The Legislature hereby finds and declares that the widespread sale of franchises is a relatively new form of business which has created numerous problems both from an investment and a business point of view in the State of California. Prior to the enactment of this division, the sale of franchises was regulated only to the limited extent to which the Corporate Securities Law of 1968 applied to those transactions. California franchisees have suffered substantial losses where the franchisor or his or her representative has not provided full and complete information regarding the franchisor-franchisee relationship, the details of the contract between franchisor and franchisee, and the prior business experience of the franchisor.
It is the intent of this law to provide each prospective franchisee with the information necessary to make an intelligent decision regarding franchises being offered. Further, it is the intent of this law to prohibit the sale of franchises where the sale would lead to fraud or a likelihood that the franchisor’s promises would not be fulfilled, and to protect the franchisor and franchisee by providing a better understanding of the relationship between the franchisor and franchisee with regard to their business relationship.
Notes of Decisions
Keating v. Superior Court, 645 P.2d 1192 (Cal. 1982).
· cites it 4× “(Corp. Code, § 31001, see generally Corp. Code, § 31000 et seq.”
Key v. Chrysler Motors Corp., 918 P.2d 350 (N.M. 1996).
· cites it 2× “Cal.Corp.Code § 31001. We note that New Mexico does have a Franchise Termination Act.”
1-800-GOT JUNK? LLC v. Superior Court, 189 Cal. App. 4th 500 (Cal. Ct. App. 2010).
“Further, it is the intent of this law to prohibit the sale of franchises where the sale would lead to fraud or a likelihood that the franchisor’s promises would not be fulfilled, and to protect the franchisor and franchisee by providing a better understanding of the relationship…”
Wimsatt v. Beverly Hills Weight Loss Clinics Int'l, Inc., 32 Cal. App. 4th 1511 (Cal. Ct. App. 1995).
“” (Corp. Code, § 31001.) And that is, indeed, what the plaintiffs have alleged here: an out-of-state franchisor, rather misleadingly named Beverly Hills Weight Loss Clinics International, Inc.”
People v. Kline, 110 Cal. App. 3d 587 (Cal. Ct. App. 1980).
· cites it 3× “Further, it is the intent of this law to prohibit the sale of franchises where such sale would lead to fraud or a likelihood that the franchisor’s promises would not be fulfilled, and to protect the franchisor by providing a better understanding of the relationship between the…”
Cottman Transmission Sys., LLC v. Kershner, 492 F. Supp. 2d 461 (E.D. Pa. 2007).
· cites it 2× “, Cal. Corp.Code § 31001 (the “California Franchise Investment Statute” or “CFIL”) (“The [California] Legislature hereby finds and declares that .”
Samica Enter., LLC v. Mail Boxes Etc. USA, Inc., 637 F. Supp. 2d 712 (C.D. Cal. 2008).
“”) (Cal.Corp.Code, § 31001.) Section 31200 Section 31200, which is actionable under section 31300, prohibits misleading representations and omissions found in registered documents.”
Bencharsky v. Cottman Transmission Sys., LLC, 625 F. Supp. 2d 872 (N.D. Cal. 2008).
“In enacting the *879 CFIL, the California Legislature declared its underlying policy: California franchisees have suffered substantial losses where the franchisor or his representative has not provided full and complete information regarding the franchisor-franchisee…”
Davis v. Gulf Oil Corp., 572 F. Supp. 1393 (C.D. Cal. 1983).
“The intent of the legislature in adopting this legislation is expressly set forth in California Corporation Code § 31001: “It is the intent of this law to provide each prospective franchisee with the information necessary to make an intelligent decision regarding franchises…”
Absolute USA, Inc. v. Harman Prof'l, Inc., No. 2:21-cv-06410 (C.D. Cal. Feb. 14, 2023).
· cites it 2× “See CAL. CORP. CODE § 31001. As the parties entered into the 16 Agreement six years before the filing of the initial complaint, the Absolute Plaintiffs’ claim falls 17 outside of the four-year window prescribed by Section 31303.”
Serge Haitayan v. 7-Eleven, Inc., No. 2:17-cv-07454 (C.D. Cal. Sept. 8, 2021).
· cites it 2× “” Cal. Corp. Code § 31001 . In contrast, franchisees are those who “engage in the business of offering, selling or distributing goods or services under” the franchisor’s operating system.”
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