Louisiana Revised Statutes 51:1823 – Prohibited acts
Terms Used In Louisiana Revised Statutes 51:1823
- Agent: means a person who solicits prospective purchasers or negotiates on behalf of a seller. See Louisiana Revised Statutes 51:1821
- Business opportunity: means the sale or lease for an initial required consideration exceeding three hundred dollars of any goods or services which are transferred to a purchaser for the purpose of enabling the purchaser to start a business, and in which the seller or agent:
(a) Represents that the seller or an entity to which it will refer the purchaser, will provide or assist the purchaser in finding business locations on premises neither owned nor leased by the purchaser or seller for the use or operation of vending machines, racks, display cases, currency-operated amusement machines, or other similar devices; or
(b) Represents that the seller, or any entity to which it will refer the purchaser, will purchase any or all products to be sold, made, produced, fabricated, assembled, grown, bred, or modified by the purchaser using in whole or in part the supplies, services, or goods sold to the purchaser by the seller; or
(c) Guarantees that the purchaser is to derive income from the business opportunity which exceeds the price paid for the business opportunity, or that the seller is to refund all or part of the price paid for the business opportunity, or repurchase any of the products, equipment, supplies, or goods supplied by the seller, if the purchaser is unsatisfied with the business opportunity; or
(d) Represents that for a fee exceeding three hundred dollars the seller will provide a sales plan or marketing program which will enable the purchaser to derive income from the business opportunity which exceeds the price paid for the business opportunity. See Louisiana Revised Statutes 51:1821
- Contract: A legal written agreement that becomes binding when signed.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Seller: means a person or entity which sells or leases, or offers to sell or to lease a business opportunity. See Louisiana Revised Statutes 51:1821
- Service of process: The service of writs or summonses to the appropriate party.
No business opportunity seller or agent shall:
(1) Represent that a business opportunity provides income or earning potential of any kind unless the seller has documented data to substantiate the claims of income or earning potential and discloses this data to the prospective purchaser at the time such representations are made.
(2) Advertise or make any written reference to a specific range or level of income or earning potential without setting forth the following disclosure, with blanks completed in print as large or larger than that referring to income or earning potential:
“No assurance of earnings or ranges of earnings can be made. The number of purchasers who have earned more through this business than they invested is at least _________. This is ________ percent of the total number of purchasers. This information is current as of (date).
(3) Use the trademark, service mark, trade name, logotype, advertising, or other commercial symbol of any business which does not either control the ownership interest in the seller or expressly permit the seller to use its trademark, service mark, trade name, logotype, advertising, or other commercial symbol.
(4) Make or authorize the making of any reference to its compliance with this Chapter in any advertisement or contract with prospective purchasers.
(5) Use advertising which does not include the actual business name of the seller, and, if it differs, the name under which the business opportunity is operated, and the street address of the principal place of business of the seller.
(6) Fail to embody the sale or lease in a written agreement, or to include in that agreement all material statements, representations, or promises made orally prior to execution of the written agreement by the seller or agent, or both.
(7) Include in any agreement a waiver of the purchaser’s rights established by law.
(8) Offer, sell, or lease a business opportunity in Louisiana without appointing the secretary of state as its agent in Louisiana authorized to receive service of process.
(9) Fail to provide, upon request of a district attorney, the attorney general, or the assistant secretary, documented data to substantiate claims of income or earning potential.
Added by Acts 1981, No. 814, §1.