2017 Wisconsin Statutes & Annotations
Chapter 553. Wisconsin franchise investment law.
553.51 Civil liability; sale in violation.

Universal Citation: WI Stat § 553.51 (2017)

553.51 Civil liability; sale in violation.

(1) Any person who sells a franchise in violation of s. 553.27 (4), if the violation was material in the franchisee's or subfranchisor's decision to purchase the franchise, shall be liable to the franchisee or subfranchisor, who may bring an action for rescission.

(2) Any person who violates s. 553.41 (3), (4) or (5) is liable for damages to any person who does not know or have cause to believe that the statement or representation was false or misleading and who, while relying upon the statement or representation, purchased a franchise, unless the defendant proves that the plaintiff knew the facts concerning the untruth or omission or that the defendant exercised reasonable care and did not know, or if the defendant had exercised reasonable care would not have known, of the untruth or omission.

(3) Every person who directly or indirectly controls a person liable under sub. (1) or (2), every partner in a firm so liable, every principal executive officer or director of a corporation so liable, every person occupying a similar status or performing similar functions and every employee of a person so liable who materially aids in the act or transaction constituting the violation is also liable jointly and severally with and to the same extent as such person, unless the person who would otherwise be liable hereunder had no knowledge of or reasonable grounds to believe in the existence of the facts by reason of which the liability is alleged to exist.

(4) No action may be maintained against any person to enforce any liability under this section unless it is brought before the expiration of 3 years after the act or transaction constituting the violation upon which the liability is based or 90 days after delivery to the franchisee of a written notice from or on behalf of that person that discloses any violation of this chapter and that is filed with the division, whichever first expires.

(5) The rights and remedies under this chapter are in addition to any other rights or remedies that may exist at law or in equity.

History: 1971 c. 241; 1981 c. 54 s. 32; 1983 a. 216; 1985 a. 332; 1995 a. 27, 364, 415; 1997 a. 35.

A franchisor who illegally sold a franchise had no right to set off the value of “benefits conferred" upon the franchisee against the franchisor's liability for its illegal actions. Hiltpold v. T-Shirts Plus, Inc. 98 Wis. 2d 711, 298 N.W.2d 217 (Ct. App. 1980).

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