Virginia Code 13.1-559: Definitions; applicability of chapter
A. As used in this chapter, unless the context otherwise requires:
Terms Used In Virginia Code 13.1-559
- Commission: means the State Corporation Commission. See Virginia Code 13.1-559
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Franchise: means a written contract or agreement between two or more persons, by which:
1. See Virginia Code 13.1-559
- Franchisee: means a person to whom a franchise is granted or sold. See Virginia Code 13.1-559
- Franchisor: means a person, including a subfranchisor, who grants or sells, or offers to grant or sell, a franchise. See Virginia Code 13.1-559
- Includes: means includes, but not limited to. See Virginia Code 1-218
- 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
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: includes any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or any other legal or commercial entity and any successor, representative, agent, agency, or instrumentality thereof. See Virginia Code 1-230
- Place of business: means a building or portion thereof from which the goods or services authorized by the franchise are sold or offered for sale in person by the franchisee or employees or agents of the franchisee, or a truck or van used in the sale of such goods which is of a type designated by the franchisor and is equipped and marked in conformance with requirements of the franchisor. See Virginia Code 13.1-559
- real estate: includes lands, tenements and hereditaments, and all rights and appurtenances thereto and interests therein, other than a chattel interest. See Virginia Code 1-219
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- sell: includes every contract or agreement of sale or grant of, contract to sell, or disposition of a franchise or interest in a franchise for value. See Virginia Code 13.1-559
- State: when applied to a part of the United States, includes any of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, and the United States Virgin Islands. See Virginia Code 1-245
- Subfranchisor: means a person who is authorized by a franchisor to grant a franchise within a particular geographic region. See Virginia Code 13.1-559
“Commission” means the State Corporation Commission.
“Controlling person” means a natural person who is an officer, director, or partner, or who occupies a similar status or performs a similar function, of a franchisor organized as a corporation, partnership, or other entity, or any person who possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of a franchisor, whether through the ownership of voting securities, by contract, or otherwise.
“Franchise” means a written contract or agreement between two or more persons, by which:
1. A franchisee is granted the right to engage in the business of offering, selling or distributing goods or services at retail under a marketing plan or system prescribed in substantial part by a franchisor;
2. The operation of the franchisee’s business pursuant to such plan or system is substantially associated with the franchisor’s trademark, service mark, trade name, logotype, advertising or other commercial symbol designating the franchisor or its affiliate; and
3. The franchisee is required to pay, directly or indirectly, a franchise fee of $500 or more.
“Franchise fee” means a fee or charge for the right to enter into or maintain a business under a franchise, including a payment or deposit for goods, services, rights, or training, but not including: (i) the payment of a bona fide wholesale price for starting and continuing inventory of goods for resale or (ii) the payment at fair market value for the purchase or lease of real property, fixtures, equipment, or supplies necessary to enter into or maintain the business.
“Franchisee” means a person to whom a franchise is granted or sold.
“Franchisor” means a person, including a subfranchisor, who grants or sells, or offers to grant or sell, a franchise.
“Offer” or “offer to sell” includes every attempt to offer to dispose of or grant, and every solicitation of an offer to buy, a franchise or an interest in a franchise for value.
“Place of business” means a building or portion thereof from which the goods or services authorized by the franchise are sold or offered for sale in person by the franchisee or employees or agents of the franchisee, or a truck or van used in the sale of such goods which is of a type designated by the franchisor and is equipped and marked in conformance with requirements of the franchisor.
“Preopening obligations” means the franchisor’s obligations to provide to the franchisee, prior to the opening of the franchisee’s business, real estate, improvements, equipment, inventory, training, or other items to be included in the offering.
“Sale” or “sell” includes every contract or agreement of sale or grant of, contract to sell, or disposition of a franchise or interest in a franchise for value.
“Subfranchisor” means a person who is authorized by a franchisor to grant a franchise within a particular geographic region.
B. This chapter shall apply only to a franchise the performance of which contemplates or requires the franchisee to establish or maintain a place of business within the Commonwealth of Virginia.
A franchise does not include a contract or agreement by which a retailer of goods or services is granted the right either (i) to utilize a marketing plan or system to promote the sale or distribution of goods or services which are incidental and ancillary to the principal business of the retailer (sales under such a plan or system accounting for less than 20 percent of the retailer’s gross sales being deemed incidental and ancillary); or (ii) to sell goods or services within, or appurtenant to, a retail business establishment as a department or division thereof provided such retailer is not required to purchase such goods or services from the operator of such establishment.
1972, c. 561; 1978, c. 670; 1990, c. 420; 1991, c. 475; 2007, c. 668; 2009, c. 148.