What All Franchise Lawyers Should Know About the Recent Changes to Ohio’s Business Opportunity Law

What All Franchise Lawyers Should Know About the Recent Changes to Ohio’s Business Opportunity Law

Vol. 16 No. 1

By

Taft Stettinius & Hollister LLP*

*The author wishes to thank Cincinnati lawyer Christopher A. Kuhnhein who had substantial involvement in the preparation of this article. The author chaired and Mr. Kuhnhein was a member of the Ohio State Bar Association committee that drafted most of the 2012 amendments described herein.

On June 26, 2012, Governor Kasich signed Substitute Senate Bill 196 into law. This Act amends several sections of Ohio’s Business Opportunity Plan Law, Revised Code Sections 1334.01 et seq. (the “OBOPL”). Originally enacted in 1979, the OBOPL is, like many other state business opportunity laws, not limited to regulating the sale of typical business opportunity plans. Rather, the courts consistently have interpreted the OBOPL to apply to the sale of franchises in Ohio. Peltier v. Spaghetti Tree, Inc., 6 Ohio St. 3d 194, 451 N.E.2d 1219 (1983); 6100 Cleveland, Inc. v. Staff Builders, Int’l, Inc., 127 F. Supp. 2d 877 (N.D. Oh. 1999). And, unlike the FTC Franchise Rule that regulates the sale of franchises, 16 C.F.R. § 436 (2007) (the “FTC Rule”), the OBOPL creates a private right of action. Franchisees may sue for treble damages, rescission, attorney fees, and other relief where the franchisor violates the statute.

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