About the Franchise Investment Law

In 1970, the California Legislature enacted one of the first franchise disclosure laws in the country. The Franchise Investment Law generally requires franchisors to register with the Department before offering and selling franchises in California.

The Franchise Investment Law also requires that registration disclosure documents and final franchise agreements be provided to prospective franchisees at least fourteen days before the sale of a franchise. The purpose of the pre-sale disclosure is to provide, fully and truthfully, material information about the franchisor and its franchise offering to the prospective franchisee, prior to the prospective franchisee making a purchase decision.

The California Franchise Investment Law (beginning at section 31000 of the California Corporations Code).

• Part 1 – Definitions Sections 31000-31019
• Part 2 – Regulation Of The Sale Of Franchises
  • Chapter 1 – Exemptions Sections 31100-31109.1
  • Chapter 2 – Disclosure Sections 31110-31125
  • Chapter 3 – General Provisions Sections 31150-31158
• Part 3 – Fraudulent and Prohibited Practices
  • Chapter 1 – Fraudulent Practices Sections 31200-31204
  • Chapter 2 – Prohibited Practices Sections 31210-31211
  • Chapter 3 – Unfair Practices Section 31220
• Part 4 – Enforcement
  • Chapter 1 – Civil Liability Sections 31300-31306
  • Chapter 2 – Powers Of The Commissioner Sections 31400-31408
  • Chapter 3 – Crimes Sections 31410-31412
  • Chapter 4 – Service Of Process Section 31420
• Part 5 – Administration Sections 31500-31506
• Part 6 – General Provisions Sections 31510-31516