Search OpenLegislation Statutes
This entry was published on 2014-09-22
The selection dates indicate all change milestones for the entire volume, not just the location being viewed. Specifying a milestone date will retrieve the most recent version of the location before that date.
Civil remedies
General Business (GBS) CHAPTER 20, ARTICLE 33
§ 691. Civil remedies. 1. A person who offers or sells a franchise in
violation of section six hundred eighty-three, six hundred eighty-four
or six hundred eighty-seven of this article is liable to the person
purchasing the franchise for damages and, if such violation is willful
and material, for rescission, with interest at six percent per year from
the date of purchase, and reasonable attorney fees and court costs.

2. A person may not file or maintain suit under this section if the
franchisee or such person received a written offer before suit, and at a
time when he owned the franchise, to refund the consideration paid
together with interest at six percent per year from the date of payment,
less the amount of income earned by the franchisee from the franchise,
conditioned only upon tender by the person of all items received by him
for the consideration and not sold, and failed to accept the offer
within thirty days of its receipt, provided that the offering documents
are submitted to the department for approval at least ten business days
prior to submission to the franchisee. The rescission offer shall recite
the provisions of this section. If the franchise involves a substantial
building or substantial equipment or fixtures and a significant period
of time has elapsed since the sale of the franchise to the franchisee,
the department in approving a rescission offer may approve an equitable
offer recognizing depreciation, amortization, and other factors which
bear upon the value of the franchise being returned to the franchisor.
Nothing in this subdivision shall prohibit settlement of any dispute
arising under or involving claims based on this chapter, with or without
approval of the department.

3. A person who directly or indirectly controls a person liable under
this article, a partner in a firm so liable, a principal executive
officer or director of a corporation so liable, a person occupying a
similar status or performing similar functions, and an employee of a
person so liable, who materially aids in the act of transaction
constituting the violation, is also liable jointly and severally with
and to the same extent as the controlled person, partnership,
corporation or employer. It shall be a defense to any action based upon
such liability that the defendant did not know or could not have known
by the exercise of due diligence the facts upon which the action is

4. An action shall not be maintained to enforce a liability created
under this section unless brought before the expiration of three years
after the act or transaction constituting the violation.

5. Except as explicitly provided in this article, civil liability in
favor of any private party shall not arise against a person by
implication from or as a result of the violation of a provision of this
article or a rule, regulation or order hereunder. Nothing in this
article shall limit a liability which may exist by virtue of any other
statute or under common law if this article were not in effect.