Michigan
Franchise Registration
Michigan
Michigan Franchise Laws
In Michigan, a franchise is defined as a oral or written contract or agreement, either express or implied between two or more persons in which:
- A franchisee is granted the right to engage in the business of offering, selling, or distributing goods or services under a marketing plan or system prescribed in substantial part by a franchisor.
- A franchisee is granted the right to engage in the business of offering, selling, or distributing goods or services substantially associated with the franchisor’s trademark, service mark, trade name, logotype, advertising, or other commercial symbol designating the franchisor or its affiliate.
- The franchisee is required to pay, directly or indirectly, a franchise fee, which does not exceed $500. Mich. Comp. Laws §445.1506(1)(c).
Michigan Franchise Notice Filing
Michigan requires the filing of an annual Notice of Intent along with a $250 fee to offer or sell franchises. Mich. Comp. Laws §445.1507a.
Additionally, Michigan requires the inclusion of state specific addendum to be placed immediately following the cover sheet of the FDD. Mich. Comp. Laws § 445.1508 (3).
Michigan Franchise Relationships and Termination Laws
Michigan has certain laws that govern franchise relationships and termination. Under Michigan law, a franchisee may not be terminated without good cause and must be provided a reasonable opportunity to cure that need not exceed 30 days. Mich. Comp. Laws §445.1527(c)
Michigan Business Opportunity Laws
Michigan’s Business Opportunity Laws define a “Business opportunity” as the sale or lease of any products, equipment, supplies, or services for the purpose of enabling the purchaser to start a business, and in which the seller represents 1 or more of the following:
- That the seller will provide locations or assist the purchaser in finding locations for the use or operation of vending machines, racks, display cases, or other similar devices, or currency operated amusement machines or devices, on premises neither owned nor leased by the purchaser or seller.
- That the seller may, in the ordinary course of business, purchase any or all products made, produced, fabricated, grown, bred, or modified by the purchaser using whole or in part the supplies, services, or chattels sold to the purchaser.
- The seller guarantees that the purchaser will derive income from the business opportunity that exceeds the price paid for the business opportunity; or that the seller will refund all or part of the price paid for the business opportunity, or repurchase any of the products, equipment, supplies, or chattels supplied by the seller, if the purchaser is unsatisfied with the business opportunity. As used in this subparagraph, “guarantee” means a written or oral representation that would cause a reasonable person in the purchaser’s position to believe that income is assured.
- That the seller will provide a sales program or marketing program which will enable the purchaser to derive income from the business opportunity that exceeds the price paid for the business opportunity. This subparagraph does not apply to the sale of a marketing program made in conjunction with the licensing of a federally registered trademark or a federally registered service mark, or to the sale of a business opportunity for which the purchaser pays less than $500.00 in total for the business opportunity from any time before the date of sale to any time within 6 months after the date of sale.
Mich. Comp. Laws §445.902(1)(a))
A business opportunity does not include a sale of a franchise as defined in section 2 of Michigan’s franchise investment law.
Mich. Comp. Laws §445.902(2))
Michigan Business Opportunity Requirements
Before selling business opportunities in the state of Michigan, a notice filing must first be made with the attorney general. The notice must contain the following: (i) name of the seller, (ii) name under which the seller intends to do business, (iii) the seller’s principal business address, (iv) a consent to service of process for out-of-state sellers. Mich. Comp. Laws § 445.903b(1).
More Information About Michigan's Franchise & Business Opportunity Laws
If you offer a business opportunity in Michigan, we can help you determine if, and how, your company must comply with Michigan’s Franchise or Business Opportunity Laws.
If you would like to learn more about our franchise services and franchise compliance in Michigan, contact us or call (757) 263-4596 to schedule a consultation. You can also visit our interactive map to explore franchise laws in other states.
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