2023 Illinois Compiled Statutes › Chapter 815 - BUSINESS TRANSACTIONS › 815 ILCS 705/ - Franchise Disclosure Act of 1987.

(815 ILCS 705/1) (from Ch. 121 1/2, par. 1701)
Sec. 1. 
		Short title. 
		This Act may be cited as the
Franchise Disclosure Act of 1987.
(Source: P.A. 85-551; 86-1475.)
(815 ILCS 705/2) (from Ch. 121 1/2, par. 1702)
Sec. 2. 
		Findings and purpose. 
		(1) The General Assembly finds and
declares that the sale of franchises is a widespread business activity.
Illinois residents have suffered substantial losses where franchisors or
their representatives have not provided full and complete information
regarding the franchisor-franchisee relationship, the details of the
contract between the franchisor and franchisee, the prior business experience
of the franchisor and other factors relevant to the franchise offered for sale.
(2) It is the intent of this Act: (a) to provide each prospective
franchisee with the information necessary to make an intelligent decision
regarding franchises being offered for sale; and (b) to protect the
franchisee and the franchisor by providing a better understanding of the
business and the legal relationship between the franchisee and the franchisor.
(Source: P.A. 85-551.)
(815 ILCS 705/3) (from Ch. 121 1/2, par. 1703)
Sec. 3. Definitions. As used in this Act:
(1) "Franchise" means a contract or agreement, either expressed or
implied, whether oral or written, between two or more persons by which:
(a) a franchisee is granted the right to engage in     the business of offering, selling, or distributing goods or services, under a marketing plan or system prescribed or suggested in substantial part by a franchisor; and
(b) the operation of the franchisee's business     pursuant to such plan or system is substantially associated with the franchisor's trademark, service mark, trade name, logotype, advertising, or other commercial symbol designating the franchisor or its affiliate; and
(c) the person granted the right to engage in such     business is required to pay to the franchisor or an affiliate of the franchisor, directly or indirectly, a franchise fee of $500 or more;
Provided that this Act shall not apply to any of the following persons,
entities or relationships which may involve or acquire a franchise or any
interest in a franchise:
(i) any franchised business which is operated by the     franchisee on the premises of the franchisor or subfranchisor as long as such franchised business is incidental to the business conducted by the franchisor or subfranchisor at such premises, including, without limitation, leased departments and concessions; or
(ii) a fractional franchise.  A "fractional     franchise" means any relationship in which the person described therein as a franchisee, or any of the current directors or executive officers thereof, has been in the type of business represented by the franchise relationship for more than 2 years and the parties anticipated, or should have anticipated, at the time the agreement establishing the franchise relationship was reached, that the sales arising from the relationship would represent no more than 20% of the sales in dollar volume of the franchisee for a period of at least one year after the franchisee begins selling the goods or services involved in the franchise; or
(iii) a franchise agreement for the use of a     trademark, service mark, trade name, logotype, advertising, or other commercial symbol designating a person who offers on a general basis, for a fee or otherwise, a bona fide service for the evaluation, testing, or certification of goods, commodities, or services; or
(iv) a franchise relationship covered by the     Petroleum Marketing Practices Act, 15 U.S.C. 2801.
(2) "Franchisee" means a person to whom a franchise is granted and
includes, unless stated otherwise in this Act: (a) a subfranchisor with
regard to its relationship with a franchisor and (b) a subfranchisee with
regard to its relationship with a subfranchisor.
(3) "Franchisor" means a person who grants a franchise and includes a
subfranchisor with regard to its relationship with a franchisee, unless
stated otherwise in this Act.
(4) "Subfranchise" means any contract or agreement between a franchisor
and a subfranchisor whereby the subfranchisor is granted the right, in
consideration of the payment of a franchise fee in whole or in part for
such right, to sell or negotiate the sale of
franchises.  Where used in this Act, unless specifically stated otherwise,
"franchise" includes "subfranchise."
(5) "Subfranchisor" means a person to whom the right to sell or negotiate the sale of subfranchises
is granted.
(6) "Order" means a consent, authorization, approval, prohibition, or
requirement applicable to a specific case issued by the Attorney General
Administrator.
(7) "Person" means an individual, a corporation, a partnership, a joint
venture, an association, a joint stock company, a trust, or an
unincorporated organization.
(8) "Rule" means any published regulation or standard of general
application issued by the Administrator.
(9) "Sale" or "sell" includes every contract or agreement of sale of,
contract to sell, or disposition of, a franchise or interest in a franchise
for value.
(10) "State" means the State of Illinois.
(11) "Fraud" and "deceit" are not limited to common law fraud or deceit.
(12) "Offer" or "offer to sell" includes every attempt to offer to
dispose of, or solicitation of an offer to buy, a franchise, any interest
in a franchise or an option to acquire a franchise for value.
(13) "Publish" means publicly to issue or circulate by newspaper, mail,
radio, or television, or otherwise to disseminate to the public.
(14) "Franchise fee" means any fee or charge that a franchisee is
required to pay directly or indirectly for the right to enter into a
business or sell, resell, or distribute goods, services or franchises
under an agreement, including, but not limited to, any such payment for
goods or services, provided that the Administrator may by rule define what
constitutes an indirect franchise fee, and provided further that the
following shall not be considered the payment of a franchise fee: (a) the
payment of a reasonable service charge to the issuer of a credit card by an
establishment accepting or honoring such credit card; (b) amounts paid to a
trading stamp company by a person issuing trading stamps in connection with
the retail sale of merchandise or services; (c) the purchase or agreement
to purchase goods for which there is an established market at a bona fide
wholesale price; (d) the payment for fixtures necessary to operate the
business; (e) the payment of rent which reflects payment for the economic
value of the property; or (f) the purchase or agreement to purchase goods
for which there is an established market at a bona fide retail price
subject to a bona fide commission or compensation plan.  The Administrator
may by rule define what shall constitute an established market.
