1976 Franchise Opinions

The Business Law Section is compiling the complete Interpretive Opinions concerning franchise issues from the State of California Department of Corporations.

Here is the archive for 1976. The archive for this year is complete.

  • Opinion No. 76 / 1F - February 5, 1976

    Summary: Acquirer of all of the issued and outstanding shares of a Florida company that manufactured and sold plastic letters, graphic systems and accessories for the sign trade for 26 years sought an opinion for exemption under Section 31101. After the acquisition, the Florida company was dissolved and a separate division of acquirer was formed to operate Florida company's franchised operations. Acquirer was also in the business of manufacturing and selling the same products as the Florida company. Acquirer had a net worth in excess of $5M according to audited statements. Acquirer had 50 franchises in the US and Canada.  However it was the Florida company that had had been franchising for over 26 years and had at all times at least 25 franchises in operation. Acquirer had no franchises in operation in California. Commissioner determined that exemption applied and that the operations of the Florida company as a result of the purchase by acquirer could be credited to Acquirer for purposes of the exemption.

    Key Words: 3Section 31101, Section 31110, Comm. Op. No 72/28F, experienced franchisor exemption

  • Opinion No. 76 / 2F - March 30, 1976

    Summary: Material changes to existing franchise relationships in connection with a purported "renewal" constitute new "offers" and "sales" of franchises and subjected the franchisor to the registration requirements of Section 31110. 

    Key Words: 331110, registration, 31005, 31018, exclusion, material change, offer, sale, renewal 

  • Opinion No. 76 / 3F - November 3, 1976

    Summary: Commissioner concluded that the putative franchisees' sale of their "time" as part of the business enterprise constituted a "service" under Section 31005. Because all other elements of a franchise were present, the putative franchisor must comply with the franchise laws.  

    Key Words: 331005, 31011, franchise fee, goods and services, time, putative

  • Opinion No. 76 / 4F - March 30, 1976

    Summary: Purported sub-licensees were franchisees after Commissioner found that a marketing plan or system may be "prescribed" within the meaning of Section 31005 although there is no obligation on the part of franchisee to observe it, where a specific sales program is outlined, suggested, recommended or otherwise originated by franchisor. 

    Key Words: 331005, prescribed marketing plan or system, commercial symbol, license, optional