§ 51-19-09 — Denial, suspension, or revocation of registration or exemption

North Dakota § 51-19-09

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

Text

1. The commissioner may summarily issue a stop order denying the effectiveness of any
registration or of any exemption under section 51-19-05 if the commissioner finds:
a. That there has been a failure to comply with any of the provisions of this chapter
or the rules of the commissioner pertaining thereto.
b. That the offer, sale, or purchase of the franchise would constitute
misrepresentation to or deceit or fraud upon purchasers thereof or has worked or
tended to work a fraud upon purchasers or would so operate.
c. That any person is engaging or about to engage in false, fraudulent, or deceptive
practices in connection with the offer, sale, or purchase of a franchise.
d. That any person identified in an application for registration has been charged with
or convicted of a felony or a civil action or proceeding is then pending against the
person or the person is subject to an order or has had a civil judgment entered
against the person as described in subsection 5 of section 51-19-06 and the
involvement of such person in the sale of franchises or the business of the
franchisor creates a substantial risk to prospective franchisees.
e. That the applicant or registrant has failed to pay the proper filing fee, but the
commissioner may enter only a denial order under this subdivision and shall
vacate any such order when the deficiency has been corrected.
f. That advertising prohibited by section 51-19-10 has been used in connection with
the offer, sale, or purchase of franchises.
g. That the financial condition of the franchisor adversely affects or would adversely
affect the ability of the franchisor to fulfill obligations under the franchise
agreement.
h. That the franchisor's enterprise or method of business includes or would include
activities which are illegal where performed.
i. That the method of sale or proposed method of sale of franchises or the
operation of the business of the franchisor or any term or condition of the

franchise agreement or any practice of the franchisor is or would be unfair, unjust,
or inequitable to franchisees.
2. a. The commissioner may issue a summary order denying, postponing, suspending,
or revoking the effectiveness of the registration pending final determination of any
proceeding under this subsection. Upon the entry of an order, the commissioner
shall promptly notify each person specified in subdivision b that it has been
entered and the reasons therefor and that within fifteen days after the receipt of a
written request the matter will be set down for hearing. If no hearing is requested
and none is ordered by the commissioner, the order will remain in effect until it is
modified or vacated by the commissioner. If a hearing is requested or ordered,
the commissioner, after notice of and opportunity for hearing to each person
specified in subdivision b, may modify or vacate the order or extend it until final
determination.
b. No stop order may be entered under this section, except under subdivision a,
without appropriate prior notice to the applicant or registrant and the person on
whose behalf the franchise is to be or has been offered, opportunity for hearing,
and written findings of fact and conclusions of law.
c. The commissioner may vacate or modify an order entered under section
51-19-05 or this section if the commissioner finds that the conditions which
prompted its entry have changed or that it is otherwise in the public interest to do
so.
d. If a hearing is requested or ordered under this section, it must be conducted in
accordance with chapter 28-32.
3. No action may be brought under this section by the commissioner after ten years from
the date of the alleged violation.