(15) "Disclosure statement" means the document provided for in Section
16 of this Act and all amendments to such document.
(16) "Write" or "written" shall include printed, lithographed or any other
means of graphic communication.
(17) (Blank).
(18) "Marketing plan or system" means a plan or system relating to some
aspect of the conduct of a party to a contract in conducting business,
including but not limited to (a) specification of price, or special pricing
systems or discount plans, (b) use of particular sales or display equipment
or merchandising devices, (c) use of specific sales techniques, (d) use of
advertising or promotional materials or cooperation in advertising efforts;
provided that an agreement is not a marketing plan or system solely because
a manufacturer or distributor of goods reserves the right to occasionally
require sale at a special reduced price which is advertised on the
container or packaging material in which the product is regularly sold, if
the reduced price is absorbed by the manufacturer or distributor.
(19) "Administrator" means the Illinois Attorney General.
(20) (a) An offer to sell a franchise is made in this     State when the offer either originates from this State or is directed by the offeror to this State and received at the place to which it is directed. An offer to sell is accepted in this State when acceptance is communicated to the offeror in this State; and acceptance is communicated to the offeror in this State when the offeree directs it to the offeror in this State reasonably believing the offeror to be in this State and it is received at the place to which it is directed.
(b) An offer to sell a franchise is not made in this     State merely because the franchisor circulates or there is circulated in this State an advertisement in (i) a bona fide newspaper or other publication of general, regular and paid circulation which has had more than 2/3 of its circulation outside this State during the past 12 months, or (ii) a radio or television program originating outside this State which is received in this State.
(21) "Franchise broker" means any person engaged in the business of
representing a franchisor in offering for sale or selling a franchise and
is not a franchisor, an affiliate of a franchisor or an officer, director or employee of a franchisor or an affiliate of a franchisor
with respect to such franchise. A franchisee shall not be a franchise
broker merely because it receives a payment from the franchisor in
consideration of the referral of a prospective franchisee to the
franchisor, if the franchisee does not otherwise participate in the sale of
a franchise to the prospective franchisee. A franchisee shall not be deemed
to participate in a sale merely because he responds to an inquiry from a
prospective franchisee.
(22) "Salesperson" means any person employed by or representing a
franchise broker, a franchisor or an affiliate of the franchisor in effecting or attempting to effect the offer or sale
of a franchise.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/4) (from Ch. 121 1/2, par. 1704)
Sec. 4. 
		Jurisdiction and venue. 
		Any provision in a franchise
agreement that designates jurisdiction or venue in a forum
outside of this
State is void, provided that a franchise agreement may provide
for arbitration in a forum outside of this State.
(Source: P.A. 88-256.)
(815 ILCS 705/5) (from Ch. 121 1/2, par. 1705)
Sec. 5. 
		Prohibited practices.
(1) Sale of unregistered franchise
unlawful. It is unlawful for any person to offer or sell any franchise
required to be registered under this Act unless the franchise has been
registered under this Act or is exempt under this Act.
(2) Failure to deliver a disclosure statement unlawful. It is unlawful
for any person to offer or sell any franchise which is required to be
registered under this Act without first providing to the prospective
franchisee at least 14 days prior to the execution by the
prospective franchisee of any binding franchise or other agreement, or at
least 14 days prior to the receipt by such person of any
consideration, whichever occurs first, a copy of a disclosure statement
meeting the requirements of this Act and registered by the Administrator,
together with a copy of all proposed agreements relating to the sale of the
franchise. For the purposes of this Act, delivery of a disclosure statement
to a general partner of a partnership shall constitute delivery to the
partnership and its partners and delivery of a disclosure statement to a
principal officer of a corporation shall constitute delivery to the
corporation and its shareholders.
(3) Sale of franchise by unregistered franchise broker
unlawful. It is
unlawful for any franchise required to be registered under this Act to be
offered for sale or sold in this State by a franchise broker subject to
this Act who is not first registered under this Act unless exempt from
registration.
(4) Filing of untrue report unlawful. It is unlawful for any person to
make or cause to be made any untrue statement of a material fact in any
application, notice, or report filed with the Administrator, or to omit to
state in any application, notice, or report any material fact, or to fail to
notify the Administrator of any material change in such application,
notice, or report, as required by this Act.
(Source: P.A. 90-642, eff. 7-24-98; 91-916, eff. 7-7-00.)
(815 ILCS 705/6) (from Ch. 121 1/2, par. 1706)
Sec. 6. 
		Fraudulent practices. 
		In connection with the offer or sale
of any franchise made in this State, it is unlawful for any person, directly
or indirectly, to:
(a) employ any device, scheme, or artifice to defraud;
(b) make any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made, in the light of the
circumstances under which they are made, not misleading; or
(c) engage in any act, practice, or course of business which operates
or would operate as a fraud or deceit upon any person.
For the purposes of this Section 6, a sale of a franchise is made in this
State when: (i) an offer to sell or buy a franchise is made in this State
and accepted within or outside of this State, or (ii) an offer to sell or
buy a franchise is made outside of this State and accepted in this State,
or (iii) the offeree is domiciled in this State, or (iv) the franchised
business is or will be located in this State.
(Source: P.A. 85-551.)
(815 ILCS 705/7) (from Ch. 121 1/2, par. 1707)
Sec. 7. Sale by franchisee and extension or renewal of existing
franchise.  There shall be exempted from the provisions of Sections 5, 10,
11, 13 and 15 of this Act the offer or sale of a franchise by a franchisee
for its own account if the sale is not effected by or through a franchisor.
