State of Illinois
91st General Assembly
Legislation

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91_HB3140

 
                                               LRB9109948WHcs

 1        AN  ACT  to amend the Franchise Disclosure Act of 1987 by
 2    changing Section 5.

 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:

 5        Section  5.   The  Franchise  Disclosure  Act  of 1987 is
 6    amended by changing Section 5 as follows:

 7        (815 ILCS 705/5) (from Ch. 121 1/2, par. 1705)
 8        Sec. 5. Prohibited practices.
 9        (1)  Sale  of  unregistered  franchise  unlawful.  It  is
10    unlawful for any  person  to  offer  or  sell  any  franchise
11    required to be registered under this Act unless the franchise
12    has  been  registered  under this Act or is exempt under this
13    Act.
14        (2)  Failure to deliver a disclosure statement  unlawful.
15    It  is unlawful for any person to offer or sell any franchise
16    which is required to be registered  under  this  Act  without
17    first  providing  to  the  prospective franchisee at least 14
18    days prior to the execution by the prospective franchisee  of
19    any  binding  franchise  or  other  agreement, or at least 14
20    business days prior to the receipt  by  such  person  of  any
21    consideration, whichever occurs first, a copy of a disclosure
22    statement meeting the requirements of this Act and registered
23    by  the  Administrator,  together with a copy of all proposed
24    agreements relating to the sale of  the  franchise.  For  the
25    purposes of this Act, delivery of a disclosure statement to a
26    general partner of a partnership shall constitute delivery to
27    the partnership and its partners and delivery of a disclosure
28    statement  to  a  principal  officer  of  a corporation shall
29    constitute delivery to the corporation and its shareholders.
30        (3)  Sale of franchise by unregistered  franchise  broker
31    unlawful.  It  is  unlawful  for any franchise required to be
 
                            -2-                LRB9109948WHcs
 1    registered under this Act to be offered for sale or  sold  in
 2    this  State  by a franchise broker subject to this Act who is
 3    not first  registered  under  this  Act  unless  exempt  from
 4    registration.
 5        (4)  Filing of untrue report unlawful. It is unlawful for
 6    any  person  to make or cause to be made any untrue statement
 7    of a material fact in  any  application,  notice,  or  report
 8    filed  with  the  Administrator,  or  to omit to state in any
 9    application, notice, or report any material fact, or to  fail
10    to  notify  the  Administrator of any material change in such
11    application, notice, or report, as required by this Act.
12    (Source: P.A. 90-642, eff. 7-24-98.)

13        Section 99.  Effective date.  This Act takes effect  upon
14    becoming law.

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