California Corporations Code

§ 31101

CORP § 31101 Effective Jan 1, 2014Div. 5 · Title 4 · Part 2 · Ch. 1

Statute text

There shall be exempted from the provisions of Chapter 2 (commencing with Section 31110) of this part the offer and sale of a franchise if the franchisor complies with each of the following minimum net worth, experience, disclosure, and notice filing requirements:

(a)Net worth. The franchisor and, when necessary, a corporation owning at least 80 percent of the franchisor (parent) meet one of the following net worth requirements, according to financial statements for the fiscal year just ended. The franchisor and the parent, when necessary, may rely upon the immediately preceding fiscal year’s audited financial statement for 15 months from that fiscal year end date.

(1)The franchisor has a net worth on a consolidated basis of not less than five million dollars ($5,000,000), according to its audited financial statement.

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Legislative history

Amended by Stats. 2013, Ch. 334, Sec. 1. (SB 537) Effective January 1, 2014.