Ark. Code Ann. » Title 4 Chapter 72
Arkansas Code Annotated

Ark. Code Ann. § 4-72-207 (2026)

Misleading and fraudulent schemes — Penalty — Prosecutions

✓ current as of May 2026
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  1. It shall be unlawful for any person, directly or indirectly, in connection with the offer, sale, purchase, transfer, or assignment of any franchise in this state to knowingly:
    1. Employ any device, scheme, or artifice to defraud;
    2. Make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; or
    3. Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.
  2. Any violation of this section shall be a Class B felony.
  3. Prosecutions for offenses committed in violation of this section must be commenced within five (5) years from the date of the crime or within five (5) years from the date of the commission of the last overt act in furtherance of the scheme to defraud.

History. Acts 1977, No. 355, § 8; A.S.A. 1947, § 70-814.

Cross References. Class B felony, penalty, §§ 5-4-201, 5-4-401.

Case Notes

False or Misleading Statements.

Where “questionnaire” given to prospective distributor by agent of franchisor stated that an exclusive territory would be violative of the Sherman Anti-Trust Act, that there might be other distributors selected or currently established in prospect's area and prospective distributor would be expected to develop sales beyond his immediate area, it could not be held that the agent had made untrue statements or misrepresentations under the Securities Act or the Franchise Practice Act, in order to induce prospect into entering into distributorship agreement. Kern v. Sells Enters., Inc., 271 Ark. 904, 612 S.W.2d 94 (1981).

Fraud.

Projections related to franchise profits are not representations of pre-existing material fact, but are representations related to future events, and absent actual knowledge of falsity, do not constitute fraud. Morrison v. Back Yard Burgers, Inc., 91 F.3d 1184 (8th Cir. 1996).

Summary judgment was inappropriate on claims brought under the Arkansas Franchise Practices Act, §§ 4-72-204(a)(1), 4-72-206(6), and 4-72-207(a)(3); significant issues remained as to the damages available to the franchisee and to the defenses the franchisor might be able to raise. Capital Equip., Inc. v. CNH America, LLC, 471 F. Supp. 2d 951 (E.D. Ark. 2006).

Cited: Coast-to-Coast Stores, Inc. v. Womack-Bowers, Inc., 818 F.2d 1398 (8th Cir. 1987); Arkcom Digital Corp. v. Xerox Corp., 289 F.3d 536 (8th Cir. 2002).

Notes of Decisions
Cited in 6 cases, 2002–2010 · leading case: Miller Brewing Co. v. Ed Roleson, Jr., Inc., 223 S.W.3d 806 (Ark. 2006).
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Miller Brewing Co. v. Ed Roleson, Jr., Inc., 223 S.W.3d 806 (Ark. 2006). · cites it 4× “While Ark.Code Ann. § 4-72-207 (Repl.2001) contains a five-year statute of limitations for criminal prosecutions under the Arkansas Franchise Practices Act, the Act does not contain its own statute of limitations for civil actions.”
Se. Distrib. Co. v. Miller Brewing Co., 237 S.W.3d 63 (Ark. 2006). · cites it 2× “Franchise Act Southeastern also claims that Miller violated the fraud provision in the Franchise Act found in Ark. Code Ann. § 4-72-207 (Repl. 2001). It provides in pertinent part as follows: (a) It shall be unlawful for any person, directly or indirectly, in connection with the…”
Gunn v. Farmers Ins. Exch., 372 S.W.3d 346 (Ark. 2010). · cites it 2× “See Ark.Code Ann. § 4-72-207(l)(A) (Repl.2001).”
Arkcom Digit. Corp., Plaintiff-Appellant/cross v. Xerox Corp., Defendant-Appellee/cross, 289 F.3d 536 (8th Cir. 2002). “See Ark.Code Ann. §§ 4-72-207, -208(a), (b). Where the parties have agreed to arbitrate a dispute, that agreement is enforceable “save upon such grounds as exist at law or in equity for the revocation of any contract.”
Capital Equip., Inc. v. Cnh Am., LLC, 471 F. Supp. 2d 951 (E.D. Ark. 2006). · cites it 6× “” Ark.Code Ann. § 4-72-207(a)(2). The same provision of the statute also makes it unlawful to “engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person.”
Arkcom Digit. Corp. v. Xerox Corp. (8th Cir. 2002). “See Ark. Code Ann. §§ 4-72-207 , -208(a), (b).”
— Ark. Code Ann. § 4-72-207(a)(2) — 1 case
Capital Equip., Inc. v. Cnh Am., LLC, 471 F. Supp. 2d 951 (E.D. Ark. 2006). “” Ark.Code Ann. § 4-72-207(a)(2). The same provision of the statute also makes it unlawful to “engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person.”
— Ark. Code Ann. § 4-72-207(a)(3) — 1 case
Capital Equip., Inc. v. Cnh Am., LLC, 471 F. Supp. 2d 951 (E.D. Ark. 2006). “” Ark.Code Ann. § 4-72-207(a)(2). The same provision of the statute also makes it unlawful to “engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person.”
— Ark. Code Ann. § 4-72-207(l)(A) — 1 case
Gunn v. Farmers Ins. Exch., 372 S.W.3d 346 (Ark. 2010). “See Ark.Code Ann. § 4-72-207(l)(A) (Repl.2001).”
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