North Dakota Century Code Title 51. Sales and Exchanges § 51-19-08. Prospectus requirements

1. The application for registration must be accompanied by a proposed prospectus which must contain the material information set forth in the application for registration, as specified by rule of the commissioner, and such additional disclosures as the commissioner may require.

2. Except as otherwise provided in this chapter, no part of the prospectus may be underscored, italicized, or printed in larger or bolder type than the rest of the prospectus unless the commissioner requires or permits it. The prospectus must recite in bold type of not less than ten-point type that registration does not constitute approval, recommendation, or endorsement by the commissioner.

3. The commissioner may by rule or order require that specified parts of the prospectus be emphasized by italics, boldfaced type, or other means, that earnings or sales projections or estimates be qualified by appropriate legend and by the filing with the commissioner of such other information or documents as are necessary or appropriate in the public interest or for the protection of prospective franchisees or subfranchisors and may require that such additional information or documents be furnished to prospective franchisees or subfranchisors as part of the prospectus.

4. The commissioner may by rule or order provide that any information required to be included in the prospectus need not be included in respect of any class of franchisees if the commissioner finds that such information is inappropriate to such class and that disclosure adequate for the protection of prospective franchisees or subfranchisors is otherwise included within the prospectus.

5. The commissioner may accept, in lieu of the prospectus meeting the requirements set forth in this chapter, a prospectus which complies with the requirements of any federal law or administrative rule or with the law of any other state requiring substantially the same disclosure of information as is required under this chapter.

6. It is unlawful to sell any franchise in this state which is subject to registration under this chapter without first providing the prospective franchisee at least seven days prior to the execution by the prospective franchisee of any binding franchise or other agreement or at least seven days prior to the receipt of any consideration, whichever occurs first, a copy of the prospectus, together with a copy of all proposed agreements relating to the sale of the franchise. The franchisee must be permitted to retain the prospectus prior and subsequent to the execution of any franchise or other agreement. The person offering or selling the franchise shall obtain a receipt signed by the prospective franchisee acknowledging that the prospective franchisee has received a copy of the prospectus as required under this subsection. The receipt must be kept in the possession of the person offering or selling the franchise, subject to inspection by the commissioner, for a period of three years from the date the receipt is taken.