§ 51-19-08 — Prospectus requirements

North Dakota § 51-19-08

• Jurisdiction: North Dakota
• Title 51: Sales and Exchanges
• Ch. 51-19: Franchise Investment Law

Text

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. Except as otherwise provided in this chapter, no part of the prospectus may be
underscored, italicized, or printed in larger or bolder type than the rest of the
prospectus unless the commissioner requires or permits it. The prospectus must recite
in bold type of not less than ten-point type that registration does not constitute
approval, recommendation, or endorsement by the commissioner.
3. The commissioner may by rule or order require that specified parts of the prospectus
be emphasized by italics, boldfaced type, or other means, that earnings or sales

projections or estimates be qualified by appropriate legend and by the filing with the
commissioner of such other information or documents as are necessary or appropriate
in the public interest or for the protection of prospective franchisees or subfranchisors
and may require that such additional information or documents be furnished to
prospective franchisees or subfranchisors as part of the prospectus.
4. The commissioner may by rule or order provide that any information required to be
included in the prospectus need not be included in respect of any class of franchisees
if the commissioner finds that such information is inappropriate to such class and that
disclosure adequate for the protection of prospective franchisees or subfranchisors is
otherwise included within the prospectus.
5. The commissioner may accept, in lieu of the prospectus meeting the requirements set
forth in this chapter, a prospectus which complies with the requirements of any federal
law or administrative rule or with the law of any other state requiring substantially the
same disclosure of information as is required under this chapter.
6. It is unlawful to sell any franchise in this state which is subject to registration under this
chapter without first providing the prospective franchisee at least seven days prior to
the execution by the prospective franchisee of any binding franchise or other
agreement or at least seven days prior to the receipt of any consideration, whichever
occurs first, a copy of the prospectus, together with a copy of all proposed agreements
relating to the sale of the franchise. The franchisee must be permitted to retain the
prospectus prior and subsequent to the execution of any franchise or other agreement.
The person offering or selling the franchise shall obtain a receipt signed by the
prospective franchisee acknowledging that the prospective franchisee has received a
copy of the prospectus as required under this subsection. The receipt must be kept in
the possession of the person offering or selling the franchise, subject to inspection by
the commissioner, for a period of three years from the date the receipt is taken.