Current through Register Vol. 48, No. 38, September 20, 2024
a)
Pursuant to Section 9 of the Act, the Administrator may by Order grant
exemptions from the registration and disclosure requirements of the Act. The
Administrator will consider whether to issue such an Order upon submission of
the following:
1) A cover letter describing
the basis for the exemption by reference to this Section and to Section 9 of
the Act, a list of administrative agencies (other franchise regulatory states
and the Federal Trade Commission) that have issued or denied exemptions or
opinions with copies of the exemptions or opinions, and a statement of the
number of franchises the franchisor intends to sell in Illinois in the ensuing
twelve months;
2) A list showing
all Illinois franchise sales since the most recent UFOC submitted with the
exemption application;
3) A UFOC
(Appendix A, Illustration L); and
4) A certification page (Appendix A,
Illustration G).
b)
Exemption requests will be granted only when in the public interest. An
exemption is considered in the public interest:
1) If the franchisor intends to sell only one
or two franchises in Illinois in the ensuing twelve months;
2) If the litigation and bankruptcy
disclosure is not materially adverse to the interests of prospective
franchisees;
3) If the franchisor
agrees to timely provide the franchisee with a UFOC disclosure statement;
and
4) If the franchisor obtains a
letter from the prospective franchisee's attorney, after issuance of the
exemption but within the time period described in Section 5(2) of the Act,
stating that he has explained the Act to his client, and the client does not
object to issuance of the exemption, and forwards the letter to the
Administrator. Prior to procurement of this letter, but after issuance of the
order of exemption, the franchisor may solicit franchisees but may not have a
contract signed or require a prospective franchisee or subfranchisor to pay
consideration.
c)
Application for exemption from Sections 5 and 10 of the Act may be made with
regard to the offer and sale of a single unit franchise in which the actual
minimum initial investment is in excess of $1,000,000. The Administrator will
consider whether to issue such an Order upon submission of the following:
1) The information required by subsection (a)
of this Section;
2) A list showing
all Illinois franchise sales since the most recent UFOC submitted with the
exemption application; and
3)
Application documents required by Section
200.600(a)(1) through
(7).
d) Every registered franchise and any
franchisor exempt under this Section must provide the prospective franchisee
with a UFOC disclosure document unless specifically excused from this
requirement by the Administrator.
