Item: SAC Attorneys LLP
Rating: 5
Author: Cynthia F.

California Franchise Law Regarding Registration Requirement

Whether you are starting out in a business venture or trying to expand into California, franchising is a great way to enter and make your mark in the market. However, you may find yourself at odds, not knowing the next step after getting into an agreement with the franchise owner. Sure, you may have their blessing, but do you have the government’s approval, too? Here is a short intro to the things you need so to start your franchising business.

What is a Franchise?

A franchise is a way for businesses to expand into markets outside of their local environment. For example, if you are a business owner in Chicago trying to sell your products to the people of California, you may find it better to find someone who can carry your company’s name, brand, and reputation, to make their own version of your business in California.

In a franchise, the franchise owner gains a boost in publicity for their brand, easier accessibility outside of their local markets, and extra income in terms of licensing and other monetary agreements. Meanwhile, the franchise lessee enjoys the benefits of operating a well-known brand, removing the burden of marketing off their backs. Oftentimes, it can be a mutually beneficial relationship for both parties.

The Registration Requirements

To register for a franchise in California, you should go to the state’s Department of Financial Protection & Innovation and file for an application for registration with the following documents:

A filing fee of $675 to be paid to the DFPI
A cover letter stating the applicant’s name, Org-Id number, and the franchise owner’s fiscal year-end date
A Consent to Service of Process for those who are not from California
An Application Facing Page
A notarized and signed Signature Verification Page and Corporate Acknowledgment
A Customer Authorization of Disclosure of Financial Records
A Supplemental Information Page
Any Forms for the Sales Agent Disclosure
Franchise Disclosure Document, which needs to be in English
California State addendum
Audited Financial statements, which needs to be per Generally Accepted Accounting Principles (GAAP)
Internet Ad Exemption Notice
Guarantee of Performance (or any other approved Financial Assurances)

You can send your application to any of the department’s main offices in Los Angeles, San Francisco, and Sacramento. You can also have it submitted online through their website.

Exemptions

Some owners and businesses are exempted from having to apply. This includes parent companies with a large net worth. A franchise owner with a minimum of either $5 million or one with at least $1 million, but backed up by a parent company worth at least $5 million, will be considered as big enough to no longer need to apply. Another is when the franchise owner already has at least 25 franchisees.

Are You Trying to Create a Franchise in California?

The law can be confusing for most laypeople, especially if you are trying to open a franchise. It can easily seem as though it has all these twists and turns that ensure the fairness and justness of the process for everyone. If you ever need any help with commercial law, we at SAC LLP can help you with it. To learn more, please contact us today at (408) 716-1790 to schedule an appointment.

★★★★★

Mr. Cai Is a Diligent Attorney. My sister and I were defendants in a civil litigation case. We hired James Cai and his law firm, SAC Attorneys LLP. Mr. Cai is a diligent attorney and responded to our questions in a timely fashion. He and his staff were very helpful in keeping us informed of the proceedings of the case and in explaining each step. Mr. Cai is also very conscientious of fees and costs, and avoided unnecessary charges. The results of the Summary Adjudication sided with us. The Court Trial resulted in the “Final Statement of Decision” and “Judgment after Court Trial” overwhelmingly siding with us. Cynthia F.

I Am Truly Impressed. After spending a significant amount of time, money and efforts with my previous counsel at a larger law firm without getting meaningful results, I transferred my employment matter to SAC Attorneys LLP. The attorneys there were able to understand the complex situations of my case and put together an aggressive litigation strategy. We were able to file a compelling complaint within a week and forced the opposing party, which was represented by one of the largest law firms in California, to make a substantial settlement offer shortly thereafter. I am truly impressed by the no nonsense and results oriented approach by SAC Attorneys LLP attorneys. A job well done! X. Gao

They Took Time to Understand Our Technology. I am the founder of a bioinformatics start-up in the Silicon Valley and chose SAC Attorneys LLP as our corporate counsels. Their attorneys have great experience with high tech start-ups and were able to offer a highly competitive service plan while not sacrificing a bit of their quality of services. They took time to understand our technology and provided value added services by introducing investors and job candidates to us. We regard our attorneys at SAC Attorneys LLP not only as our legal advisors but also our venture partners. Dr. Pete S.

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