California Franchise Registration Guide

California Franchise Registration Guide

 

California Franchise Registration Guide

The on-trend and diverse California market serves as a great place to launch a franchise. California has an extremely varied market with plenty of spending power, housing headquarters for several major organizations such as tech giant Apple and pharmaceutical distributor McKesson Corp. Comparatively, California represents the 5th largest economy in the world[1]. According to Ca.gov, around 1.5 million veterans live in California, more than any other state in the nation. The total state population tops an estimated 39.5 million residents, with 3 million living each in San Diego, San Jose, and L.A. California reports year after year economic growth, boasting a robust economy full of diversity, the top-market sports teams the 49ers and the Lakers, and the world’s leading entertainment industry hub. California’s franchise laws are intricate, so be sure to use a professional as a guide. 

The Basics of Registering Your Franchise in California:

Since California is a Franchise Registration State, typically you will need 3 things to sell your franchise in California:

  1. California Franchise Registration Filing
  2. California Franchise Registration Fee of $675
  3. Approval of Franchise Registration by California DBO

Remember, regulations can change anytime, so be sure to check in with California’s franchise overview page to see the most up-to-date information.

 

Let’s Break it Down… 

Every franchisor must register with the California Department of Business Oversight prior to the selling of any units. When initially registering your franchise in California, you will need the following items. These are detailed here.

  1. Cover Letter
  2. Uniform Franchise Registration Application
  3. Application Facing Page and a signed and notarized Signature Verification Page and Corporate Acknowledgment
  4. Franchise Disclosure Document (FDD)
  5. Sales Agent Disclosure Form
  6. Initial Registration Fee: $675 initial filing
  7. Internet Ad Exclusion Form
  8. Financial Statements: Completed/audited by a CPA, a balance sheet (from the prior 90 days) and P&L statements, with consent from the auditor.

Every franchisor in California must renew their registration annually which happens 110 days after the end of your fiscal year, meaning an initial registration can last less than one year depending on the fiscal year of the franchisor. All of the same documents as required in initial registration are required for renewal. The renewal fee is $450. If a franchisor fails to file before the deadline, then the renewal fee jumps to $675.

At times, amendments are needed. Why amend? California requires that any material change within the FDD in the condition of the franchisor, subfranchisor, or the information is added as an amendment. The amendment fee is $50 for post-effective amendments.

What’s Next to Register Your Franchise In California?

With the above items in hand, you are ready to register, renew, or amend your FDD with California. File electronically at https://docqnet.dbo.ca.gov/.

For paper applications, one of the following three addresses may be used: 

Department of Business Oversight

320 West 4th Street, Suite 750

Los Angeles, CA 90013-2344

 

Department of Business Oversight

One Sansome Street, Suite 600

San Francisco, CA 94104-4448

 

Department of Business Oversight

1515 K Street, Suite 200

Sacramento, CA 95814-4052

All facts and figures pulled from Census.gov, worldpopulationreview.com

Details for registration are from https://dbo.ca.gov/franchises-frequently-asked-questions-and-answers/

 

[1] https://www.budgetchallenge.org/pages/ca_vs_other_states

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