Md. Code Regs. 02.02.08.01

Current through Register Vol. 51, No. 12, June 14, 2024

Section 02.02.08.01 - Definitions

A. For purposes of this chapter and of the Maryland Franchise Registration and Disclosure Law, Business Regulation Article, Title 14, Subtitle 2, Annotated Code of Maryland, the following terms have the meanings indicated.

B. Terms Defined.

(1) Except as used in the Uniform Franchise Offering Circular, "affiliate" means a person that, directly or indirectly, controls, is controlled by, or is under common control with, another person.

(2) "Commissioner" means the Securities Commissioner in the Office of the Attorney General or the designated agent of the Commissioner.

(3) "Division" means the Division of Securities in the Office of the Attorney General.

(4) Earnings Claim.

(a) "Earnings claim" means information given to a prospective franchisee by, on behalf of, or at the direction of the franchisor or its agent, from which a specific level or range of actual or potential sales, cost, income, or profit from franchised or nonfranchised units may be ascertained.

(b) "Earnings claim" includes, but is not necessarily limited to, a chart, table, or mathematical calculation presented to demonstrate possible results based on a combination of variables such as multiples of prices and quantity to reflect gross sales.

(c) "Earnings claim" includes a representation of a franchise offering that is described in terms of the amount or value of revenue, sales, income, contracts, or business intended to be provided to a franchisee within a specified period of time.

(5) "Franchise" has the meaning stated in the Maryland Franchise Law, Business Regulation Article, § 14-201(e), Annotated Code of Maryland.

(6) "Franchise fee" has the meaning stated in the Maryland Franchise Law, Business Regulation Article, § 14-201(g), Annotated Code of Maryland.

(7) "Maryland Franchise Offering Circular (MFOC)" means a document prepared in accordance with Regulation .04 of this chapter.

(8) "Maryland Franchise Registration and Disclosure Law" and the "Maryland Franchise Law" mean Business Regulation Article, Title 14, Subtitle 2, Annotated Code of Maryland.

(9) "Material change", for purposes of the Maryland Franchise Law, Business Regulation Article, § 14-220, Annotated Code of Maryland, and Regulation .06 of this chapter, includes, but is not limited to:

(a) The termination, in any manner, of more than 10 percent of the franchises of the franchisor that are located in the State during any 3-month period;

(b) The termination, in any manner, of more than 5 percent of all franchises of the franchisor regardless of location during any 3-month period;

(c) A reorganization of the franchisor;

(d) A change in control, corporate name, or state of incorporation of the franchisor;

(e) The commencement of any new product, service, or model line requiring, directly or indirectly, additional investment by any franchisee; and

(f) The discontinuation or modification of the marketing plan or system of any product or service of the franchisor which accounts for at least 20 percent of the annual gross sales of the franchisor.

(10) "Person" has the meaning stated in Business Regulation Article, § 1-101(g), Annotated Code of Maryland.

(11) For purposes of the Maryland Franchise Law, Business Regulation Article, § 14-203, Annotated Code of Maryland, the Maryland edition of a "publication" is considered a separate "publication" if the Maryland edition does not carry the same advertising as other editions of the publication.

(12) "Uniform Franchise Offering Circular (UFOC)" means the Uniform Franchise Offering Circular Guidelines adopted by the North American Securities Administrators Association, Inc., on April 25, 1993, which is incorporated by reference in Regulation .04A of this chapter.

Md. Code Regs. 02.02.08.01

Regulations .01 adopted as an emergency provision effective December 2, 1977 (4:26 Md. R. 2005); emergency status extended at 5:8 Md. R. 587
Regulations .01 adopted effective May 5, 1978 (5:9 Md. R. 683) (Recodified from COMAR 02.02.04 to 02.02.10)
______ Regulations .01 under COMAR 02.02.10 repealed effective January 17, 1994 (21:1 Md. R. 27)
Regulations .01 adopted effective January 17, 1994 (21:1 Md. R. 27)
Regulation .01B amended effective May 23, 1994 (21:10 Md. R. 840)