87-402.

Terms, defined.

For purposes of the Franchise Practices Act, unless the context otherwise requires:

(1) Franchise means (a) a written arrangement for a definite or indefinite period, in which a person grants to another person for a franchise fee a license to use a trade name, trademark, service mark, or related characteristics and in which there is a community of interest in the marketing of goods or services at wholesale or retail or by lease, agreement, or otherwise and (b) any arrangement, agreement, or contract, either expressed or implied, for the sale, distribution, or marketing of nonalcoholic beverages at wholesale, retail, or otherwise. Franchise shall not include any arrangement, agreement, or contract, either expressed or implied, for the sale, distribution, or marketing of petroleum products at wholesale, retail, or otherwise;

(2) Person means every natural person, firm, partnership, limited liability company, association, or corporation;

(3) Franchisor means a person who grants a franchise to another person;

(4) Franchisee means a person to whom a franchise is offered or granted;

(5) Franchise fee includes any payment made by the franchisee to the franchisor other than a payment for the purchase of goods or services, for a surety bond, for a surety deposit, or for security for payment of debts due;

(6) Sale, transfer, or assignment means any disposition of a franchise or any interest therein, with or without consideration, which shall include, but not be limited to, bequest, inheritance, gift, exchange, lease, or license;

(7) Place of business means a fixed geographical location at which the franchisee displays for sale and sells the franchisor's goods or offers for sale and sells the franchisor's services. Place of business shall not mean an office, a warehouse, a place of storage, a residence, or a vehicle;

(8) Good cause for terminating, canceling, or failure to renew a franchise is limited to failure by the franchisee to substantially comply with the requirements imposed upon him or her by the franchise; and

(9) Noncompete agreement means any agreement between a franchisor and a franchisee, a guarantor, or any person with a direct or indirect beneficial interest in the franchise that restricts the business activities in which such persons may engage during or after the term of the franchise. Noncompete agreement includes any stand-alone agreement or any covenant not to compete provision within a franchise agreement or ancillary agreement.