2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 523H - FRANCHISES
523H.1 - DEFINITIONS.

        523H.1  DEFINITIONS.
         When used in this chapter, unless the context otherwise requires:
         1.  "Affiliate" means a person controlling, controlled by, or
      under common control with another person, every officer or director
      of such a person, and every person occupying a similar status or
      performing similar functions.
         2.  "Business day" means a day other than a Saturday, Sunday,
      or federal holiday.
         3. a.  "Franchise" means either of the following:
         (1)  An oral or written agreement, either express or implied,
      which provides all of the following:
         (a)  Grants the right to distribute goods or provide services
      under a marketing plan prescribed or suggested in substantial part by
      the franchisor.
         (b)  Requires payment of a franchise fee to a franchisor or its
      affiliate.
         (c)  Allows the franchise business to be substantially associated
      with a trademark, service mark, trade name, logotype, advertisement,
      or other commercial symbol of or designating the franchisor or its
      affiliate.
         (2)  A master franchise.
         b.  "Franchise" does not include any business that is
      operated under a lease or license on the premises of the lessor or
      licensor as long as such business is incidental to the business
      conducted by the lessor or licensor on such premises, including,
      without limitation, leased departments, licensed departments, and
      concessions and the leased or licensed department operates only under
      the trademark, trade name, service mark, or other commercial symbol
      designating the lessor or licensor.
         c.  "Franchise" also does not include any contract under which
      a petroleum retailer or petroleum distributor is authorized or
      permitted to occupy leased marketing premises, which premises are to
      be employed in connection with the sale, consignment, or distribution
      of motor fuel under a trademark which is owned or controlled by a
      refiner which is regulated by the federal Petroleum Marketing
      Practices Act, 15 U.S.C. § 2801 et seq.  The term "refiner" means
      any person engaged in the refining of crude oil to produce motor
      fuel, and includes any affiliate of such person.  "Franchise"
      also does not include a contract entered into by any person regulated
      under chapter 103A, division IV, or chapter 123, 322, 322A, 322C,
      322D, 322F, 522B, or 543B, or a contract establishing a franchise
      relationship with respect to the sale of construction equipment, lawn
      or garden equipment, or real estate.
         4.  "Franchise fee" means a direct or indirect payment to
      purchase or operate a franchise.  Franchise fee does not include any
      of the following:
         a.  Payment of a reasonable service charge to the issuer of a
      credit card by an establishment accepting the credit card.
         b.  Payment to a trading stamp company by a person issuing
      trading stamps in connection with a retail sale.
         c.  An agreement to purchase at a bona fide wholesale price a
      reasonable quantity of tangible goods for resale.
         d.  The purchase or agreement to purchase, at a fair market
      value, any fixtures, equipment, leasehold improvements, real
      property, supplies, or other materials reasonably necessary to enter
      into or continue a business.
         e.  Payments by a purchaser pursuant to a bona fide loan from
      a seller to the purchaser.
         f.  Payment of rent which reflects payment for the economic
      value of leased real or personal property.
         g.  The purchase or agreement to purchase promotional or
      demonstration supplies, materials, or equipment furnished at fair
      market value and not intended for resale.
         5.  "Franchisee" means a person to whom a franchise is
      granted.  Franchisee includes the following:
         a.  A subfranchisor with regard to its relationship with a
      franchisor.
         b.  A subfranchisee with regard to its relationship with a
      subfranchisor.
         6.  "Franchisor" means a person who grants a franchise or
      master franchise, or an affiliate of such a person.  Franchisor
      includes a subfranchisor with regard to its relationship with a
      franchisee, unless stated otherwise in this chapter.
         7.  "Marketing plan" means a plan or system concerning a
      material aspect of conducting business.  Indicia of a marketing plan
      include any of the following:
         a.  Price specification, special pricing systems, or discount
      plans.
         b.  Sales or display equipment or merchandising devices.
         c.  Sales techniques.
         d.  Promotional or advertising materials or cooperative
      advertising.
         e.  Training regarding the promotion, operation, or management
      of the business.
         f.  Operational, managerial, technical, or financial
      guidelines or assistance.
         8.  "Master franchise" means an agreement by which a person
      pays a franchisor for the right to sell or negotiate the sale of
      franchises.
         9.  "Offer" or "offer to sell" means every attempt to
      offer or to dispose of, or solicitation of an offer to buy, a
      franchise or interest in a franchise for value.
         10.  "Person" means a person as defined in section 4.1,
      subsection 20.
         11.  "Sale" or "sell" means every contract or agreement of
      sale of, contract to sell or disposition of, a franchise or interest
      in a franchise for value.
         12.  "Subfranchise" means an agreement by which a person pays
      a franchisor for the right to sell or negotiate the sale of
      franchises.
         13.  "Subfranchisee" means a person who is granted a franchise
      from a subfranchisor.
         14.  "Subfranchisor" means a person who is granted a master
      franchise.  

         92 Acts, ch 1134, § 1; 2001 Acts, ch 16, §13, 37; 2006 Acts, ch
      1090, §21, 26