There are no Franchise Laws for Louisiana.

Business Opportunity Laws

Effective September 9, 1988.

Section 1821. As used in this Chapter, the following terms and phrases have the meaning ascribed to them unless the context requires otherwise:

(1) "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. This provision shall not apply to the sale or lease of a sales plan or marketing program made in conjunction with the licensing of a registered trademark or service mark.

Business opportunity does not include the sale of an ongoing business when the owner of that business sells and intends to sell only that one business and does not include the sale, not for profit, of sales demonstration equipment, materials, or samples for a total price of five hundred dollars or less.

(2) "Initial required consideration" includes consideration required by express condition or practical necessity, or for which the buyer or lessee becomes obligated before the commencement of the business, or during the following one hundred eighty days.

(3) "Seller" means a person or entity which sells or leases, or offers to sell or to lease a business opportunity.

(4) "Agent" means a person who solicits prospective purchasers or negotiates on behalf of a seller.

(5) "Department" means the Department of Justice.

Sec. 1822. (A) A business opportunity seller shall maintain a surety bond issued by a surety company authorized to do business in this state in the amount of fifty thousand dollars. The bond shall be in favor of the state for the use, benefit, and indemnity of any person who suffers any damage or loss as a result of the seller's dishonesty, unfair or deceptive practice, breach of the contract for the business opportunity sale or any duty arising therefrom, or violation of law.

(B) A business opportunity agent, whether an independent contractor, a broker, or an employee of the seller, shall maintain a surety bond issued by a surety company authorized to do business in this state in the amount of twenty-five thousand dollars. The bond shall be in favor of the state for the use, benefit, and indemnity of any person who suffers any damage or loss as a result of the agent's dishonesty, unfair or deceptive practice, breach of a duty, or violation of law.

(C) The department may at any time require a seller or agent to file a new or additional bond in the amount of the original bond whenever he deems the security of a bond required by this Section to be unsatisfactory or finds that a bond has become insufficient to satisfy all claims accrued or contingent against the principal.

(D) The state or any person claiming against the bond may maintain an action for damages or other relief against the principal or the surety, or both. The liability of the surety for all breaches of the conditions of the bond provided herein shall in no event exceed the amount of the bond.

(E) The seller and agent shall file the bonds required of them with the department before doing any business in this state, including advertising or soliciting. New or additional bonds shall be filed before continuing business in this state.

(F) Whoever violates the provisions of Subsections A, B, or E of this Section shall be guilty of a misdemeanor, punishable by a fine of five hundred dollars and by imprisonment for not more than six months.

(G) The bonding requirements of this Section shall apply only to business opportunities as defined in R.S. 51:1821(1)(a), (b), and (c) [*].

(H) The term of a bond required by this Section shall be continuous. The surety on said bond may terminate the bond upon giving a sixty-day written notice to the assistant secretary and the principal; however, the liability of the surety for the acts of the principal shall continue during the sixty-day period. The notice shall not release the surety from liability which accrues before the termination becomes final, but which is discovered after that date.

Sec. 1823. 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.

Sec. 1824. A violation of any of the provisions of this Chapter shall constitute an unfair practice under the provisions of R.S. 51:1401 through R.S. 51:1418.