§ 19-28.1-6 Exemption from registration.– The following transactions are exempt from the provisions of § 19-28.1-5:
(1) The offer or sale of a franchise if all of the followingconditions are satisfied:
(i) Either the franchisor's most recent audited financialstatements show a net worth of at least ten million dollars ($10,000,000) orthe franchisor is at least eighty percent (80%) owned by a person thatunconditionally guarantees the franchisor's performance, that consents toservice of process in this state and whose most recent audited financialstatements show a net worth of at least ten million dollars ($10,000,000);
(ii) The franchisor or person owning at least eighty percent(80%) of the franchisor had and currently has at least twenty-five (25)franchisees that have conducted substantially the same franchised business tobe offered or sold at no fewer than twenty-five (25) locations for the entirefive (5) year period immediately preceding the offer or sale of the franchise;
(iii) The offeree receives the disclosure document at leastten (10) business days prior to the execution by the offeree of any bindingagreement or at least ten (10) business days prior to the direct or indirectreceipt of a franchise fee by the franchisor from the offeree, which ever firstoccurs; and
(iv) The franchisor annually files a notice of exemption withthe director. The notice of exemption shall include the disclosure documentsand the fee prescribed by § 19-28.1-29 and shall be filed prior to anoffer or sale of a franchise in this state. The exemption expires fifteen (15)months from the date of the most recent audited financial statement filedunless the director prescribes a different period by rule or order.
(2) The offer or sale of a franchise by a franchisee who isnot an affiliate of the franchisor for the franchisee's own account if thefranchisee's entire franchise is sold and the sale is not effected by orthrough the franchisor. A sale is not effected by or through a franchisormerely because a franchisee signs agreements with terms which do not materiallydiffer from the agreements with the existing franchisee or because a franchisorhas a right to approve or disapprove the sale or requires payment of areasonable transfer fee. This exemption applies to the offer or sale of amaster franchise if the entire master franchise is sold.
(3) The offer or sale of a franchise to a person who has beenfor at least two (2) years, an officer, director, partner or affiliate of thefranchisor for that person's own account.
(4) The offer or sale of a franchise to a purchaser for thepurchaser's own account who:
(i) Has a net worth of at least one million dollars($1,000,000) (in the case of a natural person, including the property of thepurchaser's spouse but excluding primary residence, personal vehicles andpersonal effects) or had an individual income, or joint income including thatperson's spouse in excess of two hundred thousand dollars ($200,000) in each ofthe two (2) most recent years and has a reasonable expectation of reaching thesame income level in the current year; and
(ii) Has the knowledge and experience in financial andbusiness matters that the person is capable of evaluating the merits and risksof the franchise.
(5) The offer or sale to an existing franchisee of anadditional franchise that is substantially the same as the franchise that thefranchisee has operated for at least two (2) years at the time of the offer orsale.
(6) The offer or sale of a franchise involving a renewal,extension, modification or amendment of an existing franchise agreement ifthere is no interruption in the operation of the franchised business and thereis no material change in the franchise relationship. For purposes of thissubdivision, an interruption in the operation of the franchised business solelyfor the purpose of renovating or relocating that business is not a materialchange in the franchise relationship or an interruption in the operation of thefranchise business.
(7) The offer or sale of a franchise by an executor,administrator, sheriff, marshal, receiver, trustee, trustee in bankruptcy,guardian or conservator on behalf of a person other than the franchisor or theestate of the franchisor.
(8) The offer of a franchise by the franchisor during theperiod of registration has expired and is pending renewal under §19-28.1-9 or an application to amend a registration under § 19-28.1-11, ifthe offeree receives the newly registered disclosure document at least ten (10)business days before the offeree's execution of any binding agreement or atleast ten (10) business days prior to the receipt of a franchise fee by thefranchisor from the offeree, whichever first occurs. Changes from the documentslast registered must be marked to show changes.
(9) The offer or sale of rights to a person to sell goods orservices within or adjacent to a retail establishment as a department ordivision; provided that the person is not required to purchase goods orservices from the operator of the retail establishment.
(10) The offer and sale of a franchise that the director byrule or order exempts when registration is not necessary or appropriate in thepublic interest or for the protection of prospective franchisees.