 A sale is not effected by or through a franchisor merely because a
franchisor has a right to approve or disapprove a different franchisee or
requires payment of a reasonable transfer fee or requires the new franchisee to execute a franchise agreement on terms not materially different from the existing franchise agreement.
There shall be exempted from the provisions of Sections 5, 10, 11, 13 and
15 of this Act the extension or renewal of an existing franchise or the
exchange or substitution of a modified or amended franchise agreement where
there is no interruption in the operation of the franchise business by the
franchisee.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/8) (from Ch. 121 1/2, par. 1708)
Sec. 8. Exemptions.
(a) There shall be exempted, from the registration requirements of Section 10 of this Act, the offer and sale of a franchise if:
(1) the franchisor has a net worth on a consolidated     basis, according to its most recent audited financial statement, of not less than $15,000,000; or the franchisor has a net worth, according to its most recent unaudited financial statement, of not less than $1,000,000 and is at least 80% owned by a corporation which has a net worth on a consolidated basis, according to its most recent audited financial statement, of not less than $15,000,000;
(2) the franchisee (or its parent or any affiliates)     is an entity that has been in business for at least 5 years and has a net worth of at least $5,000,000; or
(3) one or more purchasers of at least 50% ownership     interest in the franchise within 60 days of the sale, has been, for at least 2 years, an officer, director, general partner, individual with management responsibility for the offer and sale of the franchisor's franchises or the administrator of the franchised network; or within 60 days of the sale, has been, for at least 2 years, an owner of at least a 25% interest in the franchisor.
Provided, unless exempted by order or rule of the Administrator, the franchisor shall deliver to the prospective franchisee a disclosure statement in accordance with the requirements of Section 5(2) of this Act in connection with any transaction exempted under this Section 8(a).
(b) There shall be exempted from the provisions of
Sections 5, 10, 11, and 15 of this Act the offer and sale of a franchise
if the prospective franchisee qualifies as one of the following:
any bank as defined in Section 3(a)(2) of the Securities Act of
1933 whether acting in its individual or fiduciary capacity or as an
insurance  company as defined in Section 2(13) of that Act.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/9) (from Ch. 121 1/2, par. 1709)
Sec. 9. 
		
		Exemptions from disclosure statement and registration
requirements granted by Administrator. The Administrator may by rule or
order provide that any information required by Section 16 of this Act to be
included in the disclosure statement need not be included in respect of any
class of franchises if he finds that the requirement of such information is
inapplicable to such class and that disclosure fully adequate for the
protection of prospective franchisees is otherwise required to be included
within the disclosure statement. The Administrator may by rule or order,
and subject to such terms and conditions as he may prescribe, exempt any
franchise, franchisor, subfranchisor, or franchise broker from Sections 5,
10, 11 and 13 of this Act if he finds that the enforcement of this Act is
not necessary (1) in the public interest, or (2) for the protection of any
class of prospective franchisees, or (3) by reason of the investment
involved, or (4) because of the limited character of the offering. The
disclosure statement required by Section 16 need not be furnished to a
franchisee who has already been furnished with a copy of such disclosure
statement in connection with a prior purchase of a franchise by such
franchisee, provided that no material amendments have been made to such
disclosure statement since it was furnished to such franchisee.
(Source: P.A. 85-551.)
(815 ILCS 705/10) (from Ch. 121 1/2, par. 1710)
Sec. 10. Registration and Annual Report. No franchisor may sell or
offer to sell a franchise in this State if (1) the franchisee is domiciled
in this State or (2) the offer of the franchise is made or accepted in this
State and the franchise business is or will be located in this State, unless
the franchisor has registered the franchise with the Administrator by
filing such form of notification and disclosure statement
as required under Section 16.
The registration of a franchise shall become effective on the 21st day after the date of the filing of the required materials,
unless
the Administrator has
denied registration under subdivision (a)(3) of Section 22.
The registration of a franchise shall expire 120 days after the franchisor's fiscal year end. Annually, but not later than one business day before the

registration expires, the franchisor shall file the disclosure statement updated as of
the date of the franchisor's prior fiscal year end.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/11) (from Ch. 121 1/2, par. 1711)
Sec. 11. Amendments. Within 30 days after the close of each quarter of its fiscal year, the franchisor shall prepare revisions to its disclosure statement to reflect any material changes to disclosures included, or required to be included, in the disclosure statement. The franchisor shall
deliver the amended disclosure statement in accordance with the
requirements of subsection (2) of Section 5 and  Section 16 of this Act to
any prospective franchisee, including prospective franchisees to whom a
disclosure statement was previously delivered if the material change
relates to or affects the franchise offered to such
prospective franchisees. The amended disclosure statement shall be
filed with the Administrator. An amendment shall not be required if the terms of
the franchise agreement merely reflect changes from the franchisor's
registered franchise made pursuant to negotiations between the franchisee
and the franchisor.
The fact that the franchise is considered to be registered is not a
finding that the amended disclosure statement complies with the standard of
disclosure required by this Act.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/12) (from Ch. 121 1/2, par. 1712)
Sec. 12. 
		Period of effectiveness. 
		The registration of a franchise and
the disclosure statement used in connection therewith shall continue to be
effective unless the Administrator issues an order suspending, terminating,
prohibiting or denying the sale or registration of the franchise under
this Act.
(Source: P.A. 85-551.)
(815 ILCS 705/13)
Sec. 13. (Repealed).
(Source: P.A. 85-551. Repealed by P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/14) (from Ch. 121 1/2, par. 1714)
Sec. 14. 
		Effect of registration. 
		The fact that a franchise has been
registered by the Administrator is not a finding by the Administrator that
the disclosure statement filed with the Administrator in connection with
that registration is in any way true, accurate or complete in substance or
on its face, or to be held to mean that the Administrator has in any way
passed upon the merits or given approval to such franchise.  It is unlawful
to make, or cause to be made, to any prospective franchisee any express or
implied representation contrary to the foregoing or to advertise or
represent that the Administrator approves of or recommends any franchise.
