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California Franchise Registration: FDD Registration

California Franchise Registration Status: Registration State
State Registration Fee: $675.00

The State of California is a franchise registration state. That means franchisors are required to "register" their FDD with the California regulatory agency. Prior to offering or selling a franchise in the State of California, franchisors must satisfy the mandated federal FTC Franchise Disclosure Document requirements.

As a "franchise registration state," California requires franchisors offering or selling franchises from or within the state of California to file and register their FDD with the California Department of Business Oversight. Failure to register a franchise in California may result in significant liability. The California Department of Business Oversight requires various documents to be filed with an FDD registration.

The California Franchise Investment Law governs the offer and sale of franchises in the State of California. California broadly 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.

Under Section 31110 of the Franchise Investment Law a franchisor cannot offer or sell a franchise without first registering its FDD with the California Department of Business Oversight. Once registered the FDD must be properly disclosed to the prospective franchisee.

To learn more about registering your FDD in California and how we can help, give us a call at (800) 976-4904 or contact us.

California Franchise and Business Opportunity FAQs

Who regulates franchises in California?

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 application to be approved?

If the Department of Business Oversight (DBO) doesn't send you a letter rejecting your application, it will become automatically effective 30 business days after your filing.

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 California?

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

OR

California Department of Business Oversight
71 Stevenson Street, Suite 2100
San Francisco, CA 94105-2908

OR

California Department of Business Oversight
1515 K Street, Suite 200
Sacramento, CA 95814-4052

Need assistance registering your FDD in California? 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 Relations Act - This page contains links to California's Franchise Relations Act

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.

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

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