Michigan Administrative Code › Department - Attorney General › Consumer Protection and Charitable Trusts Division › Franchises › Part 7 - FRANCHISE AGENTS › Section R. 445.704 - Denial, suspension, or revocation of registration

Current through Vol. 24-12, July 15, 2024
Rule 704. The administrator may, by order, deny, suspend,
					 or revoke a registration of a franchise agent if the administrator finds that
					 the order is in the public interest and the applicant or registrant or a person
					 directly or indirectly controlling the applicant or registrant:
(a) Has filed an application for registration
				  which, as of its effective date or as of any date after filing in the case of
				  an order denying effectiveness, was incomplete in a material respect or
				  contained a statement which was, in light of the circumstances under which it
				  was made, false or misleading with respect to a material fact.
(b) Has violated or failed to comply with the
				  act, or a rule or an order under the act.
(c) Has been convicted of a misdemeanor
				  involving moral turpitude, or of a felony.
(d) Is the subject of a final administrative
				  order of a state or federal agency relating to, or is permanently or
				  temporarily enjoined by a court of competent jurisdiction from engaging in or
				  continuing any conduct or practice involving any aspect of, the securities,
				  franchise, real estate, or insurance business.
(e) Is the subject of an order of the
				  administrator denying, suspending, or revoking registration as a broker-dealer,
				  agent, investment advisor, or franchise agent under part 6 or 7 of these rules
				  or other similar registration.
(f)
				  Is the subject of an order entered by the securities or franchise administrator
				  of another state, or by the securities and exchange commission, denying or
				  revoking registration as a broker-dealer, agent, or investment advisor, or the
				  substantial equivalent of these terms, or is the subject of an order of the
				  securities and exchange commission suspending or expelling that person from a
				  national securities exchange or national securities association registered
				  under the securities exchange act of 1934, or is the subject of a United States
				  post office fraud order.
(g) Has
				  engaged in dishonest or unethical business practices, including, but not
				  limited to, the following practices:
(i)
				  Recommending to a franchisee the purchase, sale, or exchange of a franchise
				  without reasonable grounds to believe that the recommendation is suitable for
				  the person.
(ii) Acting as agent
				  for both buyer and seller without fully disclosing the relationship to both
				  parties.
(iii) Charging the
				  franchisee or franchisor more than a reasonable commission in connection with
				  the sale.
(iv) Personally borrowing
				  money from a present or prospective franchisee.
(v) Effecting transactions not reported to
				  the franchisor.
(vi) Operating an
				  account under a name not registered with the administrator.
(vii) Representing to a franchisee that, as a
				  condition of realizing significant earnings from the franchise, the franchisee
				  may have to recruit others who may likewise invest in a franchise or
				  distributorship, or require that the franchisee shall so recruit.