407.405. Pyramid sales schemes prohibited--cancellation of franchise without notice prohibited, exceptions. - Missouri Statutes

Pyramid sales schemes prohibited--cancellation of franchise withoutnotice prohibited, exceptions.

407.405. No person shall, directly or through the use ofagents or intermediaries, in connection with the sale ordistribution of goods, service, or other property, sell, offer orattempt to sell a participation or the right to participate in apyramid sales scheme. No person who has granted a franchise toanother person shall cancel or otherwise terminate any suchfranchise agreement without notifying such person of thecancellation, termination or failure to renew in writing at leastninety days in advance of the cancellation, termination orfailure to renew, except that when criminal misconduct, fraud,abandonment, bankruptcy or insolvency of the franchisee, or thegiving of a no account or insufficient funds check is the basisor grounds for cancellation or termination, the ninety days'notice shall not be required.

(L. 1974 H.B. 1132 § 2, A.L. 1975 H.B. 810 § 2)

(1980) Solicitation of individuals to join pyramid structured club, the purpose of which was to generate money payable to members higher up on the pyramidal scale, violated statute prohibiting pyramid sales schemes. State ex rel. Ashcroft v. Wahl (A.), 600 S.W.2d 175.

(1980) General intent of the legislature in the enactment of statutes prohibiting pyramid sales schemes is to buttress a strong public policy against pyramid sales schemes involving cover or disguise of some seemingly legitimate commercial transaction. State ex rel. Ashcroft v. Wahl (A.), 600 S.W.2d 175.

(1986) Ninety-day notice requirement for franchise cancellation held not repealed by implication as applied to motor vehicle franchises by enactment of Motor Vehicle Franchise Practice Act, sections 407.810 to 407.835, RSMo. Maude v. General Motors Corp., 626 F.Supp. 1081 (W.D.Mo.)