Sec. 13. Definitions
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For purposes of this Act, the following definitions apply: The term affiliate has the meaning given the term affiliated person in section 436.1(b) of title 16 of the Code of Federal Regulations as in effect on July 1, 2007. The term disclosure document means either the disclosure statement required by the Federal Trade Commission in Trade Regulation Rule 436 (16 C.F.R. Sec. 436) as amended from time to time, or any offering format allowed or required by State or local law. The term franchise has the meaning given such term in section 436.1(h) of title 16 of the Code of Federal Regulations as in effect on July 1, 2007, but does not include any contract otherwise regulated by the Federal Petroleum Marketing Practices Act ( 15 U.S.C. 2801 et seq. ) except as to franchise relationships that do not involve the sale of petroleum products.
The term franchise seller has the meaning given such term in section 436.1(j) of title 16 of the Code of Federal Regulations as in effect on July 1, 2007. The term franchisee has the meaning given such term in section 436.1(i) of title 16 of the Code of Federal Regulations as in effect on July 1, 2007. The term franchisor has the meaning given such term in section 436.1(k) of title 16 of the Code of Federal Regulations as in effect on July 1, 2007. The terms material and material fact include— any fact, circumstance, or set of conditions which a reasonable franchisee or a reasonable prospective franchisee would consider important in making a significant decision relating to entering into, remaining in, or abandoning a franchise relationship; and any fact, circumstance, or set of conditions which has, or may have, any significant financial impact on a franchisor, franchisee, or a prospective franchisee.
The term offer or offering means any effort to offer or to dispose of, or solicitation of an offer to buy, a franchise or interest in a franchise for value. The term outlet means a point of sale, temporary or permanent, fixed or mobile, from which goods or services are offered for sale. The term person means either an individual or any other legal or commercial entity. The term State means a State, the District of Columbia, and any territory or possession of the United States.
The term subfranchise means a contract or an agreement by which a person pays a franchisor for the right to sell, negotiate the sale, or provide service franchises. The term subfranchisor means a person who is granted a subfranchise. The term trade secret means information, including a formula, pattern, compilation, program, device, method, technique, or process, that— derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
The terms nonrenewal and nonrenew mean that the franchisor fails or refuses to extend the franchisor-franchisee relationship at the end of the existing term of the franchise agreement, irrespective of whether the franchise agreement contains any contractual right to obtain a renewal term. Allowing a franchise agreement with no renewal term to expire shall be considered to be a nonrenewal for purposes of this Act.
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- 16 CFR 436
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