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91_HB3140
LRB9109948WHcs
1 AN ACT to amend the Franchise Disclosure Act of 1987 by
2 changing Section 5.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Franchise Disclosure Act of 1987 is
6 amended by changing Section 5 as follows:
7 (815 ILCS 705/5) (from Ch. 121 1/2, par. 1705)
8 Sec. 5. Prohibited practices.
9 (1) Sale of unregistered franchise unlawful. It is
10 unlawful for any person to offer or sell any franchise
11 required to be registered under this Act unless the franchise
12 has been registered under this Act or is exempt under this
13 Act.
14 (2) Failure to deliver a disclosure statement unlawful.
15 It is unlawful for any person to offer or sell any franchise
16 which is required to be registered under this Act without
17 first providing to the prospective franchisee at least 14
18 days prior to the execution by the prospective franchisee of
19 any binding franchise or other agreement, or at least 14
20 business days prior to the receipt by such person of any
21 consideration, whichever occurs first, a copy of a disclosure
22 statement meeting the requirements of this Act and registered
23 by the Administrator, together with a copy of all proposed
24 agreements relating to the sale of the franchise. For the
25 purposes of this Act, delivery of a disclosure statement to a
26 general partner of a partnership shall constitute delivery to
27 the partnership and its partners and delivery of a disclosure
28 statement to a principal officer of a corporation shall
29 constitute delivery to the corporation and its shareholders.
30 (3) Sale of franchise by unregistered franchise broker
31 unlawful. It is unlawful for any franchise required to be
-2- LRB9109948WHcs
1 registered under this Act to be offered for sale or sold in
2 this State by a franchise broker subject to this Act who is
3 not first registered under this Act unless exempt from
4 registration.
5 (4) Filing of untrue report unlawful. It is unlawful for
6 any person to make or cause to be made any untrue statement
7 of a material fact in any application, notice, or report
8 filed with the Administrator, or to omit to state in any
9 application, notice, or report any material fact, or to fail
10 to notify the Administrator of any material change in such
11 application, notice, or report, as required by this Act.
12 (Source: P.A. 90-642, eff. 7-24-98.)
13 Section 99. Effective date. This Act takes effect upon
14 becoming law.