(Source: P.A. 85-551.)
(815 ILCS 705/15) (from Ch. 121 1/2, par. 1715)
Sec. 15. Escrow of franchise fees; surety bonds; franchise fee deferrals. If the Administrator
finds that a franchisor has failed to demonstrate that adequate financial
arrangements have been made to fulfill obligations to provide real estate,
improvements, equipment, inventory, training, or other items to be included
in the establishment and opening of the franchise business being offered,
the Administrator may by rule or order require the escrow or impoundment of
franchise fees and other funds paid by the franchisee until such obligations
have been fulfilled, or, at the option of the franchisor, the furnishing
of a surety bond as provided by rule of the Administrator, if he finds that
such requirement is necessary and appropriate to protect prospective
franchisees, or, at the option of the franchisor, the deferral of payment of the initial fee until the opening of the franchise business.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/16) (from Ch. 121 1/2, par. 1716)
Sec. 16. Form and contents of disclosure statements. The disclosure statement required under this Act shall be prepared in
accordance
with the Federal Trade Commission rule entitled Disclosure Requirements and Prohibitions Concerning Franchising, 16 C.F.R. Part 436, as it may be amended, the Guidelines promulgated
by the North American Securities Administrators Association, Inc., as they may be amended, and the rules adopted by the Administrator pursuant to Section 32 of this Act.
All statements in the disclosure statement shall be free from any false
or misleading statement of a material fact, shall not omit to state any
material fact required to be stated or necessary to make the statements
not misleading, and shall be accurate and complete as of the effective
date thereof.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/17) (from Ch. 121 1/2, par. 1717)
Sec. 17. 
		Participation in trade associations. 
		It shall be an unfair
franchise practice and a violation of this Act for a franchisor to in any
way restrict any franchisee from joining or participating in any trade
association.
(Source: P.A. 85-551.)
(815 ILCS 705/18) (from Ch. 121 1/2, par. 1718)
Sec. 18. 
		Discrimination. 
		It shall be an unfair franchise practice and
a violation of this Act for any franchisor to unreasonably and materially
discriminate between franchisees operating a franchised business located
in this State in the charges offered or made for franchise fees, royalties,
goods, services, equipment, rentals or advertising services, if such
discrimination will cause competitive harm to a franchisee who competes
with a franchisee that received the benefit of the discrimination, unless
and to the extent that any classification of or discrimination between franchisees is:
(a) based on franchises granted at different times, and such discrimination
is reasonably related to such differences in time;
(b) related to one or more programs for making franchises available to
persons with insufficient capital, training, business experience or education,
or lacking other qualifications;
(c) related to local or regional experimentation with or variations in
product or service lines or business formats or designs;
(d) related to efforts by one or more franchisees to cure deficiencies in
the operation of franchise businesses or defaults in franchise agreements; or
(e) based on other reasonable distinctions considering the purposes of
this Act and is not arbitrary.
(Source: P.A. 85-551.)
(815 ILCS 705/19) (from Ch. 121 1/2, par. 1719)
Sec. 19. 
		Termination of a Franchise. 
		(a) It shall be a violation of
this Act for a franchisor to terminate a franchise of a franchised business
located in this State prior to the expiration of its term except for "good
cause" as provided in subsection (b) or (c) of this Section.
(b) "Good cause" shall include, but not be limited to, the failure of the
franchisee to comply with any lawful provisions of the franchise or other
agreement and to cure such default after being given notice thereof and
a reasonable opportunity to cure such default, which in no event need be
more than 30 days.
(c) "Good cause" shall include, but without the requirement of notice and
an opportunity to cure, situations in which the franchisee:
(1) makes an assignment for the benefit of creditors or a similar
disposition of the assets of the franchise business;
(2) voluntarily abandons the franchise business;
(3) is convicted of a felony or other crime which substantially
impairs the good will associated with the franchisor's trademark, service
mark, trade name or commercial symbol; or
(4) repeatedly fails to comply with the lawful provisions of the franchise
or other agreement.
(Source: P.A. 85-551.)
(815 ILCS 705/20) (from Ch. 121 1/2, par. 1720)
Sec. 20. 
		Nonrenewal of a franchise. 
		It shall be a violation of this
Act for a franchisor to refuse to renew a franchise of a franchised business
located in this State without compensating the franchisee either by repurchase
or by other means for the diminution in the value of the franchised business
caused by the expiration of the franchise where:
(a) the franchisee is barred by the franchise agreement (or by the refusal
of the franchisor at least 6 months prior to the expiration date of the
franchise to waive any portion of the franchise agreement which prohibits
the franchisee) from continuing to conduct substantially the same business
under another trademark, service mark, trade name or commercial symbol in
the same area subsequent to the expiration of the franchise; or
(b) the franchisee has not been sent notice of the franchisor's intent
not to renew the franchise at least 6 months prior to the expiration date
or any extension thereof of the franchise.
(Source: P.A. 85-551.)
(815 ILCS 705/21) (from Ch. 121 1/2, par. 1721)
Sec. 21. Franchise Advisory Board. There is created in the Office of
the Administrator a Franchise Advisory Board.  The Franchise Advisory Board
shall consist of such members as the Administrator deems appropriate to
advise him on franchising and franchise related matters.  The members shall
be persons who have knowledge and experience in franchising.  The members
of the Franchise Advisory Board shall serve at the pleasure of the
Administrator. The Franchise Advisory Board from time to time shall make
recommendations concerning the administration and enforcement of this Act.
Members of the Franchise Advisory Board shall serve without compensation. The Board shall select its own chairman, establish
rules and procedures, and keep a record of matters transpiring at all meetings.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/22) (from Ch. 121 1/2, par. 1722)
Sec. 22. Enforcement.
