HB 3977

Abstract

Amends the Business Brokers Act of 1995. Exempts any franchise seller as defined in the Federal Trade Commission rule entitled Disclosure Requirements and Prohibitions Concerning Franchising, as it may be amended, from the registration requirements and other duties imposed under the Act (rather than exempting persons registered under the Illinois Franchise Disclosure Act of 1987 from the Act's requirements as to (1) offers and sales in connection with franchising activities or (2) assisting their franchisees in the offer or sale of a franchise). Amends the Business Opportunity Sales Law of 1995. Provides that a seller of a business opportunity that is defined as a franchise under the Franchise Disclosure Act of 1987 is exempt from registering certain disclosure documents if the seller delivers either (1) The Franchise Offering Circular or (2) a disclosure document as required by the Illinois Franchise Disclosure Act of 1987, as it may be amended, to each purchaser 14 days prior to (rather than delivery by the earlier of the first personal meeting, or 10 business days) the purchaser's execution of specified documents. Makes other changes. Amends the Franchise Disclosure Act of 1987. In the definition of the term "franchise", provides that a person granted the right to operate a franchise business is required to pay the franchisor or the franchisor's affiliate a fee of $500 or more at any time prior to or within the first 6 months of the commencement of operations of the franchise business. Also enumerates specific franchise agreements and relationships not governed by the Act. Makes changes to provisions concerning the sale and extension or renewal of an existing franchise; exemptions from the Act's registration requirements; registration and annual reports; amendments to disclosure statements; the deferral of payment of the initial franchise fee; and other matters. Repeals the provision prohibiting a franchise broker from selling a franchise that requires registration under the Act unless the franchise broker submitted an application for registration and a consent to service of process. Repeals the provision creating a franchise advisory board.