Issue 6 -- New Laws and Regulations

Business Opportunities-Utah

A new law in Utah increases the dollar threshold at which assisted marketing plans become subject to the state's Business Opportunity Disclosure Act. The threshold amount has been raised from $300 to $500. House Bill No. 78 became effective May 8, 2012.

Motor Vehicles-Utah

Senate Bill No. 68 amends Utah's motor vehicle dealer law to prohibit a franchisor from: 1) coercing or requiring a franchisee to establish prices at which the franchisee is required to sell certain products or services; 2) coercing or requiring a franchisee to construct a new dealer facility or materially alter or remodel an existing dealer facility under certain circumstances; 3) requiring a franchisee to purchase certain goods or services from a specified vendor under certain circumstances; and 4) coercing or requiring a franchisee to lease a sign or other franchisor image element from the franchisor or affiliate without providing the franchisee the right to purchase from a vendor of the franchisee's choosing. The new law became effective May 8, 2012. Click here for the full text of the bill.

New Business Opportunity Legislation-Arizona

The governor of Arizona has signed legislation that will significantly regulate the activities of business opportunity sellers in the state. The law requires sellers of business opportunities to provide potential purchasers with a disclosure document at least five business days prior to execution of any agreement or payment of money. Under the new law, sellers of business opportunities are required to provide a registration statement to the state and provide potential buyers with extensive written disclosures. In addition, the law allows a consumer to terminate a business opportunity agreement for any reason within ten business days after the date the consumer signs the business opportunity contract or agreement. As in other states, the law provides a broad definition of "business opportunity," but specifically carves out the sale of franchises as defined under the Federal Trade Commission's Franchise Rule.