Utah Administrative Code
Topic - Commerce
Title R152 - Consumer Protection
Rule R152-11 - Utah Consumer Sales Practices Act
Section R152-11-11 - Franchises, Distributorships, Referral Sales
Universal Citation: UT Admin Code R 152-11-11
Current through Bulletin 2024-06, March 15, 2024
A. Definitions. As used in this chapter, the following words and terms shall have the following meanings, unless some other meaning is plainly indicated:
(1) "Referral
Selling" means any consumer transaction where the seller gives or offers a
rebate or discount to the buyer as an inducement for a sale in consideration of
the buyer's providing the seller with the names of prospective
purchasers.
(2) The term "franchise
or distributorship" means a contract or agreement requiring substantial capital
investment, either expressed or implied, whether oral or written, between two
or more persons:
(a) Wherein a commercial
relationship of definite duration or continuing indefinite duration is
involved;
(b) Wherein the
purchaser, is granted the right to offer, sell and distribute consumer
commodities manufactured, processed, distributed or, in the case of services,
organized and directed by the seller; and the purchaser has not been previously
engaged in such business opportunity;
(c) Wherein the franchise or distributorship
as an independent business constitutes a component of seller's distribution
system; or
(d) Wherein the
operation of the purchaser's business is substantially reliant on sellers for
the basic supply of consumer commodities.
B. Franchises and Distributorships. It shall be an unfair or deceptive act or practice for any person in the trade or commerce of establishing a franchise, distributorship to:
(1) Misrepresent the prospects or chances for
success of a proposed or existing franchise or distributorship;
(2) Misrepresent by failure to disclose or
otherwise, the known required total investment for such franchise or
distributorship;
(3) Misrepresent
or fail to disclose efforts to sell or establish more franchises or
distributorships than is reasonable to expect the market or market area for the
particular franchise or distributorship to sustain;
(4) Misrepresent the quantity or quality of
the products to be sold or distributed through the franchise or
distributorship;
(5) Misrepresent
the training and management assistance available to the franchise or
distributorship;
(6) Misrepresent
the amount of profits, net or gross, the franchisee can expect from the
operation of the franchise or distributorship;
(7) Misrepresent the size, choice, potential
or demographic feature of a franchise territory or misrepresent the number of
present or future franchises or distributorships within the franchise
territory;
(8) Misrepresent by
failure to disclose or otherwise, the termination, transfer or renewal
provision of a franchise or distributorship agreement;
(9) Falsely claim or infer that a primary
marketer of trademark products or services sponsors or participates directly or
indirectly in the franchise or distributorship operation;
(10) Assign a so-called exclusive territory
encompassing the same area to more than one franchise;
(11) Provide vending locations for which
written authorizations have not been granted by the property owners or lessees
of the premises;
(12) Provide
vending machines or displays of a brand or kind different from or inferior to
those promised by the seller;
(13)
Fail to provide to the purchaser a written contract which includes the
following provisions:
(a) The total financial
obligation of the purchaser to the seller;
(b) The date of delivery of the purchaser
consumer commodity to the purchaser if the seller is responsible for delivery
of such consumer commodity;
(c) The
description and quantity of consumer commodities to be delivered to the
purchaser if the seller is responsible for delivery of such consumer
commodities; and
(d) All other
disclosures and provisions required in the preceding subsections;
(14) Fail to honor his contract as
required in this section with the purchaser.
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