1.1                          A bill for an act 
  1.2             relating to commerce; regulating franchises; providing 
  1.3             franchisees with the power to suspend performance 
  1.4             under and rescind nonexempt franchises which are not 
  1.5             covered by effective registration statements; amending 
  1.6             Minnesota Statutes 1996, sections 80C.02; and 80C.12, 
  1.7             by adding a subdivision. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1996, section 80C.02, is 
  1.10  amended to read: 
  1.11     80C.02 [REGISTRATION ~~REQUIREMENT~~.] 
  1.12     Subdivision 1.  [REQUIREMENT.] No person may offer or sell 
  1.13  any franchise in this state unless there is an effective 
  1.14  registration statement on file in accordance with the provisions 
  1.15  of sections 80C.01 to 80C.22 or unless the franchise or 
  1.16  transaction is exempted under section 80C.03.  
  1.17     Subd. 2.  [CANCELLATION OF NONREGISTERED FRANCHISE.] By 
  1.18  mailing a written notice of cancellation to the franchisor's 
  1.19  last known address, a franchisee may immediately cancel a 
  1.20  franchise for which no effective registration statement has been 
  1.21  on file according to sections 80C.01 to 80C.22 at any time 
  1.22  during the 30 days immediately preceding the notice.  A 
  1.23  franchise may not be canceled according to this subdivision if 
  1.24  it is exempt from registration requirements under section 80C.03.
  1.25  A franchise may not be canceled according to this subdivision at 
  1.26  any time while the franchisor is pursuing an administrative or 
  2.1   judicial appeal from an order of the commissioner under section 
  2.2   80C.12 denying, suspending, or revoking a registration statement 
  2.3   as to the franchise or denying, suspending, or revoking an 
  2.4   exemption from registration.  If a franchisee cancels a 
  2.5   franchise within 30 days after an order under section 80C.12 has 
  2.6   become final as to the franchise registration statement, the 
  2.7   cancellation is effective retroactively to the date the 
  2.8   commissioner issued the order. 
  2.9      Sec. 2.  Minnesota Statutes 1996, section 80C.12, is 
  2.10  amended by adding a subdivision to read: 
  2.11     Subd. 5.  [EFFECT ON FRANCHISE OBLIGATIONS.] Upon the entry 
  2.12  of an order under this section denying, suspending, or revoking 
  2.13  a registration, amendment, or exemption, a franchisee may for as 
  2.14  long as that order is in effect suspend performance of the 
  2.15  franchisee's obligations under a franchise covered by the 
  2.16  affected registration or exemption, except for an obligation to 
  2.17  pay the agreed upon price for goods received and retained more 
  2.18  than 30 days. 
  2.19     Sec. 3.  [EFFECTIVE DATE.] 
  2.20     Sections 1 and 2 are effective the day following final 
  2.21  enactment and apply to franchises in effect on or after that 
  2.22  date.