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The Oregon Administrative Rules contain OARs filed through July 15, 2014
 
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DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,
DIVISION OF FINANCE AND CORPORATE SECURITIES

 

DIVISION 325

FRANCHISES

441-325-0010

Definitions

All words and phrases in OAR chapter 441, division 325, have meaning given them in ORS 650.005.

Stat. Auth.: ORS 650
Stats. Implemented: ORS 650.005
Hist.: CC 17, f. 5-21-74, ef. 6-11-74; CC 20, f. 12-12-74, ef. 1-11-75; CC 28, f. 4-9-76, ef. 4-16-76; CC 9-1981, f. & ef. 11-23-81; Renumbered from 815-040-0050; FCS 17-1988(Temp), f. & cert. ef. 11-21-88; FCS 6-1989, f. & cert. ef. 5-17-89; FCS 5-2008, f. & cert. ef. 6-26-08

441-325-0020

Pre-Sale Disclosure Requirements

(1) No franchisor shall sell or offer to sell a franchise in this state unless the franchisor delivers to the prospective franchisee a disclosure document required by 16 CFR pt. 436.

(2) The franchisor must deliver the disclosure document and all proposed agreements relating to the sale of the franchise to the prospective franchisee at least 14 calendar days before the prospective franchisee executes any agreement with the franchisor relating to the sale of the franchise or at least 14 calendar days before the prospective franchisee tenders or is required to tender to the franchisor any consideration for the franchise including refundable deposits, whichever occurs first.

(3) Failure to timely provide the disclosure document and all proposed agreements required under this rule is a violation of ORS 650.020(1).

(4) Compliance with this rule shall not be construed to exempt any person engaged in the sale of a franchise in this state from making such other disclosures as are material.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 650.050
Stats. Implemented: ORS 650.020
Hist.: CC 17, f. 5-21-74, ef. 6-11-74; Renumbered from 815-040-0055; FCS 17-1988(Temp), f. & cert. ef. 11-21-88; FCS 6-1989, f. & cert. ef. 5-17-89; FCS 9-1994, f. & cert. ef. 8-1-94; FCS 1-1995(Temp), f. & cert. ef. 3-29-95; FCS 5-2008, f. & cert. ef. 6-26-08

441-325-0030

Exemptions to Disclosure Requirements

The sale of or offer to sell a franchise is exempt from OAR 441-325-0020 if any of the following circumstances apply:

(1) The sale or offer to sell is exempt or excluded from delivery of a disclosure document under 16 CFR ¦ 436.8(a).

(2) The sale or offer to sell is a renewal, extension, amendment or modification of an existing franchise agreement if there is:

(a) No interruption in the operation of the franchise relationship;

(b) No material change adverse to the franchisee in the franchise relationship; and

(c) No material change adverse to the franchisee in the disclosure information previously furnished to the franchisee.

(3) The sale or offer to sell is the sale of or offer to sell one or more additional franchises to an existing franchisee and the franchisor furnished a disclosure document to the franchisee in connection with the prior sale and there has been no material change adverse to the franchisee in the disclosure information previously furnished to the franchisee;

(4) The sale or offer to sell is a sale or offer to sell by a franchisee for the franchisee's own account of a franchise or an entire area franchise if:

(a) The sale or offer to sell is not effected by or through the franchisor. A sale is not effected by or through a franchisor merely because the franchisor has a right to approve or disapprove a different franchisee, requires the tender of a reasonable transfer fee, or requires appropriate documents executed;

(b) The franchisor does not aid in the sale;

(c) The sale is an isolated sale, and not a part of a plan of distribution of franchises; and

(d) At least 14 calendar days before the prospective purchaser executes any agreement with the franchisor relating to the sale, or tenders or is required to tender to the franchisee any consideration for the franchise or area franchise including any refundable deposit, whichever occurs first, the selling franchisee or subfranchisor has provided the prospective purchaser full access to the books, records, and disclosure documents of the franchise business.

(5) The sale or offer to sell is by a court appointed fiduciary or pursuant to a court order.

Stat. Auth.: ORS 650.050
Stats. Implemented: ORS 650.005, 650.020 & 650.050
Hist.: CC 17, f. 5-21-74, ef. 6-11-74; CC 9-1981, f. & ef. 11-23-81; Renumbered from 815-040-0060; FCS 17-1988(Temp), f. & cert. ef. 11-21-88; FCS 6-1989, f. & cert. ef. 5-17-89; FCS 5-2008, f. & cert. ef. 6-26-08

441-325-0040

Offer or Sale of Franchise

The offer or sale of a franchise by a franchisee for his own account or the offer or sale of the entire area franchise owned by a subfranchisor for his own account, is exempted from the provisions of ORS chapter 650 if sale is not effected by or through a franchisor, and the franchisor does not participate or aid in the sale thereof. A sale is not effected by or through a franchisor merely because a franchisor has a right to approve or disapprove a different franchisee.

Stat. Auth.: ORS 650.050
Stats. Implemented: ORS 650.005 & 650.020
Hist.: CC 17, f. 5-21-74, ef. 6-11-74; Renumbered from 815-040-0065; FCS 5-2008, f. & cert. ef. 6-26-08

441-325-0050

Relationship to Securities Law

A franchisor must meet the requirements of ORS 59.005 to 59.451, 59.991 and 59.995 if any part of a franchise offering may be considered a security.

Stat. Auth.: ORS 650.050
Stats. Implemented: ORS 59.015
Hist.: CC 17, f. 5-21-74, ef. 6-11-74; Renumbered from 815-040-0070; FCS 17-1988(Temp), f. & cert. ef. 11-21-88; FCS 6-1989, f. & cert. ef. 5-17-89; FCS 5-2008, f. & cert. ef. 6-26-08

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