§ 19-28.1-18. Enforcement. (a) The director may by order deny a franchise registration application or suspend or revoke the effectiveness of registration of a franchise if:

(1) The franchisor failed to comply with a provision of this act or a rule, order, or condition of the director under this act;

(2) The registration application is incomplete or inaccurate in any material respect;

(3) The registration application includes a false or misleading statement of a material fact or omits to state a material fact required to be stated or necessary to make a required statement not misleading;

(4) The sale of the franchise would constitute a misrepresentation, deceit, or fraud upon an offeree;

(5) A person is engaging in, has engaged in, or is about to engage in a false, fraudulent, or deceptive practice or a device, scheme, or artifice to defraud in connection with the offer or sale of the franchise;

(6) A partner, officer, or director of the franchisor, or a person who occupies a similar status or performs similar functions, or a person who directly or indirectly controls or is controlled by the franchisor is or has been found guilty or liable in a proceeding required to be described in the registration application and the involvement of the person creates an unreasonable risk to franchisees or offerees;

(7) An advertisement prohibited by the act has been used in connection with the offer or sale of a franchise;

(8) The franchisor's enterprise or method of business includes activities that are illegal where performed; or

(9) The financial condition of the franchisor impairs, or would impair, the ability of the franchisor to fulfill obligations under the franchise agreement.

(b) The director may by order deny, suspend, or revoke an exemption under § 19-28.1-6 on any of the grounds described in subsection (a).

(c) When it appears to the director that any person has violated, or is about to violate, a provision of this act or a rule or order under this act, the director may do any or all of the following:

(1) Issue an order directing the person to cease and desist from continuing the act or practice;

(2) Bring an action in a court of competent jurisdiction to enjoin the act or practice and to enforce compliance with this act or a rule or order under this act. Upon a proper showing, the court may grant a permanent or preliminary injunction, restraining order, or writ of mandate. The court may grant appropriate ancillary relief, including appointment of a receiver or conservator for the defendant or the defendant's assets. The court may exercise all powers necessary or appropriate for these purposes. The court may not require the director to post a bond; or

(3) Bring an action on behalf of the state in any court of competent jurisdiction against any officer, director, trustee, manager, or agent of the franchisor or against a franchisor to recover a penalty in a sum not to exceed fifty thousand dollars ($50,000) per violation of this act. The action must be brought within four (4) years after the commission of the act or practice on which it is based.

(d) The director may impose an administrative assessment against a person named in an order issued under subsection (a) or (c) of this section or § 19-28.1-19. The amount of the administrative assessment may not exceed five thousand dollars ($5,000) for each act or omission that constitutes a basis for issuing the order. The administrative assessment may only be imposed:

(1) Following an opportunity for a hearing under § 19-28.1-25 if the notice delivered to all named persons includes notice of the director's authority to impose an administrative assessment under this section, or

(2) As part of an order issued under subsection (a) or (b) of this section or § 19-28.1-19, if the order is stipulated to by each person subject to the administrative assessment.

(e) When the director prevails in an action under this act, he or she is entitled to recover the costs, expenses, and experts fees' incurred incident to the action.

(f) In connection with an action or proceeding under this section, the director may exercise any of the powers specified in § 19-28.1-26.

History of Section. (P.L. 1993, ch. 395, § 2.)