Michigan has specific laws that govern franchises within the state.
Here are the key aspects of franchise laws in Michigan:
1. Franchise Investment Law: Michigan has a Franchise Investment Law that regulates the sale of franchises within the state. Franchisors are required to register their franchise offering with the Michigan Corporations, Securities & Commercial Licensing Bureau before offering or selling franchises. They must provide a Franchise Disclosure Document (FDD) containing detailed information about the franchise, including financial statements, fees, obligations, territory rights, and other crucial details.
2. FDD Requirements: The FDD serves as a comprehensive document providing potential franchisees with information essential to making an informed decision about the franchise opportunity. It includes details about the franchisor’s background, the franchise system, initial investment, ongoing fees, obligations, and other relevant information.
3. Franchise Relationship Law: Michigan has laws that regulate the ongoing relationship between franchisors and franchisees. These laws cover aspects such as termination, non-renewal, transfer of the franchise agreement, and the obligation of good faith and fair dealing between the parties.
4. Termination and Non-Renewal: Franchisees in Michigan are granted certain rights in cases of termination or non-renewal of their franchise agreement. Franchisors are generally required to provide notice and sometimes an opportunity for the franchisee to address any identified issues before termination.
5. Remedies and Enforcement: Violations of franchise laws in Michigan can result in penalties, fines, and potential liabilities for franchisors. Franchisees might have remedies available to them, such as damages or rescission of the franchise agreement, if the franchisor breaches these laws.
Understanding and complying with Michigan franchise laws are crucial for both franchisors and franchisees to ensure a fair and transparent relationship. Seeking legal advice from professionals experienced in franchise laws in Michigan is advisable for parties involved in a franchise agreement within the state.
- Michigan Consumer Protection Division
Franchise Section
PO Box 30213
Lansing, MI 48909
877-765-8388