§ 19-28.1-6 Exemption from registration.– The following transactions are exempt from the provisions of § 19-28.1-5:
(1) The offer or sale of a franchise if all of the followingconditions are satisfied:
(i) Either the franchisor's most recent audited financialstatements show a net worth of at least ten million dollars ($10,000,000) orthe franchisor is at least eighty percent (80%) owned by a person thatunconditionally guarantees the franchisor's performance, that consents toservice of process in this state and whose most recent audited financialstatements show a net worth of at least ten million dollars ($10,000,000);
(ii) The franchisor or person owning at least eighty percent(80%) of the franchisor had and currently has at least twenty-five (25)franchisees that have conducted substantially the same franchised business tobe offered or sold at no fewer than twenty-five (25) locations for the entirefive (5) year period immediately preceding the offer or sale of the franchise;
(iii) The offeree receives the disclosure document at leastten (10) business days prior to the execution by the offeree of any bindingagreement or at least ten (10) business days prior to the direct or indirectreceipt of a franchise fee by the franchisor from the offeree, which ever firstoccurs; and
(iv) The franchisor annually files a notice of exemption withthe director. The notice of exemption shall include the disclosure documentsand the fee prescribed by § 19-28.1-29 and shall be filed prior to anoffer or sale of a franchise in this state. The exemption expires fifteen (15)months from the date of the most recent audited financial statement filedunless the director prescribes a different period by rule or order.
(2) The offer or sale of a franchise by a franchisee who isnot an affiliate of the franchisor for the franchisee's own account if thefranchisee's entire franchise is sold and the sale is not effected by orthrough the franchisor. A sale is not effected by or through a franchisormerely because a franchisee signs agreements with terms which do not materiallydiffer from the agreements with the existing franchisee or because a franchisorhas a right to approve or disapprove the sale or requires payment of areasonable transfer fee. This exemption applies to the offer or sale of amaster franchise if the entire master franchise is sold.
(3) The offer or sale of a franchise to a person who has beenfor at least two (2) years, an officer, director, partner or affiliate of thefranchisor for that person's own account.
(4) The offer or sale of a franchise to a purchaser for thepurchaser's own account who:
(i) Has a net worth of at least one million dollars($1,000,000) (in the case of a natural person, including the property of thepurchaser's spouse but excluding primary residence, personal vehicles andpersonal effects) or had an individual income, or joint income including thatperson's spouse in excess of two hundred thousand dollars ($200,000) in each ofthe two (2) most recent years and has a reasonable expectation of reaching thesame income level in the current year; and
(ii) Has the knowledge and experience in financial andbusiness matters that the person is capable of evaluating the merits and risksof the franchise.
(5) The offer or sale to an existing franchisee of anadditional franchise that is substantially the same as the franchise that thefranchisee has operated for at least two (2) years at the time of the offer orsale.
(6) The offer or sale of a franchise involving a renewal,extension, modification or amendment of an existing franchise agreement ifthere is no interruption in the operation of the franchised business and thereis no material change in the franchise relationship. For purposes of thissubdivision, an interruption in the operation of the franchised business solelyfor the purpose of renovating or relocating that business is not a materialchange in the franchise relationship or an interruption in the operation of thefranchise business.
(7) The offer or sale of a franchise by an executor,administrator, sheriff, marshal, receiver, trustee, trustee in bankruptcy,guardian or conservator on behalf of a person other than the franchisor or theestate of the franchisor.
(8) The offer of a franchise by the franchisor during theperiod of registration has expired and is pending renewal under §19-28.1-9 or an application to amend a registration under § 19-28.1-11, ifthe offeree receives the newly registered disclosure document at least ten (10)business days before the offeree's execution of any binding agreement or atleast ten (10) business days prior to the receipt of a franchise fee by thefranchisor from the offeree, whichever first occurs. Changes from the documentslast registered must be marked to show changes.
(9) The offer or sale of rights to a person to sell goods orservices within or adjacent to a retail establishment as a department ordivision; provided that the person is not required to purchase goods orservices from the operator of the retail establishment.
(10) The offer and sale of a franchise that the director byrule or order exempts when registration is not necessary or appropriate in thepublic interest or for the protection of prospective franchisees.