(a) The Administrator may suspend, terminate,
prohibit or deny the sale of any franchise or registration of any franchise
or salesperson if it appears to him that: (1) there has
been a failure to comply with any of the provisions of this Act or the rules
or orders of the Administrator pertaining thereto; or (2) that the disclosure
statement or any amendment thereto
includes any false or misleading statement of a material fact or omits to
state
any material fact required to be stated therein or necessary to make the
statements therein not misleading; or (3)
that the disclosure statement
filed in conjunction with an initial registration under
Section 10 is materially deficient.  A disclosure statement is "materially
deficient" if it fails to comply with the requirements of Section 16;
or (4) that the sale of the
franchise would constitute
a misrepresentation, deceit or fraud upon prospective franchisees; or (5)
that any person in this State is engaging in or about to engage in false,
fraudulent or deceptive practices or any device, scheme, or artifice to defraud
in connection with the offer or sale of the franchise; or (6) that any person
identified in the disclosure statement or any person engaged in the offer
or sale of the franchise in this State has been convicted of an offense,
is subject to an order or civil judgment or is a defendant in a proceeding
required to be described in the disclosure statement and the involvement
of such person creates an unreasonable risk to prospective franchisees;
or (7) (blank); or (8) (blank); or (9) that the franchisor's enterprise
or method of business includes or would include activities which are illegal
where performed; or (10) (blank);
or (11) (blank).
In no case shall the Administrator, or any person designated by him, in
the administration of this Act, incur any official or personal liability by
issuing an order or other proceeding or by suspending, denying, prohibiting
or terminating the registration of a franchise broker or salesperson, or by
denying, suspending, terminating or prohibiting the registration of
franchises, or prohibiting the sale of franchises, or by suspending or
prohibiting any person from acting as a franchise broker or salesperson.
The Administrator may exercise any of the powers specified in Section 31 of
this Act.
(b) The Administrator, with such assistance as he may from
time to time request of the state's attorneys in the several counties, may
institute proceedings in the circuit court to prevent and restrain
violations of this Act or of any rule or order prescribed or issued under
this Act.  In such a proceeding, the court shall determine whether a
violation has been committed, and shall enter such judgment or decree as it
considers necessary to remove the effects of any violation and to prevent
such violation from continuing or from being renewed in the future.  The
court, in its discretion, may exercise all powers necessary for this
purpose, including, but not limited to, injunction, revocation, forfeiture
or suspension of the charter, franchise, certificate of authority or
privileges of any corporation, association, limited partnership or other
business organization operating under the laws of this State, dissolution
of domestic corporations or associations, suspension or termination of the
right of foreign corporations or associations to do business in this State,
or restitution or payment of damages by a franchisor to persons injured by
violations of this Act, including without limitation an award of reasonable
attorneys fees and costs.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/23) (from Ch. 121 1/2, par. 1723)
Sec. 23. 
		
		Hearings and notice of order suspending, terminating,
prohibiting or denying sales or registration.  The Administrator may
summarily issue an order prohibiting, suspending, terminating or denying
the sale of a franchise or registration of a franchise or franchise broker
if such order is within the public interest and Section 22 of this Act,
provided the Administrator shall promptly notify the person or entity
affected, in writing, of the entry of an order under this Act and of the
reasons therefor. Upon receipt of a written request from such person or
entity, the matter will be set down for hearing to commence within 10 days
after such receipt unless the franchisor, or franchise broker consents to a
later date. If a hearing is not requested within 15 days from the date of
the order and none is ordered by the Administrator, the order will remain
in effect until it is modified or vacated by the Administrator.  If a
hearing is requested or ordered, the Administrator, after notice and
hearing, may modify or vacate the order or extend it until its final
determination.
(Source: P.A. 85-551.)
(815 ILCS 705/24) (from Ch. 121 1/2, par. 1724)
Sec. 24. 
		Civil penalties. 
		In lieu of any penalty provided pursuant
to Section 25 of this Act, and in addition to an action pursuant to
subsection (b) of Section 22 of this Act, the Administrator may bring an
action in the name and on behalf of the people of the State against any
person, trustee, manager or other officer or agent of a corporation, or
against a corporation, domestic or foreign, to recover a penalty in a sum
not to exceed $50,000 per violation for the doing in this State of any act
herein declared illegal.  The action must be brought within 3 years after
the commission of the act upon which it is based.
(Source: P.A. 85-551.)
(815 ILCS 705/25) (from Ch. 121 1/2, par. 1725)
Sec. 25. 
		Criminal prosecution. 
		Any person who willfully sells a
franchise in this State without complying with Sections 5, 6, 10, 11, 13 or
15 of this Act or who in a disclosure statement or an amendment thereto
willfully makes any false or misleading statement of a material fact or
willfully omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, commits a class 2
felony and upon conviction shall be subject to such punishment as provided
by law.  The Administrator, with such assistance as he may from time to time
request of the State's Attorneys in the several counties, shall investigate
suspected criminal violations of this Act and shall commence and try all
prosecutions under this Act.  Prosecutions under this Act may be commenced
by information or indictment.  With respect to the commencement and trial
of such prosecutions instituted by the Administrator, the Administrator
shall have all of the powers and duties vested by law in the state's
attorneys with respect to criminal prosecutions generally.  A prosecution
for any offense under this Act must be commenced within 3 years after the
commission thereof.  Nothing in this Act limits the power of the State to
punish any person for any conduct which constitutes a crime under any
other statute.
(Source: P.A. 85-551.)
(815 ILCS 705/26) (from Ch. 121 1/2, par. 1726)
Sec. 26. Private civil actions. Any person who offers,
sells, terminates, or fails to renew a franchise in violation of this
Act shall be liable to the franchisee who may sue for damages caused
thereby.  This amendatory Act of 1992 is intended to clarify the
existence of a private right of action under existing law with respect to
the termination or nonrenewal of a franchise in violation of this Act.
