                                 CODE OF VIRGINIA

DEFINITIONS; APPLICABILITY OF CHAPTER (§ 13.1-559)

A. As used in this chapter, unless the context otherwise requires:
			&#8220;Commission&#8221; means the State Corporation Commission.
			&#8220;Controlling person&#8221; means a natural person who is an officer,
director, or partner, or who occupies a similar status or performs a similar
function, of a franchisor organized as a corporation, partnership, or other
entity, or any person who possesses, directly or indirectly, the power to direct
or cause the direction of the management and policies of a franchisor, whether
through the ownership of voting securities, by contract, or otherwise.
			&#8220;Franchise&#8221; means a written contract or agreement between two or
more persons, by which:

   1. A franchisee is granted the right to engage in the business of offering,
   selling or distributing goods or services at retail under a marketing plan or
   system prescribed in substantial part by a franchisor;

   2. The operation of the franchisee&#8217;s business pursuant to such plan or
   system is substantially associated with the franchisor&#8217;s trademark,
   service mark, trade name, logotype, advertising or other commercial symbol
   designating the franchisor or its affiliate; and

   3. The franchisee is required to pay, directly or indirectly, a franchise fee
   of $500 or more.
   				&#8220;Franchise fee&#8221; means a fee or charge for the right to enter
   into or maintain a business under a franchise, including a payment or deposit
   for goods, services, rights, or training, but not including: (i) the payment
   of a bona fide wholesale price for starting and continuing inventory of goods
   for resale or (ii) the payment at fair market value for the purchase or lease
   of real property, fixtures, equipment, or supplies necessary to enter into or
   maintain the business.
   				&#8220;Franchisee&#8221; means a person to whom a franchise is granted or
   sold.
   				&#8220;Franchisor&#8221; means a person, including a subfranchisor, who
   grants or sells, or offers to grant or sell, a franchise.
   				&#8220;Offer&#8221; or &#8220;offer to sell&#8221; includes every attempt
   to offer to dispose of or grant, and every solicitation of an offer to buy, a
   franchise or an interest in a franchise for value.
   				&#8220;Place of business&#8221; means a building or portion thereof from
   which the goods or services authorized by the franchise are sold or offered
   for sale in person by the franchisee or employees or agents of the franchisee,
   or a truck or van used in the sale of such goods which is of a type designated
   by the franchisor and is equipped and marked in conformance with requirements
   of the franchisor.
   				&#8220;Preopening obligations&#8221; means the franchisor&#8217;s
   obligations to provide to the franchisee, prior to the opening of the
   franchisee&#8217;s business, real estate, improvements, equipment, inventory,
   training, or other items to be included in the offering.
   				&#8220;Sale&#8221; or &#8220;sell&#8221; includes every contract or
   agreement of sale or grant of, contract to sell, or disposition of a franchise
   or interest in a franchise for value.
   				&#8220;Subfranchisor&#8221; means a person who is authorized by a
   franchisor to grant a franchise within a particular geographic region.

B. This chapter shall apply only to a franchise the performance of which
contemplates or requires the franchisee to establish or maintain a place of
business within the Commonwealth of Virginia.
			A franchise does not include a contract or agreement by which a retailer of
goods or services is granted the right either (i) to utilize a marketing plan or
system to promote the sale or distribution of goods or services which are
incidental and ancillary to the principal business of the retailer (sales under
such a plan or system accounting for less than 20 percent of the
retailer&#8217;s gross sales being deemed incidental and ancillary); or (ii) to
sell goods or services within, or appurtenant to, a retail business
establishment as a department or division thereof provided such retailer is not
required to purchase such goods or services from the operator of such
establishment.

HISTORY: 1972, c. 561; 1978, c. 670; 1990, c. 420; 1991, c. 475; 2007, c. 668;
2009, c. 148.