California Franchise Registration: FDD Registration
California Franchise Registration Status: Registration State
State Registration Fee: $675.00
California Franchise Law
California is a franchise registration state. As a franchisor, you must register your FDD with the California Department of Business Oversight before offering or selling a franchise. The initial filing fee is $675 and the renewal fee is $450. Registration lasts for one year and requires annual renewal.
As a franchise registration state, before you offer or sell a franchise in the state of California you must file and register your FDD with the California Department of Business Oversight. Once registered, you must renew your FDD registration on an annual basis and you must comply with the requirements of the California Franchise Investment Law which defines a franchise as a business opportunity involving a marketing plan, the license of a trademark and the direct or indirect payment of a fee.
To learn more about registering your FDD with the California Department of Business Oversight and how we can help get you registered, give us a call at (800) 976-4904 or contact us.
California Franchise and Business Opportunity FAQs
Who Regulates Franchises in the State?
The Department of Business Oversight (DBO) regulates and oversees the enforcement of California’s Franchise Investment Law and the registration of FDD’s.
What Should I Include with My Initial Franchise Application?
The initial franchise application should include:
- Filing fee of $675, payable to the Department of Business Oversight;
- Cover letter clearly stating the name of the applicant, the Org-Id number (if known), and the franchisor's fiscal year-end date;
- Uniform Franchise Registration Application and a signed and notarized Signature Verification Page and Corporate Acknowledgment (by an officer or general partner of the franchisor or an individual with a power of attorney if the appropriate resolution is attached); and a signed and notarized Signature Verification Page and Corporate Acknowledgment (by an officer or general partner of the franchisor or an individual with a power of attorney if the appropriate resolution is attached);
- Customer Authorization of Disclosure of Financial Records;
- Uniform Consent to Service of Process (not required for California entities);
- Supplemental Information Page;
- Sales Agent Disclosure Forms;
- Franchise Disclosure Document in plain English with all exhibits including the Franchise Agreement;
- California State addendum;
- Audited Financial statements, with a manually signed consent by the certified public accountant or firm that audited the financial statements;
- Internet Ad Exemption Notice;
- Guarantee of Performance or other Financial Assurances (if required/needed).
Visit the California Department of Business Oversight Franchise Forms and Applications page to download many of the forms required for FDD registration and renewal.
What are the Fees for the Franchise Applications in California?
Franchise Registration - $675
Renewal Franchise Registration - $450
What Financial Statements Are Needed for Registration?
Your application should include the franchisor's financial statements audited by an independent certified public accountant. The financial statements required to be filed include:
- A balance sheet as of a date within 90 days prior to the application filing date;
- Profit and loss statements for each of the three fiscal years preceding the date of the balance sheet;
- Profit and loss statements for the period between the close of the last fiscal year and the date of the balance sheet.
How Long Will It Take for My Registration Application to Be Approved?
When and how long it will take to obtain registration will depend on the quality and thoroughness of your FDD and registration application and, how quick you respond to comments letters from the examining attorney assigned to review your application. Assuming that you send a complete FDD registration application, California applies an automatic effectiveness standard where, technically, your FDD registration will become automatically effective thirty (30) business days after the filing of your registration application. However, in practice, you should expect that within this thirty (30) day period you will receive a comment letter from senior counsel at the Department of Business Oversight. The comment letter will toll the automatic effectiveness of your registration application (i.e., you will not be registered yet) subject to you updating your FDD and application in response to the examining attorneys comments. Unless you receive a registration notice from the State of California, you should never assume that registration has occurred. Once registered, you will receive an "Order of Effectiveness" from the Department of Business Oversight. The Order of Effectiveness will note the date that your registration is effective and the date when your registration will expire.
When Do I Have to Renew My FDD Registration?
You must renew your FDD registration on an annual basis and before the date that your registration expires which is, typically, on April 20th. The Order of Effectiveness that was issued to you when you obtained registration in the prior year will contain the date that your registration expires. Under Section 31121 of the California Franchise Investment Law, your renewal application must be filed before your registration expires. Otherwise, you will be required to file a new / initial application for registration which requires payment of a higher filing fee.
Are There Exemptions to California Registration?
Yes, in certain limited instances there are exemptions to the registration requirements of California’s Franchise Investment Law.
Exemptions include limited circumstances (subject to qualification) involving the "net worth" of the franchisee, the franchise qualifying as a "fractional franchise" or the "experience" of the franchisee. Before relying on and claimed or perceived FDD registration exemption you must carefully evaluate application of the exemption with an experienced franchise lawyer.
What if the Franchise Sale Occurs Outside of the state?
Section 31105 of the California Franchise Investment Law states:
"Any offer, sale, or other transfer of a franchise, or any interest in a franchise, to a resident of another state or any territory or foreign country, shall be exempted from the provision of Chapter 2 (commencing with Section 31110) of this part, if all locations from which sales, leases or other transactions between the franchised business and its customers are made, or goods or services are distributed, are physically located outside this state."
Where is the Registration Application Filed?
The registration application should be mailed to the following address where the California Department of Corporations will either approve or deny the franchise registration application:
California Department of Business Oversight
320 West 4th Street, Suite 750
Los Angeles, CA 90013-2344
California Department of Business Oversight
71 Stevenson Street, Suite 2100
San Francisco, CA 94105-2908
California Department of Business Oversight
1515 K Street, Suite 200
Sacramento, CA 95814-4052
Need assistance registering your FDD? Give us a call at (800) 976-4904 or fill out a contact form to learn more.
Useful Links Concerning California Franchise Laws
California Dept of Business Oversight Franchise Registration Information - This is the primary franchise resource page published by the California Department of Business Oversight. This page includes important links and information for franchisors, including FAQ's about California franchise law.
California Franchise FAQ's - This page includes helpful FAQ's about franchise registrations requirements, registration requirements and administrative procedures that the Department of Business Oversight follows in reviewing and registering FDD's.
California Franchise Investment Law – This page is a link to California’s Franchise Investment law which is the primary statute that defines what is and is not a franchise, and FDD registration and renewal requirements.
California Franchise Relations Act - This page contains links to California's Franchise Relations Act. The California Franchise Relationship Act is a franchise relationship statute that governs the relationship between franchisors and franchisees. Under this Act California prohibits certain actions and imposes certain requirements on franchisors related to their franchisees.
California Franchise Filings Portal - This is the electronic filings self service portal of the California Department of Business Oversight. Under the franchise filings section you may conduct a document search and review uniform franchise registration applications on file with the Department. Information includes initial franchise filing and FDD registration applications, renewal applications and post-effective amendment applications.