Title 51 — Sales and Exchanges

This chapter must be known and may be cited as the Franchise Investment Law.

When used in this chapter, unless the context otherwise requires: 1. "Advertisement" means any written or printed communication by means of recorded telephone messages or spoken on radio, television, or similar communications media published in connection with an offer or sale of…

It is unlawful for any person to offer or sell any franchise in this state unless the offer of the franchise has been registered under this chapter or exempted under section 51-19-04.

1. There must be exempted from the provisions of section 51-19-03 the offer to sell, the offer to purchase, the sale, and the purchase of a franchise if the franchisor: a. Has a net worth on a consolidated basis according to its most recent audited financial statement of not less…

The commissioner may by order deny or revoke any exemption specified in section 51-19-04 with respect to the offer or sale of a specific franchise. No such order may be entered without appropriate prior notice to all interested parties, opportunity for hearing, and written findin…

The application for registration of an offer must be filed with the commissioner and must contain the following: 1. The name of the franchisor, the name under which the franchisor is doing or intends to do business, and the name of any parent or affiliated company that will engag…

1. Applications for registration, registration renewal statements, and amendments thereto must be signed and notarized by the franchisor or by the subfranchisor. 2. If the commissioner finds that it is necessary and appropriate for the protection of prospective franchisees or sub…

1. The application for registration must be accompanied by a proposed prospectus which must contain the material information set forth in the application for registration, as specified by rule of the commissioner, and such additional disclosures as the commissioner may require. 2…

1. The commissioner may summarily issue a stop order denying the effectiveness of any registration or of any exemption under section 51-19-05 if the commissioner finds: a. That there has been a failure to comply with any of the provisions of this chapter or the rules of the commi…

1. No person may publish in this state any advertisement offering a franchise subject to the registration requirements of this chapter unless a true copy of the advertisement has been filed with the office of the commissioner at least five business days prior to the first publica…

1. It is unlawful for any person knowingly to subscribe to or make or cause to be made any material false statement or representation in any application, financial statement, notice, report, or other document filed under any provision of this chapter or to omit to state any mater…

1. Any person who violates any provision of this chapter or any rule or order issued by the commissioner thereunder is liable to the franchisee or subfranchisor who may bring an action for damages, for rescission, or for such other relief as the court may deem appropriate. 2. Eve…

1. Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, the commissioner may bring an action in the name of the people of the stat…

1. Any person who willfully violates any provision of this chapter or who willfully violates any rule or order under this chapter is guilty of a class B felony. 2. Any person who willfully employs, directly or indirectly, any device, scheme, or artifice to defraud in connection w…

1. Every applicant for registration of an offer to sell franchises under this chapter, other than a domestic corporation or limited liability company, shall file with the commissioner in such form as the commissioner prescribes an irrevocable consent appointing the commissioner o…

1. Every franchisor or subfranchisor offering franchises for sale in this state shall at all times keep and maintain a complete set of books, records, and accounts of such sales, which must at all times be open to inspection by the commissioner, and shall make and file with the c…

1. This chapter must be administered by the commissioner. 2. a. The commissioner shall charge and collect the fees fixed by this section. All fees and charges collected under this section must be transmitted to the state treasurer and must be credited to the general fund. b. The …

Notwithstanding any other provision of law or any voluntary agreement between the United States department of labor and a franchisee, a franchisee or an employee of a franchisee is not considered an employee of the franchisor.