STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) AGRICULTURE AND CONSUMER SERVICES, )

)

Petitioner, )

)

vs. ) CASE NO. 94-4357

)

TERRY GRANHAN AND MIKE BRAY ) d/b/a STAR VISION DIRECT CABLE, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

The final hearing in the above-styled matter was heard pursuant to notice by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings, on November 9, 1994 in Tallahassee, Florida.

APPEARANCES

For Petitioner: Jay S. Levenstein, Senior Attorney

Department of Agriculture and Consumer Services

Room 515, Mayo Building Tallahassee, Florida 32399-0800

For Respondents: Did not appear

STATEMENT OF ISSUES

Did the Respondents offer to sell a business opportunity without filing a disclosure statement with the Department and without providing prospective purchasers a disclosure statement at least three working days prior to the receipt of any consideration for the signing of a business opportunity contract contrary to Section 559.80, Florida Statutes?

PRELIMINARY STATEMENT

Petitioner, Department of Agriculture and Consumer Services (hereafter referred to as Department) filed an Administrative Complaint against Respondents, Terry Granhan and Mike Bray d/b/a Star Vision Direct Cable (hereafter referred to as Star Vision) alleging that Star Vision failed to comply with Section 559, Part VII, Florida Statutes, Sale of Business Opportunities Act, (hereafter referred to as the "Act") by offering to sell a business opportunity without filing a disclosure statement with the Department; and failing to provide prospective purchasers with a disclosure statement at least 3 working days prior to the receipt of any consideration or the signing of a business opportunity contract.

At the hearing, testimony was taken and exhibits were entered into the Record and the parties were permitted to submit Proposed Recommended Orders. The Petitioner filed a brief containing proposed findings which were read and adopted.

FINDINGS OF FACT

1. On March 5, 1994, Star Vision was in attendance at a trade show in Jacksonville, Florida. (Petitioner's Exhibits 3,5)

   
   

2. Upon investigating Star Vision's activities at the show, the Department's representatives, Bob James and Bill Bassett, found Star Vision to be offering for sale a business opportunity as defined by Chapter 559, Part VIII, Florida Statutes. (Petitioner's Exhibits 3,5)

   
   

3. Star Vision offered to sell a business opportunity representing that one could become a "licensee" upon paying $600. (Petitioner's Exhibits 5)

   
   

4. Star Vision had not file a copy of the required disclosure statement with the Department prior to making the offering above. (Petitioner's Exhibits 2,3)

   
   

5. Granhan and Bray were given a letter notifying them of the filing requirements together with a business opportunity registration package. (Petitioner's Exhibits 2,3)

   
   

6. On March 12,1994, Star Vision attended another trade show in Fort Lauderdale, Florida. (Petitioner's Exhibits 4)

   
   

7. Upon investigating Star Vision's activities at the show, the Department's representative, James R. Kelly, found Star Vision to be offering for sale a business opportunity. (Petitioner's Exhibits 4)

   
   

8. Star Vision represented the following while offering to sell a business opportunity:

   
   

   1. The regular price of the opportunity was $1,495 but they were running a special

      of $495 for anyone signing up at the show; and

   2. Purchasers would receive training tapes and other training that teaches how to market and sell the product. (Petitioner's Exhibits 4)

      
      

9. The Department received a consumer complaint against STAR VISION from Mr. Alan Drake.

   
   

10. Upon purchasing a business opportunity from Star Vision, Mr. Drake was provided with audio and video tapes which instruct purchasers how to sell and market the product. (Petitioner's Exhibits 1)

    
    

11. Upon selling him a business opportunity, Star Vision did not provide Mr. Drake with a disclosure statement, and has never registered with the Department.

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this cause pursuant to Section 120.57, Florida Statutes, (1993), and Chapter 60Q-2, Florida Administrative Code.

    
    

13. The Department of Agriculture and Consumer Services is a state agency created pursuant to Section 20.16, Florida Statutes, and is responsible for administering and enforcing the provisions of Section 559.80 et. seq., Florida Statutes, regulating the sale of business opportunities.

