ILCS 705/11
Amendments
Amendments. Within 30 days after the close of each quarter of its fiscal year, the franchisor shall prepare revisions to its disclosure statement to reflect any material changes to disclosures included, or required to be included, in the disclosure statement. The franchisor shall deliver the amended disclosure statemen…
815 ILCS 705/12
Period of effectiveness
Period of effectiveness. The registration of a franchise and the disclosure statement used in connection therewith shall continue to be effective unless the Administrator issues an order suspending, terminating, prohibiting or denying the sale or registration of the franchise under this Act. (Source: P.A. 85-551.)
815 ILCS 705/14
Effect of registration
Effect of registration. The fact that a franchise has been registered by the Administrator is not a finding by the Administrator that the disclosure statement filed with the Administrator in connection with that registration is in any way true, accurate or complete in substance or on its face, or to be held to mean tha…
815 ILCS 705/15
Escrow of franchise fees; surety bonds; franchise fee deferrals
Escrow of franchise fees; surety bonds; franchise fee deferrals. If the Administrator finds that a franchisor 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 to be included in the es…
815 ILCS 705/16
Form and contents of disclosure statements
Form and contents of disclosure statements. The disclosure statement required under this Act shall be prepared in accordance with the Federal Trade Commission rule entitled Disclosure Requirements and Prohibitions Concerning Franchising, 16 C.F.R. Part 436, as it may be amended, the Guidelines promulgated by the North…
815 ILCS 705/17
Participation in trade associations
Participation in trade associations. It shall be an unfair franchise practice and a violation of this Act for a franchisor to in any way restrict any franchisee from joining or participating in any trade association. (Source: P.A. 85-551.)
815 ILCS 705/18
Discrimination
Discrimination. It shall be an unfair franchise practice and a violation of this Act for any franchisor to unreasonably and materially discriminate between franchisees operating a franchised business located in this State in the charges offered or made for franchise fees, royalties, goods, services, equipment, rentals…
815 ILCS 705/19
Termination of a Franchise
Termination of a Franchise. (a) It shall be a violation of this Act for a franchisor to terminate a franchise of a franchised business located in this State prior to the expiration of its term except for "good cause" as provided in subsection (b) or (c) of this Section. (b) "Good cause" shall include, but not be limite…
815 ILCS 705/20
Nonrenewal of a franchise
Nonrenewal of a franchise. It shall be a violation of this Act for a franchisor to refuse to renew a franchise of a franchised business located in this State without compensating the franchisee either by repurchase or by other means for the diminution in the value of the franchised business caused by the expiration of…
815 ILCS 705/21
Franchise Advisory Board
Franchise Advisory Board. There is created in the Office of the Administrator a Franchise Advisory Board. The Franchise Advisory Board shall consist of such members as the Administrator deems appropriate to advise him on franchising and franchise related matters. The members shall be persons who have knowledge and expe…
815 ILCS 705/22
Enforcement
Enforcement. (a) The Administrator may suspend, terminate, prohibit or deny the sale of any franchise or registration of any franchise or salesperson if it appears to him that: (1) there has been a failure to comply with any of the provisions of this Act or the rules or orders of the Administrator pertaining thereto; o…
815 ILCS 705/23
Hearings and notice of order suspending, terminating, prohibiting or denying sales or registration
Hearings and notice of order suspending, terminating, prohibiting or denying sales or registration. The Administrator may summarily issue an order prohibiting, suspending, terminating or denying the sale of a franchise or registration of a franchise or franchise broker if such order is within the public interest and Se…
815 ILCS 705/24
Civil penalties
Civil penalties. In lieu of any penalty provided pursuant to Section 25 of this Act, and in addition to an action pursuant to subsection (b) of Section 22 of this Act, the Administrator may bring an action in the name and on behalf of the people of the State against any person, trustee, manager or other officer or agen…
815 ILCS 705/25
Criminal prosecution
Criminal prosecution. Any person who willfully sells a franchise in this State without complying with Sections 5, 6, 10, 11, 13 or 15 of this Act or who in a disclosure statement or an amendment thereto willfully makes any false or misleading statement of a material fact or willfully omits to state any material fact re…
815 ILCS 705/26
Private civil actions
Private civil actions. Any person who offers, sells, terminates, or fails to renew a franchise in violation of this Act shall be liable to the franchisee who may sue for damages caused thereby. This amendatory Act of 1992 is intended to clarify the existence of a private right of action under existing law with respect…
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