Interpretive Opinion No. 71 / 34F
State of California Department of Corporations
Anthony R. Pierno, Commissioner
In reply refer to: File No. _____
This interpretive opinion is issued by the Commissioner of Corporations pursuant to section 31510 of the franchise investment law. It is applicable only to the transaction identified in the request therefor, and may not be relied upon in connection with any other transaction.
Mr. Phillip F. Zeidman
Attorney at Law
Brownstein, Zeidman, Drew
1025 Connecticut Ave., N. W.
Washington, DC 20036
Dear Mr. Zeidman:
The request for an interpretive opinion, contained in your letter dated April 28, 1971, has been considered by the Commissioner. Your letter raises the question whether any and/or all advertisements published by General Business Services, Inc. ( "General" ), under the circumstances described by you, are subject to the filing requirements of Section 31156 of the Franchise Investment Law. This question is answered in the negative.
We understand that General has an effective registration to offer and sell franchises in California. It proposes to publish advertisements in the national edition of the Wall Street Journal and, therefore, incidentally in the Pacific Coast edition of the Wall Street Journal.
Section 31156 of the Franchise Investment Law requires the filing of a true copy of any advertisement offering a franchise, published in this state, subject to the registration requirement of the Law at least three business days prior to the first publication, or such shorter period as the Commissioner may by rule or order allow, unless an exemption or rule of the Commissioner is available. Section 31013(c) provides, in part, that an offer to sell a franchise is not made in California merely because the publisher circulates or there is circulated on his behalf in California any bona fide newspaper of general, regular, and paid circulation which has more than two-thirds of its circulation outside of California during the past twelve months. Rule 013 provides, in part, that a newspaper which publishes a separate edition circulated in California, which does not carry the same advertisement as that of other editions of the same publication, shall be considered a separate newspaper from the other editions with respect to any advertisement which is not carried in all editions of that newspaper.
Since the advertisements published by General will be in the national edition of the Wall Street Journal which we assume has had two-thirds of its circulation outside California during the last twelve months, and only incidentally in the Pacific Coast edition of that newspaper, these advertisements are not subject to the filing requirements of Section 31156 of the Franchise Investment Law.
Dated: San Francisco California
May 27, 1971
By order of
ANTHONY R. PIERNO
Commissioner of Corporations
JAMES L. KELLY
Chief Deputy Commissioner