§ 19-28.1-3. Definitions. When used in this act, unless the context otherwise requires:

(1) "Act" means the Rhode Island Franchise Investment Act.

(2) "Advertisement" means a communication published in connection with an offer or sale of a franchise.

(3) "Affiliate" means a person controlling, controlled by, or under common control with another person; every officer or director of the person; and every person occupying a similar status or performing similar functions.

(4) "Calendar day" means every day of the week, including weekends.

(5) "Director" means the director of business regulation.

(6) "Disclosure document" means the uniform franchise offering circular as adopted and amended by the North American Securities Administrators Association, Inc.

(7) "Franchise" means:

(i) An oral or written agreement, either express or implied, that:

(A) Grants the right to distribute goods or provide services under a marketing plan prescribed or suggested in substantial part by the franchisor;

(B) Requires payment of a franchise fee in excess of five hundred dollars ($500) to a franchisor or its affiliate; and

(C) Allows the franchise business to be substantially associated with a trademark, service mark, trade name, logotype, advertising, or other commercial symbol of or designating the franchisor or its affiliate; or

(ii) A master franchise.

(8) "Franchisee" means a person to whom a franchise is granted. Franchisee includes:

(i) A subfranchisor with regard to its relationship with a franchisor; and

(ii) A subfranchisee with regard to its relationship with a subfranchisor.

(9) "Franchise fee" means a direct or indirect payment to purchase or operate a franchise. Franchise fee does not include:

(i) Payment of a reasonable service charge to the issuer of a credit card by an establishment accepting the credit card;

(ii) Payment to a trading stamp company by a person issuing trading stamps in connection with a retail sale; or

(iii) Agreement to purchase at a bona fide wholesale price a reasonable quantity of tangible goods for resale.

(10) "Franchisor" means a person who grants a franchise. Franchisor includes a subfranchisor with regard to its relationship with a franchisee, unless stated otherwise in this act.

(11) "Fraud" and "deceit" are not limited to common law fraud and deceit.

(12) "Marketing plan" means a plan or system concerning a material aspect of conducting business. Indicia of a marketing plan include:

(i) Price specifications, special-pricing systems, or discount plans;

(ii) Sales or display equipment or merchandising devices;

(iii) Sales techniques;

(iv) Promotional or advertising materials or cooperative advertising;

(v) Training regarding the promotion, operation, or management of the business; or

(vi) Operational, managerial, technical, or financial guidelines or assistance.

(13) "Master franchise" means an agreement, express or implied, oral or written, by which a person pays a franchisor for the right to sell or negotiate the sale of franchises.

(14) "Offer" or "offer to sell" means every attempt to offer or to dispose of, or solicitation of an offer to buy, a franchise or interest in a franchise for value.

(15) "Order" means a consent, authorization, approval, or prohibition issued by the director in a specific matter.

(16) "Person" means an individual or any other legal or commercial entity.

(17) "Publish" means to circulate generally by mail, or print media or electronic media, or otherwise to disseminate generally to the public.

(18) "Registration application" means an initial franchise application on the uniform franchise-registration application, as adopted and amended by the North American Securities Administrators Association, Inc. and the amendment or renewal of the application.

(19) "Sale" or "sell" means every contract or agreement of sale of, contract to sell, or a disposition of a franchise or interest in a franchise for value.

(20) "Salesperson" means a person employed by or representing a franchisor in effecting, or attempting to effect, the offer or sale of a franchise.

(21) "Subfranchisee" means a person who is granted a franchise or subfranchise from the subfranchisor.

(22) "Subfranchisor" means a person who is granted a master franchise.

(23) "This state" means Rhode Island.

History of Section. (P.L. 1993, ch. 395, § 2; P.L. 2016, ch. 153, § 2; P.L. 2016, ch. 159, § 2.)