Virginia Administrative Code › Title 21 - SECURITIES AND RETAIL FRANCHISING › Agency 5 - STATE CORPORATION COMMISSION › Chapter 110 - RETAIL FRANCHISING ACT RULES › Section 21VAC5-110-10 - Definitions

Current through Register Vol. 40, No. 24, July 15, 2024
"Action" includes complaints, cross claims, counterclaims,
				  and third-party complaints in a judicial action or proceeding, and their
				  equivalents in an administrative action or arbitration.
"Affiliate" means an entity controlled by, controlling, or
				  under common control with, another entity.
"Commission" means Virginia State Corporation
				  Commission.
"Confidentiality clause" means any contract, order, or
				  settlement provision that directly or indirectly restricts a current or former
				  franchisee from discussing his personal experience as a franchisee in the
				  franchisor's system with any prospective franchisee. It does not include
				  clauses that protect franchisor's trademarks or other proprietary
				  information.
"Disclose," "state," "describe," and "list" each mean to
				  present all material facts accurately, clearly, concisely, and legibly in plain
				  English.
"Effective date" means the date on which the franchise
				  becomes registered under the provisions of § 13.1-561 of the Code of
				  Virginia.
"Effective registration" means authorization to offer and
				  sell one or more franchises provided that the initial contracts or agreements
				  are substantially identical in their terms or provisions. Whenever the
				  franchisor offers or sells more than one franchise and the resulting contracts
				  or agreements vary substantially in their terms or provisions, separate
				  franchises will be deemed to have been offered or sold and separate
				  registration will be required. For the purpose of this rule, substantial
				  variation in the contract will relate without limitation to different products,
				  services, fees charged, dues imposed, obligations incurred or investments
				  required to be made by contract or agreement.
"FDD" means Franchise Disclosure Document.
"Financial performance representation" means any
				  representation, including any oral, written, or visual representation, to a
				  prospective franchisee, including a representation in the general media, that
				  states, expressly or by implication, a specific level or range of actual or
				  potential sales, income, gross profits, or net profits. The term includes a
				  chart, table, or mathematical calculation that shows possible results based on
				  a combination of variables.
"Fiscal year" refers to the franchisor's fiscal year.
"Franchise seller" means a person that offers to sell, sells,
				  or arranges for the sale of a franchise. It includes the franchisor and the
				  franchisor's employees, representatives, agents, subfranchisors, and
				  third-party brokers who are involved in franchise sales activities. It does not
				  include existing franchisees who sell only their own outlet and who are
				  otherwise not engaged in franchise sales on behalf of the franchisor.
"Material change" includes a fact, circumstance, or condition
				  which would have a substantial likelihood of influencing a reasonable
				  prospective franchisee in the making of a decision relating to the purchase of
				  a franchise.
"Parent" means an entity that controls another entity
				  directly or indirectly through one or more subsidiaries.
"Person" means any individual, group, association, limited or
				  general partnership, corporation, or any other entity.
"Plain English" means the organization of information and
				  language usage understandable by a person unfamiliar with the franchise
				  business. It incorporates short sentences, definite, concrete, everyday
				  language, active voice, and tabular presentation of information where possible.
				  It avoids legal jargon, highly technical business terms, and multiple
				  negatives.
"Predecessor" means a person from whom the franchisor
				  acquired, directly or indirectly, the major portion of the franchisor's
				  assets.
"Principal business address" means the street address of a
				  person's home office in the United States. A principal business address cannot
				  be a post office box or private mail drop.
"Prospective franchisee" means any person (including any
				  agent, representative, or employee) who approaches or is approached by a
				  franchise seller to discuss the possible establishment of a franchise
				  relationship.
"Signature" means a person's affirmative step to authenticate
				  his identity. It includes a person's handwritten signature, as well as a
				  person's use of security codes, passwords, electronic signatures, and similar
				  devices to authenticate his identity.
"Trademark" includes trademarks, service marks, names, logos,
				  and other commercial symbols.
"Virginia Retail Franchising Act" means § 13.1-557 et
				  seq. of the Code of Virginia.
Statutory Authority
§§ 12.1-13 and 13.1-572 of the Code of Virginia.