In the case of a violation of Section 5, 6, 10, 11, or 15 of the Act,
the franchisee may also sue for rescission.
No franchisee may sue for rescission under this Section 26 who
shall fail, within 30 days from the date of receipt thereof, to accept an
offer to return the consideration paid or to repurchase the franchise
purchased by such person.  Every offer provided for in this Section shall
be in writing, shall be delivered to the franchisee or sent by certified
mail addressed to the franchisee at such person's last known address, shall
offer to return any consideration paid or to repurchase the franchise for a
price equal to the full amount paid less any net income received by the
franchisee, plus the legal rate of interest thereon, and may require the
franchisee to return to the person making such offer all unsold goods,
equipment, fixtures, leases and similar items received from such person.
Such offer shall continue in force for 30 days from the date on which it
was received by the franchisee and shall advise the franchisee of such
rights and the period of time limited for acceptance thereof.  Any
agreement not to accept or refusing or waiving any such offer made during
or prior to the expiration of said 30 days shall be void.
The term "franchisee" as used in this Section shall include the personal
representative or representatives of the franchisee.
Every person who directly or indirectly controls a person liable under
this Section 26, every partner in a firm so liable, every principal
executive officer or director of a corporation so liable, every manager of a limited liability company so liable, every person
occupying a similar status or performing similar functions, and every
employee of a person so liable, who materially aids in the act or
transaction constituting the violation, is also liable jointly and severally
with and to the same extent as such person, unless said person who otherwise
is liable had no knowledge or reasonable basis to have knowledge of the
facts, acts or transactions constituting the alleged violation.
Every franchisee in whose favor judgment is entered in an action
brought under this Section shall be entitled to the costs of the action
including, without limitation, reasonable attorney's fees.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/27) (from Ch. 121 1/2, par. 1727)
Sec. 27. 
		Periods of limitation. 
		No action shall be maintained under Section
26 of this Act to enforce any liability created by this Act unless brought
before the expiration of 3 years after the act or transaction constituting
the violation upon which it is based, the expiration of one year after the
franchisee becomes aware of facts or circumstances reasonably indicating
that he may have a claim for relief in respect to conduct governed by this
Act, or 90 days after delivery to the franchisee of a written notice
disclosing the violation, whichever shall first expire.  No cause of action
barred under existing law on the effective date of this Act shall be
revived by this Act.  Every cause of action under this Act survives the
death of any person who might have been a plaintiff or defendant.
(Source: P.A. 85-551.)
(815 ILCS 705/28) (from Ch. 121 1/2, par. 1728)
Sec. 28. 
		No other civil liability. 
		Except as explicitly
provided in this Act, no civil liability in favor of any person
shall arise against any person by implication from or as a
result of the violation of any provision of this Act.  Nothing
in this Act shall limit any liability which may exist by virtue
of any other statute or under common law if this Act were not
in effect.  Prior law exclusively governs all suits, actions,
prosecutions, or proceedings which are pending or may be initiated
on the basis of facts or circumstances occurring before the
effective date of this Act.
(Source: P.A. 85-551.)
(815 ILCS 705/29) (from Ch. 121 1/2, par. 1729)
Sec. 29. Certificate of registration or filing of annual report;
admissibility in evidence.  In any civil or criminal action brought under
this Act, a Certificate under the seal of this State, signed by the
Administrator, stating whether or not a franchise is registered, or whether
or not an annual report of a franchisor has been filed under Section 10 of
this Act, shall constitute prima facie evidence of such
matter, and shall be admissible into evidence at trial without proof of
foundation or additional authenticity.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/30) (from Ch. 121 1/2, par. 1730)
Sec. 30. 
		(Repealed).
(Source: P.A. 85-551. Repealed by P.A. 90-642, eff. 7-24-98.)
(815 ILCS 705/31) (from Ch. 121 1/2, par. 1731)
Sec. 31. Powers of the Administrator.
(a) Investigations.  The
Administrator may in his discretion: (1) make such public or private
investigations inside or outside this State as he deems necessary (i) to
determine whether any person has violated, is violating, or is about to
violate any provision of this Act or any rule or order prescribed or issued
under this Act or (ii) to aid in the enforcement of this Act or in the
prescribing of rules under this Act; and (2) publish information concerning
the violation of this Act or any rule or order prescribed or issued under
this Act.  No actions taken or orders issued by the Administrator shall be
binding on, nor in any way preclude the Administrator from conducting any
investigation or commencing any action authorized under this Act.  The
Administrator or any of his assistants may participate in any hearings
conducted by the Administrator under this Act and the Administrator may
provide such assistance as the Administrator believes necessary to
effectively fulfill the purposes of this Act.
(b) Subpoenas.  For the purpose of any investigation or proceeding under
this Act and prior to the commencement of any civil or criminal action as
provided for in this Act, the Administrator has the authority to subpoena
witnesses, compel their attendance, examine them under oath, or require the
production of any books, documents, records or tangible things, hereafter
referred to as "documentary material", which the Administrator deems
relevant or material to his investigation, for inspection, reproducing or
copying under such terms and conditions as are hereafter set forth.  Any
subpoena issued by the Administrator shall contain the following information:
(1) the statute and section thereof, the alleged violation of which is
under investigation; (2) the date, place and time at which the person is
required to appear or produce documentary material in his possession,
custody or control at a designated office of the Administrator, which date
shall not be less than 10 days from date of service of the subpoena; and
(3) where documentary material is required to be produced, the same shall
be prescribed by class so as to clearly indicate the material demanded.
