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tions in establishing categories of statistical informa-
tion to be collected in the Business Census relating
to the number, ownership and operation of franchise
businesses.
(c) Not later than two hundred eighty days after the
date of enactment of this section, the Bureau of the Cen-
sus shall submit a report to the Congress which shall de-
scribe the most cost effective and accurate means to gath-
er and present the statistical information required to be
collected pursuant to this section and identify the cat-
egories of data relating to franchise businesses to be in-
cluded in the Business Census.
SEC. 14. SCOPE AND APPLICABILITY.
Except as otherwise provided, the requirements of
this Act shall apply to franchise agreements entered into,
amended, exchanged or renewed after the date of enact-
ment of this Act.
SEC. 15. DEFINITIONS.
For purposes of this Act:
(1) The term ‘‘advertisement’’ means a commu-
nication circulated generally by mail, or print media
or electronic media, or otherwise disseminated gen-
erally to the public, in connection with an offer or
sale of a franchise.
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(2) The term ‘‘affiliate’’ means a natural or
legal person controlling, controlled by, or under com-
mon control with franchisor.
(3) The term ‘‘franchise’’ means—
(A) any continuing commercial relationship
created by a contract or agreement, either ex-
pressed or implied, whether oral or written,
where—
(i) one person (the franchisor) grants
to another person (the franchisee) the
right to engage in the business of offering,
selling or distributing goods or services, in
which—
(I) the goods and services of-
fered, sold or distributed by the
franchisee are substantially associated
with the trademark, service mark,
trade name, logotype, advertising, or
other commercial symbol owned or
used by the franchisor (hereafter ‘‘the
franchisor’s mark’’); or
(II) the franchisee must conform
to quality standards established by
the franchisor with respect to the
goods and services being distributed,
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and operate under a name that in-
cludes, in whole or in part, the
franchisor’s mark;
(ii) the franchisor—
(I) 
communicates 
to 
the
franchisee knowledge, experience, ex-
pertise, knowhow, trade secrets or
other non-patented information, re-
gardless of whether it is proprietary
or confidential;
(II) provides significant assist-
ance to the franchisee in areas relat-
ing to the franchisee’s method of op-
eration; or
(III) exercises significant controls
over the franchisee’s method of oper-
ation of the business; and
(iii) the franchisee, as a condition for
obtaining or commencing operation of a
franchise, is required to make, or to com-
mit to make, payment or other consider-
ation to the franchisor, or an affiliate of
the franchisor, other than payment for
commercially 
reasonable 
quantities 
of
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goods for resale at a bona fide wholesale
price;
(B) a subfranchise; or
(C) any commercial relationship entered
into in reasonable reliance on representations,
either oral or written, that the criteria of para-
graph (A) of this subsection will be met.
(4) The term ‘‘franchise broker’’ means a per-
son, other than a franchisor or franchisee, who sells,
offers for sale or arranges for the sale of a fran-
chise.
(5) The term ‘‘franchisee’’ means a person to
whom a franchise is granted.
(6) The term ‘‘franchisor’’ means a person who
grants a franchise or a subfranchise.
(7) The term ‘‘good faith’’ means honesty in
fact and the observance of reasonable standards of
fair dealing in the trade.
(8) The terms ‘‘material’’ and ‘‘material fact’’
includes—
(A) any fact, circumstance, or set of condi-
tions which a reasonable franchisee or a reason-
able prospective franchisee would consider im-
portant in making a significant decision relat-
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ing to entering into, remaining in, or abandon-
ing a franchise relationship; and
(B) any fact, circumstance, or set of condi-
tions which has, or may have, any significant fi-
nancial impact on a franchisor, franchisee or a
prospective franchisee.
(9) The term ‘‘offer’’ or ‘‘offering’’ means any
effort to offer or to dispose of, or solicitation of an
offer to buy, a franchise or interest in a franchise
for value.
(10) The term ‘‘outlet’’ means a place of busi-
ness, temporary or permanent, fixed or mobile, from
which products or services are offered for sale.
(11) The term ‘‘person’’ means an individual or
any other legal or commercial entity.
(12) The term ‘‘State’’ means a State, the Dis-
trict of Columbia, and any territory or possession of
the United States.
(13) The term ‘‘subfranchise’’ means a contract
or an agreement by which a person pays a
franchisor for the right to sell, negotiate the sale, or
provide services franchises.
(14) The term ‘‘subfranchisor’’ means a person
who is granted a subfranchise.
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(15) The term ‘‘trade secret’’ means informa-
tion, including a formula, pattern, compilation, pro-
gram, device, method, technique, or process, that—
(A) derives independent economic value,
actual or potential, from not being generally
known to, and not being readily ascertainable
by proper means by, other persons who can ob-
tain economic value from its disclosure or use,
and
(B) is the subject of efforts that are rea-
sonable under the circumstances to maintain its
secrecy.
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