Does the Michigan Franchise Investment Law apply to all Crown Gold Exchange franchise agreements?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
(THE FOLLOWING APPLIES TO TRANSACTIONS GOVERNED BY THE MICHIGAN FRANCHISE INVESTMENT LAW ONLY)
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise:
- (a) A prohibition on the right of a franchisee to join an association of franchisees.
- (b) A requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel which deprives a franchisee of rights and protection provided in this act. This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.
- (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause. Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.
- (d) A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings. Personalized materials which have no value to the franchisor and inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation. This subsection applies only if: (i) the term of the franchise is less than 5 years and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least 6 months advance notice of franchisor's intent not to renew the franchise.
- (e) A provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class or type under similar circumstances. This section does not require a renewal provision.
- (f) A provision requiring that arbitration or litigation be conducted outside this state. This shall not preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state.
- (g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause. This subdivision does not prevent a franchisor from
Source: Item 23 — RECEIPTS (FDD pages 39–114)
What This Means (2024 FDD)
According to the 2024 Crown Gold Exchange Franchise Disclosure Document, the Michigan Franchise Investment Law does apply to franchise agreements within the state of Michigan. The FDD explicitly states that certain unfair provisions, if present in the franchise documents, are void and unenforceable under Michigan law. This protection ensures that franchisees in Michigan are not subject to specific overreaching terms that might otherwise be included in the franchise agreement.
The disclosure highlights several specific provisions that Michigan law prohibits. These include restrictions on a franchisee's right to join a franchisee association, requirements for franchisees to waive rights or protections under the act, and clauses allowing termination without good cause or fair compensation. The law also addresses renewal terms, transfer restrictions, and requirements for out-of-state arbitration or litigation, ensuring these aspects of the franchise agreement are fair to the franchisee.
For a prospective Crown Gold Exchange franchisee in Michigan, this means that the franchise agreement cannot legally contain terms that violate the listed protections. If such provisions are included, they are considered void and unenforceable. Franchisees in Michigan have recourse through the Michigan Department of Attorney General, which can be contacted for questions regarding the notice and the application of the Michigan Franchise Investment Law.