A:  A business opportunity is defined by statute to be an assisted marketing plan.  An assisted marketing plan has the following characteristics:

1. It is the sale or lease of any products, equipment, supplies, or services;
2. Consideration of $300 or more is paid by the purchaser;
3. The purpose is to enable the purchaser to start a business; and
4. The seller represents at least one of the following:
   1. the seller will provide locations or assist the purchaser in finding locations for the use or operations of vending machines, racks, display cases, or other similar devises, or currency operated amusement machines or devices, on premises neither owned nor leased by the purchaser or seller;
   2. the seller will purchase any or all of the products made, produced fabricated, grown, or modified by the purchaser, using the supplies, services, or property sold to the purchaser;
   3. the seller will provide the purchaser with a guarantee that the purchaser will receive income from the business opportunity that exceeds the price paid for the business opportunity, or the seller will repurchase any of the products, equipment, supplies, or other property supplied by the seller if the purchaser is dissatisfied with the business opportunity; or
   4. that upon payment by the purchaser of $300 or more, the seller will provide a sales program or marketing program that will enable the purchaser to derive income from the business opportunity that exceeds the price paid for the business opportunity.

A business opportunity does not include

1. the sale of an ongoing business when the owner sells and intends to sell only that one assisted marketing plan;
2. not-for-profit sale of sales demonstration equipment, materials, or sample for a total price of $300 or less; or
3. the sale of a package franchise or a product franchise defined by and in compliance with Federal Trade Commission rules governing franchise and business opportunity ventures.

A:  The Business Opportunity Disclosure Act requires sellers of business opportunities to file with the division the specific information that is contained in the seller’s disclosure statement or prospectus which it is required to provide to its prospective purchasers.  In addition, the seller must disclose the name and address of its registered agent and any promotional materials that it uses.  There is no required form to be used for filing the information.  However, it is helpful to the division’s review of the filing if the information is organized similar to the requirements of the statute.

A:  It depends on what information needs to be updated.  The seller’s disclosure document must be current as of the seller’s most recent fiscal year, or no later than 90 days after the close of its most recent fiscal year.  A seller must amend any information that it files if there is any material change in the information.  The amended information must be filed within a reasonable time after the change.  "Material change" means any change in information where there is a reasonable likelihood the decision of the prospective purchaser to purchase or not to purchase would be influenced by the change.

A:  Franchisors who are in compliance with Federal Trade Commission rules are exempt from filing the information that sellers of business opportunities are required to file.  Instead, these franchisors are required to file with the division a "Notice of Exemption Filing"  The division has a form for this notice.  The division will grant the exemption status for a period of one year.  The franchisor may renew its exemption each year by filing a new Notice of Exemption.

A:  Yes.  The fees are set in accordance with statute and rule.  The fees for the seller’s information filing are $200.00.  The fees for the Notice of Exemption filing are $100.00.

A:  The seller will be subject to a statutory fine of $2,500.00 for each violation of the statute.  In addition, the seller is subject to an order to cease and desist if the information is not filed within fifteen (15) days of receiving the division’s written demand.  If the seller violates this order, it will be subject to a civil penalty of $5,000.00 for each violation.  Further, if the seller also fails to provide the information in a single disclosure statement or prospectus to the purchaser at least ten days prior to execution of the agreement or payment, then the purchaser is entitled to rescind the agreement, to an award of attorney’s fees in enforcing that rescission, and to a judgment for the amount of the greater of $2,000.00 or actual damages.

A:  The franchisor will be subject to a statutory fine of $2,500.00 for each violation of the statute.  The franchisor will also be subject to a cease and desist order.