§ 19-28.1-6 Exemption from registration.– The following transactions are exempt from the provisions of § 19-28.1-5:
(1) The offer or sale of a franchise if all of the followingconditions are satisfied:
(i) Either the franchisor's most recent audited financialstatements show a net worth of at least ten million dollars ($10,000,000) orthe franchisor is at least eighty percent (80%) owned by a person thatunconditionally guarantees the franchisor's performance, that consents toservice of process in this state and whose most recent audited financialstatements show a net worth of at least ten million dollars ($10,000,000);
(ii) The franchisor or person owning at least eighty percent(80%) of the franchisor had and currently has at least twenty-five (25)franchisees that have conducted substantially the same franchised business tobe offered or sold at no fewer than twenty-five (25) locations for the entirefive (5) year period immediately preceding the offer or sale of the franchise;
(iii) The offeree receives the disclosure document at leastten (10) business days prior to the execution by the offeree of any bindingagreement or at least ten (10) business days prior to the direct or indirectreceipt of a franchise fee by the franchisor from the offeree, which ever firstoccurs; and
(iv) The franchisor annually files a notice of exemption withthe director. The notice of exemption shall include the disclosure documentsand the fee prescribed by § 19-28.1-29 and shall be filed prior to anoffer or sale of a franchise in this state. The exemption expires fifteen (15)months from the date of the most recent audited financial statement filedunless the director prescribes a different period by rule or order.
(2) The offer or sale of a franchise by a franchisee who isnot an affiliate of the franchisor for the franchisee's own account if thefranchisee's entire franchise is sold and the sale is not effected by orthrough the franchisor. A sale is not effected by or through a franchisormerely because a franchisee signs agreements with terms which do not materiallydiffer from the agreements with the existing franchisee or because a franchisorhas a right to approve or disapprove the sale or requires payment of areasonable transfer fee. This exemption applies to the offer or sale of amaster franchise if the entire master franchise is sold.
(3) The offer or sale of a franchise to a person who has beenfor at least two (2) years, an officer, director, partner or affiliate of thefranchisor for that person's own account.
(4) The offer or sale of a franchise to a purchaser for thepurchaser's own account who:
(i) Has a net worth of at least one million dollars($1,000,000) (in the case of a natural person, including the property of thepurchaser's spouse but excluding primary residence, personal vehicles andpersonal effects) or had an individual income, or joint income including thatperson's spouse in excess of two hundred thousand dollars ($200,000) in each ofthe two (2) most recent years and has a reasonable expectation of reaching thesame income level in the current year; and
(ii) Has the knowledge and experience in financial andbusiness matters that the person is capable of evaluating the merits and risksof the franchise.
(5) The offer or sale to an existing franchisee of anadditional franchise that is substantially the same as the franchise that thefranchisee has operated for at least two (2) years at the time of the offer orsale.
(6) The offer or sale of a franchise involving a renewal,extension, modification or amendment of an existing franchise agreement ifthere is no interruption in the operation of the franchised business and thereis no material change in the franchise relationship. For purposes of thissubdivision, an interruption in the operation of the franchised business solelyfor the purpose of renovating or relocating that business is not a materialchange in the franchise relationship or an interruption in the operation of thefranchise business.
(7) The offer or sale of a franchise by an executor,administrator, sheriff, marshal, receiver, trustee, trustee in bankruptcy,guardian or conservator on behalf of a person other than the franchisor or theestate of the franchisor.
(8) The offer of a franchise by the franchisor during theperiod of registration has expired and is pending renewal under §19-28.1-9 or an application to amend a registration under § 19-28.1-11, ifthe offeree receives the newly registered disclosure document at least ten (10)business days before the offeree's execution of any binding agreement or atleast ten (10) business days prior to the receipt of a franchise fee by thefranchisor from the offeree, whichever first occurs. Changes from the documentslast registered must be marked to show changes.
(9) The offer or sale of rights to a person to sell goods orservices within or adjacent to a retail establishment as a department ordivision; provided that the person is not required to purchase goods orservices from the operator of the retail establishment.
(10) The offer and sale of a franchise that the director byrule or order exempts when registration is not necessary or appropriate in thepublic interest or for the protection of prospective franchisees.
