Mich. Admin. Code R. 445.304 - Release of escrowed funds
Rule 304.
(1) The
administrator shall authorize the depository to release to the franchisor those
amounts of the escrowed funds applicable to a specified franchisee or
subfranchisor upon a showing satisfactory to the administrator that the
franchisor has fulfilled its obligations under the franchise agreement to
establish the franchise, or that the escrow is not required for the protection
of the franchisee.
(2) An
application for an order of the administrator authorizing the release of
escrowed funds to the franchisor shall be verified and shall contain:
(a) A statement of the franchisor that
required proceeds from the sale of franchises have been placed with the
depository in accordance with the terms and conditions of the escrow
agreement.
(b) A franchisee's
verified statement of completion of franchisor's obligations for release of
funds from escrow.
(c) A statement
of the depository signed by an appropriate officer setting forth the aggregate
amount of escrowed funds placed with the depository when required by the
administrator.
(d) The names of
each franchisee or subfranchisor and the amount held in escrow for the account
of the franchisee or subfranchisor.
(e) A showing that the franchisor, with
respect to a franchise, the funds for which are sought to be released, has
completely performed obligations, cited by reference to the franchise agreement
and its provisions, to provide real estate, improvements, equipment, inventory,
training, or other items.
(f) Other
information the administrator may reasonably require.
(3) If the administrator finds that any
conditions of this agreement have not been satisfied or that any provisions of
the Michigan franchise investment law or rules have not been complied with, or
the registration of the franchises has been revoked, then the administrator may
withhold such authorization for release of funds by the escrow agent to the
franchisor and may direct the full return of funds by the escrow agent to the
franchisees.
Notes
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