Franchise Brokers – Frequently Asked Questions (FAQ)

New laws will require Franchise Brokers to register every year and provide certain disclosures. However, these rules are not active yet.

A Franchise Broker is anyone who takes part in offering or selling a franchise and gets paid (or expects to get paid) by a franchisor, subfranchisor, franchisee, or any of their affiliates. They may also be called franchise sellers, broker networks, broker organizations, franchise sales organizations, consultants, or coaches.

 The following people are not considered Franchise Brokers:

1. A franchisor, subfranchisor, area representative, or any of their officers, directors, or employees
2. An employee of an affiliate of the franchisor or subfranchisor
3. A franchisee of the franchise being offered, unless that franchisee runs a franchise‑broker business

No. Under California Corporations Code section 31528, registration will not start until one year after the Legislature provides funding for the program. As of 2026, no funding has been approved, so the registration requirement is not yet in effect.

It means the new rules will only begin after the Legislature sets aside money to run the program. Once funding is approved, Franchise Brokers will have one full year to prepare before compliance is required.

No. There are no current compliance steps. Franchise Brokers may wish to watch for legislative updates in case funding is approved.

Franchise Brokers will need to pay a registration fee and submit a Uniform Franchise Broker Disclosure Document. Requirements are described in California Corporations Code section 31527.

Registration will be required every year. Each registration will expire on December 31 of the same year as it becomes effective.

The Department of Financial Protection and Innovation (DFPI) will manage the registration program once the Legislature provides funding and the law becomes operative.