Interpretive Opinion No. 71 / 44F
State of California Department of Corporations
James L. Kelly, Acting 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.
Mrs. Dorothy A. Schmidt
Real Estate Broker
P.O. Box 255
June Lake, CA 93529
Dear Mrs Schmidt:
The request for an expression of our opinion contained in your letter dated July 8, 1971, has been considered by the Commissioner. In your letter you have raised the question whether the offer or sale by an individual holder of a franchise originally sold by a company described by you as Kampgrounds of America, which we assume to be the company known according to our records as Kampgrounds of America, Inc. ("Kampgrounds") is subject to the registration requirement of Section 31110 or other provisions of the Franchise Investment Law. On the foregoing assumption, and to the extent set forth below this question is answered in the negative.
As pointed out in the recitals introductory to this interpretive opinion, such opinions issued by the commissioner of Corporations pursuant to Section 31510 of the Franchise Investment Law, are applicable only to the transaction identified in the request and may not be relied upon in connection with any other transaction. For that reason, according to the enclosed Release No. 2-F setting forth the procedure applicable to requests for interpretive opinions, the Commissioner requires that the request include the names of all parties to the transaction. Inasmuch as you are the only person identified in your letter as being interested in the sale of franchises, this opinion is applicable only to such sales of Kampgrounds franchises as may be effected by you, and is not applicable to the sale of franchises by other individual holders.
Our records show that the original sale of Kampgrounds franchises has been registered with this Department pursuant to Part 2 of the Law. In our opinion, the sale by you of such franchises if owned by individuals, while subject to other provisions of the Franchise Investment Law to which your attention is called, is exempted from the registration requirement of Section 31110, no matter whether you are the owner of the franchise or whether you are selling a franchise owned by another individual.
Section 31102 exempts from the registration requirement of Section 31110 the offer or sale of a franchise by a franchisee for his own account if the sale is not effected by or through a franchisor. This exemption would be available to you if you sell a Kampgrounds franchise owned by you without effecting such sale by or through Kampgrounds.
Moreover, as regards the sale by you of Kampgrounds franchises owned by other individuals, as a California licensed real estate broker I you are. exempted from the provision of Section 31210, which otherwise requires identification in the application for registration, of persons effecting sales of nonexempt franchises in this state.
Dated: San Francisco California
August 13, 1971
By order of
JAMES L. KELLY
Acting Commissioner of Corporations
HANS A. MATTES
Office of Policy