Section 409.1003

Title XXVI TRADE AND COMMERCE

Chapter 409

Effective - 28 Aug 2000   

  409.1003.  Practices prohibited — penalty. — 1.  A business opportunity seller shall not:

  (1)  Misrepresent, by failure to disclose or otherwise, the known required total investment for such business opportunity;

  (2)  Misrepresent or fail to disclose efforts to sell or establish more franchises or distributorships than it is reasonable to expect the market or market area for the particular business opportunity to sustain;

  (3)  Misrepresent the quantity or the quality of the products to be sold or distributed through the business opportunity;

  (4)  Misrepresent the training and management assistance available to the business opportunity purchaser;

  (5)  Misrepresent the amount of profits, net or gross, which the franchisee can expect from the operation of the business opportunity;

  (6)  Misrepresent, by failure to disclose or otherwise, the termination, transfer or renewal provision of a business opportunity agreement;

  (7)  Falsely claim or imply that a primary marketer or trademark of products or services sponsors or participates directly or indirectly in the business opportunity;

  (8)  Assign a so-called exclusive territory encompassing the same area to more than one business opportunity purchaser;

  (9)  Provide machines or display of a brand or kind substantially different from and inferior to those promised by the business opportunity seller;

  (10)  Fail to provide the purchaser a written contract;

  (11)  Misrepresent the seller's ability or the ability of a person or entity providing services as defined in subdivision (1) of subsection 1 of section 409.1000 to provide locations or assist the purchaser in finding locations expected to have a positive impact on the success of the business opportunity;

  (12)  Misrepresent a material fact or create a false or misleading impression in the sale of a business opportunity.

  2.  Any person who violates the provisions of this section is guilty of a class A misdemeanor.

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(L. 2000 S.B. 896 § 407.2015)