Seller Assisted Marketing Plans sellers are required to file with the Attorney General’s Office prior to advertising or selling business opportunities in California. The Attorney General’s Office then reviews the information for compliance with law before the company can begin selling in California. The SAMP law requires that the seller give the same information to prospective purchasers at least 48 hours before the purchaser signs any contract or pays the seller any money.
Seller Assisted Marketing Plans are defined in the California Civil Code as follows:
(A) ‘Seller assisted marketing plan’ means any sale or lease or offer to sell or lease any product, equipment, supplies, or services which requires a total initial payment exceeding five hundred dollars ($500), but requires an initial cash payment of less than fifty thousand dollars
($50,000), which will aid a purchaser or will be used by or on behalf of the purchaser in connection with or incidental to beginning, maintaining, or operating a business when the Seller Assisted Marketing Plan seller has advertised or in other manner solicited the purchase or lease of the Seller Assisted Marketing Plan and done any of the following acts:
- (1) Represented that the purchaser will earn, is likely to earn, or can earn an amount in excess of the initial payment paid by the purchaser for participation in the Seller Assisted Marketing Plan.
- (2) Represented that there is a market for the product, equipment, supplies, or services, or any product marketed by the user of the product, equipment, supplies, or services sold or leased or offered for sale or lease to the purchaser by the seller, or anything, be it tangible or intangible, made, produced, fabricated, grown, bred, modified, or developed by the purchaser using, in whole or in part, the product, supplies, equipment, or services which were sold or leased or offered for sale or lease to the purchaser by the Seller Assisted Marketing Plan seller.
- (3) Represented that the seller will buy back or is likely to buy back any product made, produced, fabricated, grown, or bred by the purchaser using, in whole or in part, the product, supplies, equipment, or services which were initially sold or leased or offered for sale or lease to the purchaser by the Seller Assisted Marketing Plan seller.
As part of the filing, the prospective seller must provide the Attorney General’s Office with information about the company including; the people running the company, the financial condition of the company and the length of time that the company has been in business and a copy of the contract they plan to have the purchasers sign. The SAMP Act prohibits statements about potential earnings unless data is given about average earnings and prohibits charging payment of more than 20% in advance of delivering goods and services.
Lori Lotko on December 25th, 2005 at 9:57 pm
I am currently involved in litigation with regards to a SAMP’s case.
I researched and found the information I needed on the internet. I have since filed suit against the seller and we are going before the judge on Jan 23, 2005.
Hind sight being 20/20, I wish I had known about SAMP’s BEFORE purchase of business. I worked very hard for 8 months and never came close to making the money that was promised by the seller.
I was not looking to become rich and I wasn’t looking to make money without working hard. I expected the business I purchased to deliver on it’s contract.
At first I felt stupid even though I know I am not, so if anyone else has found themselves a victim of fraud do not feel alone.
It happens to smart people everyday.
Mark K on January 25th, 2006 at 2:12 pm
Lori-
How did your hearing turn out? Who are you litigating against in your SAMP lawsuit? I may have a similar action going on in Nevada.
Lori Lotko on February 10th, 2006 at 10:03 pm
Hi Mark,
I settled my case yesterday. We both walk away without paying any more attorney fees or money “owed” to each other. I am now 40K in debt because of the purchase of this business but I will be profitable someday.
I made a business decision to settle with defendant. It was going to cost another 20K to take it all the way and I just didn’t see it being worth it.
Through our settlement agreement, I now own the company I purchased out right. I now own the old domaine name. I am no longer held back or burdened by the past. Defendant is no longer allowed to use business name nor in the future.
I can tell you that SAMP’s is a good statute but be careful. There are some conditions that must be met in order for your case to fall under the SAMP’s statute.
I am happy to share with you what I have learned.
Lori
http://www.restaurantrep.com
http://www.restaurantreps.com
http://www.restaurantreps.net