14. Section 559.80l(1)(a), Florida Statutes, provides: (1)(a) "Business opportunity" means the sale

    or lease of any products, equipment, supplies,

    or services which are sold or leased to a purchaser to enable the purchaser to start a business for which the purchaser is required to pay an initial fee or sum of money which exceeds $500 to the seller, and in which the seller represents: That the seller or person or entity affiliated with or referred by the seller will provide locations or assist the purchaser in finding locations for the use or operation of vending machines, racks, display cases, or other similar devices or currency-

    operated amusement machines or devises on premises neither owned nor leased by the purchaser or seller;

    1. That the seller will purchase any or all products made, produced, fabricated, grown, bred, or modified by the purchaser using in whole or

       in part the supplies, services, or chattels sold to the purchaser;

    2. That the seller guarantees in writing that the purchaser will derive income from the business opportunity which exceeds the price paid or rent charged for the business opportunity or that the seller will refund all or part of the price paid or rent charged for the business opportunity, or will repurchase any of the products, equipment, supplies, or chattels supplied by the seller, if the purchaser is unsatisfied with the business opportunity; or

    3. That the seller will provide a sales program or marketing program that will enable the purchaser to derive income from the business opportunity, except that this paragraph shall not apply to the sale of a sales program or marketing program made in conjunction with the licensing of a registered trademark or service mark that is registered under the laws of any state or of the United States.

    
    

15. The Department has established that Star Vision sells a business opportunity for which the purchaser is required to pay an initial fee or sum of money which exceeds $500.

16. Star Vision has sold and offered to sell a business opportunity without filing a disclosure statement with the Department in violation of Chapter 559.805 (1), Florida Statutes.

    
    

17. Section 559.805, Florida Statutes, provides in part:

    
    

    (1) Every seller of a business opportunity shall file with the department a copy of the disclosure statement required by s. 559.803 prior to placing an advertisement or making any other representation designed to offer to, sell to, or solicit an offer to buy a business opportunity from a prospective purchaser in this state...

    
    

18. Star Vision has attended two trade shows in the State of Florida offering to sell a business opportunity, and has sold a business opportunity to Alan Drake prior to filing a disclosure statement with the Department thereby committing three violations of Section 559.805, Florida Statutes.

    
    

19. Section 559.803, Florida Statutes, provides in part:

    
    

    At least 3 working days prior to the time a purchaser signs a business opportunity contract, or at least 3 working days prior to the receipt of any consideration by the seller, whichever occurs first, the seller must provide the prospective purchaser a written document, the cover sheet of which is entitled in at least

    12-point boldfaced capital letters "DISCLOSURES REQUIRED BY FLORIDA LAW."

    
    

20. Star Vision failed to provide Alan Drake with a disclosure statement upon selling him a business opportunity in violation of Chapter 559.803, Florida Statutes.

    
    

21. Section 559.813(2), Florida Statutes, provides:

    
    

    If a business opportunity seller uses untrue

    or misleading statements in the sale of a business opportunity, fails to give the proper disclosures, fails to include the contract provisions, fails to post the bond as required in this part, or violates any other provision of this part, the department may order the seller to cease and desist selling business opportunities until the seller complies with the provisions of this part. The department may also impose an administrative fine not to exceed $5,000 per violation.

    
    

22. If one considers the two offers to the Department's agents in Jacksonville as two violations, and the sale to Drake as one violation, Star Vision has committed three violations of the Sale or Lease of Business Opportunities Act, each of which carries a maximum fine of $5,000. Because the sale in Lauderdale was less than $500 and there was no follow up to see if they were offering to sell at a later time for more, it cannot be determined if the Respondents were in violation at that show.

RECOMMENDATION

Based upon the consideration of the facts found and the conclusions of law reached, it is,

RECOMMENDED:

That a Final Order be entered by the Department of Agriculture and Consumer Services ordering that:

Respondents to cease and desist selling business opportunities in the State of Florida,

Imposing an administrative fine of $5,000 for each violation, in accordance with Section 559.813(2), Florida Statutes, against Terry Granhan and Mike Bray d/b/a Star Vision Direct Cable in the amount of $15,000.

DONE and ENTERED this 30th day of November, 1994, in Tallahassee, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 30th day of November, 1994.

COPIES FURNISHED:

Jay S. Levenstein, Senior Attorney Department of Agriculture

and Consumer Services

515 Mayo Building Tallahassee, FL 32399-0800

Terry Granhan and Mike Bray Star Vision Direct Cable, Inc. 9050 Highway 64, Suite 115

Memphis, TN 38002

Bob Crawford, Commissioner Department of Agriculture

and Consumer Services The Capitol, PL-10

Tallahassee, FL 32399-0810

Richard Tritschler, General Counsel Department of Agriculture

and Consumer Services The Capitol, PL-10

Tallahassee, FL 32399-0810

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 94-004357

Orders for Case No: 94-004357