(c) Production of documentary material.  The Administrator is hereby
authorized, and may so elect to require the production, pursuant to this
Section of documentary material prior to the taking of any testimony of
the person subpoenaed, in which event such documentary material shall be
made available for inspection and copying during normal business hours at
the principal place of business of the person served, or at such other time
and place as may be agreed upon by the person served and the Administrator.
 When documentary material is demanded by subpoena, said subpoena shall not
(1) contain any requirement which would be unreasonable or improper if
contained in a subpoena duces tecum issued by a court of this State; or (2)
require the disclosure of any documentary material which would be
privileged, or which for any other reason would not be required by a
subpoena duces tecum issued by a court of this State.
(d) Service of subpoenas.  Service of a subpoena of the Administrator as
provided herein may be made by (1) delivery of a duly executed copy thereof
to the person served or if a person is not a natural person, to the
principal place of business of the person to be served, or (2) mailing by
certified mail, return receipt requested, a duly executed copy thereof
addressed to the person to be served at his principal place of business in
this State, or, if said person has no place of business in this State, to
his principal office.
(e) Examination of witnesses.  The examination of all witnesses under
this Section shall be conducted by the Administrator, or by his deputy
designated by him, before an officer authorized to administer oaths in this
State.  The testimony shall be taken stenographically or by a sound
recording device and shall be transcribed.
(f) Fees.  All persons served with a subpoena by the Administrator under
this Act shall be paid the same fees and mileage as are paid to witnesses
in the courts of this State.
(g) Judicial enforcement of subpoenas.  In the event a witness served
with a subpoena by the Administrator under this Act fails or refuses to
obey same or to produce documentary material as provided herein or to give
testimony relevant or material to the investigation being conducted, the
Administrator may petition any circuit court for an order requiring said
witness to attend and testify or produce the documentary material demanded.
 Thereafter, any failure or refusal on the part of the witness to obey such
order of court may be punishable by the court as a contempt thereof.
(h) Immunity from prosecution.  No person is excused from attending and
testifying or from producing any document or records before the
Administrator in obedience to the subpoena of the Administrator, in any
proceeding instituted by the Administrator and authorized by this Act, on
the ground that the testimony or evidence, documentary or otherwise,
required of him may tend to incriminate him or subject him to a penalty or
forfeiture.  No individual may be prosecuted or subjected to any penalty or
forfeiture for or on account of any transaction, matter, or thing
concerning which he is compelled, after validly claiming his privilege
against self-incrimination, to testify or produce evidence, documentary or
otherwise, except that the individual testifying is not exempt from
prosecution and punishment for perjury or contempt committed in testifying.
(i) Administrator entitled to recover costs. In any action brought under
the provisions of this Act, the Administrator is entitled to recover costs
for the use of this State.
(j) In the administration of this Act, the Attorney General may accept an Assurance of Voluntary Compliance with respect to any method, act, or practice deemed to be violative of the Act from any person who has engaged in, is engaging in, or was about to engage in such method, act, or practice. Evidence of a violation of an Assurance of Voluntary Compliance shall be prima facie evidence of a violation of this Act in any subsequent proceeding brought by the Attorney General against the alleged violator. The Administrator may require that an Assurance of Voluntary Compliance be disclosed in the disclosure statement.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/32) (from Ch. 121 1/2, par. 1732)
Sec. 32. 
		Rules and interpretive opinions. 
		The Administrator may make
and enforce such reasonable rules as are necessary to administer and
enforce this Act. Such rules and regulations shall conform to and comply
with "The Illinois Administrative Procedure Act", approved September 22,
1975, as amended. The Administrator may in his discretion honor requests
for interpretive opinions. The Administrator shall maintain a complete
collection of his interpretive opinions which is properly indexed, a copy
of which shall be made available to any person upon request and payment of
a reasonable fee to be determined by the Administrator.
(Source: P.A. 85-551.)
(815 ILCS 705/33) (from Ch. 121 1/2, par. 1733)
Sec. 33. 
		Hearings. 
		(a) Notice required. If a hearing is requested or
ordered under any provision of this Act, the Administrator shall set the
matter for hearing and notice of the time and place for the hearing shall
be sent to the franchisor at least 7 days prior to the hearing.
(b) Manner of giving notice. Notice required by this Section is
sufficient if sent by registered or certified mail and addressed to the
franchisor at the address designated in the disclosure statement.
(c) Opportunity to be present and heard. The parties to any hearing
shall be accorded ample opportunity to present, in person or by counsel,
such statements, testimony, evidence and argument as may be pertinent.
(d) Record. All testimony taken at any hearing before the Administrator
shall be reported stenographically or by a sound recording device and a
full and complete record shall be kept of all proceedings.
(e) Written decisions required. After a hearing, the Administrator shall
issue a written decision modifying, vacating or extending the order and
shall state the reasons for his decision.
(Source: P.A. 85-551.)
(815 ILCS 705/34) (from Ch. 121 1/2, par. 1734)
Sec. 34. 
		Judicial review. 
		All final administrative decisions of the
Administrator hereunder shall be subject to judicial review pursuant to the
Administrative Review Law, as amended, and any
rules adopted pursuant thereto. The term "administrative decision" is
defined as in Section 3-101 of the Code of Civil Procedure.
(Source: P.A. 85-1209.)
(815 ILCS 705/35) (from Ch. 121 1/2, par. 1735)
Sec. 35. 
		Service of process. 
