Commissioner's Opinion No. 73 / 45F

State of California Department of Corporations

Brian R. Van Camp, 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. John M. Seitman
Attorney at Law
Scales, Patton, Ellsworth & Corbett
Suite 1250
Southern California First National
Bank Building
San Diego, CA 92101

Dear Mr. Seitman:

The request for an interpretive opinion, contained in your letter dated August 6, 1973, has been considered by the Commissioner. Your letter raises the question whether the transaction by which Peter W. Upham, a franchisee and subfranchisor by virtue of an agreement with Systems Building Industries, Inc. ( "Systems" ), proposes "to sell his rights and duties under the agreement in their entirety to another", is subject to the registration requirement of Section 31110 or other provisions of the Franchise Investment Law.

According to our records the sale of Systems franchises and area franchises has been registered with this Department pursuant to Part 2 of the Law. In our opinion, the proposed sale of Mr. Upham's rights, as a franchisee and subfranchisor, assuming that it will be effected for his own account and not by or through Systems, the franchisor, will be exempted from the registration requirement of Section 31110 by virtue of Section 31102.

Dated: San Francisco, California
November 12, 1973

By order of
BRIAN R. VAN CAMP
Commissioner of Corporations

By __________________
HANS A. MATTES
Assistant Commissioner
Office of Policy