407.405. Pyramid sales schemes prohibited — cancellation of franchise without notice prohibited, exceptions. — No person shall, directly or through the use of agents or intermediaries, in connection with the sale or distribution of goods, service, or other property, sell, offer or attempt to sell a participation or the right to participate in a pyramid sales scheme. No person who has granted a franchise to another person shall cancel or otherwise terminate any such franchise agreement without notifying such person of the cancellation, termination or failure to renew in writing at least ninety days in advance of the cancellation, termination or failure to renew, except that when criminal misconduct, fraud, abandonment, bankruptcy or insolvency of the franchisee, or the giving of a no account or insufficient funds check is the basis or grounds for cancellation or termination, the ninety days' notice shall not be required.
Notes of Decisions
Sun Aviation, Inc. v. L-3 Commc'ns Avionics Sys., Inc., 533 S.W.3d 720 (Mo. 2017).
· cites it 17× “Sun filed an action against L-3 raising the following claims: Count I, violation of § 407.405 (the “Franchise Act”) by failing to provide timely, written notice of termination; Count II, violation of § 407.”
ABA Distributors, Inc. v. Adolph Coors Co., 542 F. Supp. 1272 (W.D. Mo. 1982).
· cites it 23× “§ 407.405 is applicable to a beer distributorship and, if so, whether the requirement for a 90-day termination notice actually invalidates a termination notice in disregard thereof, or merely entitles the terminated party to recover, as damages, the loss incurred by the failure…”
Armstrong Bus. Servs., Inc. v. H & R Block, 96 S.W.3d 867 (Mo. Ct. App. 2002).
· cites it 6× “Missouri policy, however, protects franchisees at termination of franchise relationships. Both Missouri statutory and common law reflect this policy.”
High Life Sales Co. v. Brown-Forman Corp., 823 S.W.2d 493 (Mo. 1992).
· cites it 6× “The Distributorship Agreement provided that any termination must be in accordance with §§ 407.405 and 407.413. Section 407.-413.”
State Ex Rel. Ashcroft v. Wahl, 600 S.W.2d 175 (Mo. Ct. App. 1980).
· cites it 9× “The dispositive question is whether respondents’ activities contravene the provisions of § 407.405, called generally “Pyramid Sales Schemes.”
C & J DELIVERY, INC. v. Emery Air Freight Corp., 647 F. Supp. 867 (E.D. Mo. 1986).
· cites it 13× “400(1), and that Emery violated Mo.Rev.Stat. § 407.405 by terminating the "franchise" without giving the statutorily mandated 90 days' notice.”
Acetylene Gas Co. v. Oliver, 939 S.W.2d 404 (Mo. Ct. App. 1996).
· cites it 3× “In all three points, Oliver argues AGC breached the contracts and violated the ninety-day notice of termination for franchises, as provided in § 407.405 RSMo 1994, by: (1) contacting the resale customers; (2) cutting its prices to the resale customers by about one-half; (3)…”
State Ex Rel. Nixon v. Consum. Auto. Resources, Inc., 882 S.W.2d 717 (Mo. Ct. App. 1994).
· cites it 7× “400 RSMo 1986 and § 407.405 RSMo 1986. 1 Defendants claim the trial court erred in granting summary judgment against them, in ordering that funds sequestered vest in the State as an equitable fine or forfeiture, and in imposing civil penalties pursuant to § 407.”
Brown-Forman Distillers Corp. v. McHenry, 566 S.W.2d 194 (Mo. 1978).
· cites it 5× “1975) made it a felony to violate § 2 of the bill (§ 407.405, RSMo Supp. 1975) pertaining to pyramid sales schemes and cancellation of franchise agreements.”
Ridings v. Thoele, Inc., 739 S.W.2d 547 (Mo. 1987).
· cites it 6× “If a franchisor fails to provide timely notice of termination to a franchisee under section 407.405, RSMo 1978 1 , is the franchisee entitled to recover punitive damages in an action brought pursuant to section 407.”
Emerick v. Mut. Benefit Life Ins. Co., 756 S.W.2d 513 (Mo. 1988).
· cites it 2× “400(1), RSMo 1986, and that cross-respondent violated § 407.405, RSMo 1986, by failing to provide cross-appellant 90 days’ notice pri- or to termination of the agency.”
Chmieleski v. City Prods. Corp., 660 S.W.2d 275 (Mo. Ct. App. 1983).
· cites it 2× “As regards franchises, our statutes are limited and provided in § 407.405, RSMo 1978: “407.405. Pyramid sales schemes prohibited-cancellation of franchise without notice prohibited, exceptions No person shall, directly or through the use of agents or intermediaries, in…”
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