Sections 9 through 24 of this chapter do not
apply to the offer or sale of a franchise if the franchisor either sells no
more than one (1) franchise in Indiana in any twenty-four (24) month
period or the franchisor:
(1)has a net worth:
(A)on a consolidated basis according to current financial
statements certified by independent certified public
accountants, of not less than five million dollars ($5,000,000);
or
(B)according to current financial statements certified by
independent certified public accountants of not less than one
million dollars ($1,000,000) and is at least eighty percent (80%)
owned by a corporation which has a net worth on a consolidated
basis, according to current financial statements certified by
independent certified public accountants, of not less than five
million
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Sections 9 through 24 of this chapter do not
apply to the offer or sale of a franchise if the franchisor either sells no
more than one (1) franchise in Indiana in any twenty-four (24) month
period or the franchisor:
(1) has a net worth:
(A) on a consolidated basis according to current financial
statements certified by independent certified public
accountants, of not less than five million dollars ($5,000,000);
or
(B) according to current financial statements certified by
independent certified public accountants of not less than one
million dollars ($1,000,000) and is at least eighty percent (80%)
owned by a corporation which has a net worth on a consolidated
basis, according to current financial statements certified by
independent certified public accountants, of not less than five
million dollars ($5,000,000);
(2) has:
(A) had at least twenty-five (25) franchisees conducting
business at all times during the five (5) year period immediately
preceding the offer or sale; or
(B) conducted the business which is the subject of the franchise
continuously for not less than five (5) years preceding the offer
or sale;
or if any corporation which owns at least eighty percent (80%) of
the franchisor has had at least twenty-five (25) franchisees
conducting business at all times during the five (5) year period
immediately preceding the offer or sale, or such corporation has
conducted the business which is the subject of the franchise
continuously for not less than five (5) years preceding the offer or
sale; and
(3) discloses in writing to each prospective franchisee, at least ten
(10) days prior to the execution by the prospective franchisee of
a binding franchise or other agreement, or at least ten (10) days
prior to the receipt of any consideration, whichever first occurs,
the following information:
(A) The name of the franchisor, the name under which the
franchisor is doing or intends to do business, and the name of
any affiliate that will engage in business transactions with
franchisees.
(B) The franchisor's principal business address and the name
and address of its agent in Indiana authorized to receive service
of process.
(C) The business form of the franchisor and the jurisdiction
under which it was organized.
(D) The business experience of the franchisor, including the
length of time the franchisor:
(i) has conducted a business of the type to be operated by the
franchisee;
(ii) has granted franchises for that business; and
(iii) has granted franchises in other lines of business.
(E) A copy of the franchise contract proposed for use or in use
in Indiana.
(F) A statement of the franchise fee charged, the proposed
application of the proceeds of such fee by the franchisor, and
the formula by which the amount of the fee is determined if the
fee is not the same in all cases.
(G) A statement describing any payments other than franchise
fees that the franchisee is required to pay to the franchisor or
affiliated persons, including royalties or payments which the
franchisor or affiliated persons collect in whole or in part on
behalf of a third party or parties.
(H) A statement of the conditions under which the franchise
may be terminated, renewal refused, or repurchased.
(I) A statement as to whether the franchisee is required to
purchase from the franchisor or affiliates or their designee
services, supplies, products, fixtures, or other goods relating to
the establishment or operation of the franchised business,
together with a description thereof.
(J) A statement as to whether the franchisee is limited in the
goods or services offered by the franchisee to the franchisee's
customers.
(K) A statement of the terms and conditions of any financing
agreements.
(L) A statement of any past or present practice or of any intent
of the franchisor to transfer to a third party any note, contract,
or other obligation of the franchisee in whole or in part.
(M) If any financial statement concerning estimated profits or
earnings is used, the data upon which the estimate is based.
(N) A statement as to whether the franchisee will receive an
exclusive area or territory.
Formerly: Acts 1975, P.L.262, SEC.1. As amended by
P.L.233-1985, SEC.1; P.L.152-2020, SEC.1.