Cal. Codes » Corporations Code / TITLE 4. SECURITIES / DIVISION 5. FRANCHISE INVESTMENT LAW / PART 2. REGULATION OF THE SALE OF FRANCHISES / CHAPTER 1. Exemptions
California Codes

Cal. Corporations Code § 31107 (2026)

Exemptions — Regulation Of The Sale Of Franchises

✓ leginfo export of Sept. 26, 2026 (applied Oct. 1, 2026)
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There shall be exempted from the provisions of Chapter 2 (commencing with Section 31110) of this part, any offer (but not the sale) by a franchisor of a franchise while an application for renewal or amendment is pending if the prospective franchisee receives all of the following:

(a)The franchise disclosure document and its exhibits as filed with the commissioner with the application for renewal or amendment.

(b)A written statement from the franchisor that (1) the filing has been made but is not effective, (2) the information in the franchise disclosure document and exhibits has not been reviewed by the commissioner, and (3) the franchisor will deliver to the prospective franchisee an effective franchise disclosure document and exhibits at least 14 days prior to execution by the prospective franchisee of a binding agreement or payment of any consideration to the franchisor, or any person affiliated with the franchisor, whichever occurs first, showing all material changes from the franchise disclosure document and exhibits received by the prospective franchisee under subdivision (a) of this section.

(c)The franchise disclosure document and exhibits in accordance with paragraph (3) of subdivision (b) of this section.

Notes of Decisions
Cited in 1 case, 2020–2020 · leading case: Handel's Enter., Inc. v. Schulenburg, 431 F. Supp. 3d 946 (N.D. Ohio 2020).
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Handel's Enter., Inc. v. Schulenburg, 431 F. Supp. 3d 946 (N.D. Ohio 2020). “Cal. Corp. Code § 31107 . Schulenburg asserts that Handel’s violated §§ 31123 and 31107 when it continued with the offer and sale of the franchise to Schulenburg in January 2016 while Handel’s application to amend the 2015 FDD was pending with the DBO without providing any of…”
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