Cal. Codes » Corporations Code / TITLE 4. SECURITIES / DIVISION 5. FRANCHISE INVESTMENT LAW / PART 1. DEFINITIONS
California Codes

Cal. Corporations Code § 31011 (2026)

Definitions — Franchise Investment Law

✓ leginfo export of Sept. 26, 2026 (applied Oct. 1, 2026)
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“Franchise fee” means any fee or charge that a franchisee or subfranchisor is required to pay or agrees to pay for the right to enter into a business under a franchise agreement, including, but not limited to, any payment for goods and services.

However, the following shall not be considered the payment of a franchise fee:

(a)The purchase or agreement to purchase goods at a bona fide wholesale price if no obligation is imposed upon the purchaser to purchase or pay for a quantity of the goods in excess of that which a reasonable businessperson normally would purchase by way of a starting inventory or supply or to maintain a going inventory or supply.

(b)The payment of a reasonable service charge to the issuer of a credit card by an establishment accepting or honoring that credit card.

(c)Amounts paid to a trading stamp company under Chapter 3 (commencing with Section 17750) of Part 3 of Division 7 of the Business and Professions Code by a person issuing trading stamps in connection with the retail sale of merchandise or service.

Notes of Decisions
Cited in 6 cases (3 in the last 5 years), 1986–2023 · leading case: Thueson v. U-Haul Int'l, Inc., 144 Cal. App. 4th 664 (Cal. Ct. App. 2006).
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Thueson v. U-Haul Int'l, Inc., 144 Cal. App. 4th 664 (Cal. Ct. App. 2006). · cites it 2× “” (Corp. Code, § 31011; Bus. & Prof. Code, § 20007.”
Premier Wine & Spirits of South Dakota Inc. v. E. & J. Gallo Winery, 644 F. Supp. 1431 (E.D. Cal. 1986). “Compare Cal.Corp. Code § 31011 and Cal.Bus. & Prof.”
Twin Cities Galleries, LLC v. Media Arts Grp., Inc., 476 F.3d 598 (8th Cir. 2007). · cites it 2× “See Cal. Corp.Code § 31011 (referring to payments "to enter into” a business); but cf.”
Good Times Restaurants, LLC v. Shindig Hosp. Grp., LLC, No. 3:21-cv-07688 (N.D. Cal. Nov. 10, 2022). · cites it 4× “” Cal. Corp. Code § 31011 . Here, at a minimum, a $75,000 licensing fee, which Shindig agreed to pay for the right to use the “Rooh” tradename and the “overall Rooh restaurant concept” (dkt.”
Absolute USA, Inc. v. Harman Prof'l, Inc., No. 2:21-cv-06410 (C.D. Cal. Feb. 14, 2023). “(citing Cal. Corp. Code § 31011 ). “[A]ny fee or charge which the franchisee is required 7 to pay to the franchisor or an affiliate of the franchisor for the right to engage in business is a 8 franchise fee regardless of the designation given to, or the form of, such payment.”
Singh v. Wireless Vision, LLC, No. 2:22-cv-01018 (E.D. Cal. Mar. 31, 2023). “4th at 668 ; Cal. Corp. Code § 31011 (defining franchise fee as it is 28 used in the CFIL).”
Cal. Corporations Code § 31011(a): 1 case
Twin Cities Galleries, LLC v. Media Arts Grp., Inc., 476 F.3d 598 (8th Cir. 2007). “See Cal. Corp.Code § 31011 (referring to payments "to enter into” a business); but cf.”
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