Arizona Laws 44-1276.01. Business opportunities; disclosure to consumer
A. A seller who offers or sells a business opportunity and who is required to file a registration statement pursuant to section 44-1272 shall not solicit a consumer from a location in this state or a consumer located in this state unless the seller provides a written disclosure document to the consumer. The seller shall deliver the written disclosure document to the consumer at least five business days before the earlier of the consumer’s execution of a contract imposing a binding legal obligation on the consumer or the payment of any monies, receipt of anything of value or authorization to charge a credit or debit card.
Terms Used In Arizona Laws 44-1276.01
- Consumer: means a person who is solicited by a seller or solicitor. See Arizona Laws 44-1271
- Contract: A legal written agreement that becomes binding when signed.
- Goods: means any merchandise, equipment, products, supplies or materials. See Arizona Laws 44-1271
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- 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
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means :
(a) A natural person or the person's legal representative. See Arizona Laws 44-1271
- Principal: means an owner or an officer of a corporation or limited liability company, a general partner of a partnership, a sole proprietor of a sole proprietorship, a partner of a limited liability partnership, a trustee of a trust and any other individual who controls, manages or supervises a telephone sales operation. See Arizona Laws 44-1271
- sell: means a sale or any other disposition of a security or interest in a security for value and includes a contract to make such sale or disposition. See Arizona Laws 44-1801
- Seller: means a person who, directly or through a solicitor, does any of the following:
(a) Initiates telephone calls to provide or arrange to provide merchandise to consumers in exchange for payment. See Arizona Laws 44-1271
B. The disclosure document shall have a cover sheet that contains only the following information:
1. A title and statement that are printed in at least ten point bold type and that shall appear as follows:
Disclosures Required by Arizona Law
The information contained in this disclosure has not been verified by the state. If you have any questions about your purchase of this business opportunity, seek professional advice before you sign a contract or make any payment. You are to be provided five business days to review this document before signing a contract or making any payment to the seller or the seller’s representative.
2. The seller’s name and principal business address and the date of the disclosure document.
C. The disclosure document shall contain at least the following information, which shall be presented in a single document in the following order:
1. A factual description of the business opportunity that the seller is offering to sell to the consumer, including a full and detailed description of the actual goods or services that the seller undertakes to supply to or perform for the consumer and the actual services that the consumer undertakes to perform, including compliance with procedures established by the seller regarding the operation of the business.
2. A statement of the exact sum of the total monies that the seller requires the consumer to pay to a specifically named person or any other person known to the seller who receives any consideration incident to the transaction or which the seller or any person affiliated with the seller collects in whole or in part on behalf of any party in order to obtain or commence the business opportunity operation, including initial fees, deposits, down payments, prepaid rent, equipment and inventory purchases or marketing expenses. The seller shall disclose if all or part of these fees or deposits are returnable under certain conditions or if all or part of the fees or deposits are not returnable.
3. A statement describing any recurring monies that the consumer is or may be asked to pay to any person in connection with carrying on the business opportunity, including advertising, training, royalty, lease or rental fees or equipment or inventory purchases.
4. A statement advising consumers as follows, "as required by Arizona law, the seller has filed its annual registration statement with the Arizona secretary of state."
5. A statement advising consumers of one of the following:
(a) "As required by Arizona law, the seller has secured a bond issued by _________________ (name and address of surety company), a surety company authorized to do business in Arizona."
(b) "As required by Arizona law, the seller has deposited with the Arizona state treasurer a cash deposit in the amount of one hundred thousand dollars."
6. A statement disclosing the name of each person, including the seller and its affiliates, with whom the seller directly or indirectly requires or advises the consumer to do business.
7. A statement describing any goods, services, real estate, inventories, signs or fixtures relating to the establishment or the operation of the business opportunity that the seller directly or indirectly requires the consumer to purchase, lease or rent. If the purchase, lease or rental is made from specific persons including the seller, a list of the names and addresses of each person shall appear on the disclosure document or in a separate document that is delivered to the consumer with the disclosure document if the existence of the separate document is disclosed in the disclosure document.
8. A statement of all material terms and conditions of any financing arrangement the seller or any person affiliated with the seller offers, directly or indirectly, to the consumer and a description of the terms of payment to the seller from any person offering financing to a prospective consumer and from any person arranging for financing for a prospective consumer.
9. A statement that the seller must provide a written notice of cancellation pursuant to section 44-1276.