		Sufficient service of any process in any
action brought under this Act may be made by serving a copy thereof with
the agency designated to receive process in the disclosure statement filed
with the Administrator or in the absence of such agent at the principal
business address set forth in the disclosure statement. Where no disclosure
statement has been filed and personal jurisdiction cannot otherwise be
obtained in this State over a person who engaged in conduct prohibited or
made actionable by this Act or any rule or order hereunder, that conduct
shall be considered equivalent to the appointment of the Administrator to
be such person's attorney to receive service of any lawful process in any
noncriminal suit, action or proceeding against him or his successor,
executor, or administrator which grows out of that conduct and which is
brought under this Act or any rule or order hereunder, with the same force
and validity as if served on him personally. Service may be made by leaving
a copy of the process in the office of the Administrator, but it is not
effective unless (a) the plaintiff forthwith sends notice of the service
and a copy of the process by registered or certified mail to the defendant
or respondent at his last known address or takes other steps which are
reasonably calculated to give actual notice and (b) the plaintiff's
affidavit of compliance with this Section is filed in the case on or before
the return day of the process, if any, or within such further time as
the court allows.
(Source: P.A. 85-551.)
(815 ILCS 705/36) (from Ch. 121 1/2, par. 1736)
Sec. 36. 
		Books and records. 
		Every franchisor selling
franchises in this State shall at all times keep and maintain a complete
set of books, records and accounts of such sales.
(Source: P.A. 85-551.)
(815 ILCS 705/37) (from Ch. 121 1/2, par. 1737)
Sec. 37. 
		Public inspection. 
		(a) Generally. All disclosure statements
and other papers and documents received by the Administrator under this Act
shall be open to public inspection, except that the Administrator may, in
his discretion, withhold from public inspection any information the
disclosure of which is, in the judgment of the Administrator, not necessary
in the public interest or for the protection of franchisees. The
Administrator may publish any information filed with
him or obtained by him, if in the judgment of the Administrator, such
action is in the public interest. No provision of this Act authorizes the
Administrator or any of his assistants, clerks or deputies to disclose any
information withheld from public inspection except among themselves or when
necessary or appropriate in a proceeding or investigation under this Act or
to other federal or State regulatory agencies. No provision of this Act
either creates or derogates from any privilege which exists at common law
or otherwise when documentary or other evidence is sought under a subpoena
directed to the Administrator or any of his assistants, clerks or deputies.
(b) Restrictions on use. The Administrator and his employees may not use
for personal benefit any information which is obtained by them under this
Act and which is not then generally available to the public.
(Source: P.A. 85-551.)
(815 ILCS 705/38) (from Ch. 121 1/2, par. 1738)
Sec. 38. 
		Copies to be furnished. 
		On request and at such reasonable
charges as he prescribes by rule, the Administrator shall furnish to any
person photostatic
or other copies, certified under his seal of office if requested, of
any document which is retained as a matter of public record.  He shall not
charge or collect any fee for copies of any document furnished to public
officers for use in their official capacity.  In any judicial proceeding or
prosecution, any copy so certified is prima facie evidence of the contents
of the document certified.
(Source: P.A. 85-551.)
(815 ILCS 705/39) (from Ch. 121 1/2, par. 1739)
Sec. 39. 
		Destruction of records. 
		(a) Period of retention.  The
Administrator may destroy any disclosure statements or orders, together with
the files and folders, as useless or obsolete, 4 years after the date of
receipt or issuance.  A permanent record shall be maintained of any civil
or criminal enforcement of this Act by the Administrator.
(b) Microfilm.  Copies on microfilm or in other form which may be
retained by the Administrator in his discretion of any records destroyed
under authority of this Section shall be accepted for all purposes as
equivalent to the original when certified by the Administrator.
(Source: P.A. 85-551.)
(815 ILCS 705/40) (from Ch. 121 1/2, par. 1740)
Sec. 40. Fees.
(a) The Administrator shall charge and collect the fees
fixed by this Section, or as prescribed by rule of the Administrator.  All fees and charges collected under this Section
shall be transmitted to the State Treasurer at least weekly, accompanied by
a detailed statement thereof.  Such fees and charges shall be refundable at
the discretion of the Administrator.
(b) The fee for the initial registration of a franchise shall be $500.
(c) The fee for filing an amended disclosure statement shall be $100 if
the amendment pertains to a material change, otherwise $25.
(d) The fee for an interpretive opinion shall be $50.
(e) The fee for filing an initial large franchisor exemption under Section 200.202 of Title 14 of the  Illinois Administrative Code shall be $500 and the fee for renewals of this exemption shall be $100.
(f) The fee for filing an annual report shall be $100.
(Source: P.A. 96-648, eff. 10-1-09.)
(815 ILCS 705/41) (from Ch. 121 1/2, par. 1741)
Sec. 41. 
		Waivers void. 
		Any condition, stipulation, or provision
purporting to bind any person acquiring any franchise to waive compliance
with any provision of this Act or any other law of this State is void.
This Section shall not prevent any
person from entering into a settlement agreement or executing a general
release regarding a potential or actual lawsuit filed under any of the
provisions of this Act, nor shall it prevent the arbitration of any claim
pursuant to the provisions of Title 9 of the United States Code.
(Source: P.A. 88-256.)
(815 ILCS 705/42) (from Ch. 121 1/2, par. 1742)
Sec. 42. 
		Burden of proof. 
		In any proceeding under this Act, the
burden of proving an exemption or an exception from a definition is upon
the person claiming it.
(Source: P.A. 85-551.)
(815 ILCS 705/43) (from Ch. 121 1/2, par. 1743)
Sec. 43. 
		Construction. 
		This Act shall be liberally construed to
effect the purposes thereof.
(Source: P.A. 85-551.)
(815 ILCS 705/44) (from Ch. 121 1/2, par. 1744)
Sec. 44. 
		
		This Act shall not be construed to repeal any right, claim,
penalty, offense or punishment existing under The Franchise Disclosure Act
prior to the date this Act takes effect.  This Act shall apply only to
actions undertaken on and subsequent to the date this Act takes effect as
well as to all resulting rights, claims, penalties, offenses and punishment.
(Source: P.A. 85-551.)