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Cal. Corp. Code § 31011

DEFINITIONS

Known as the Franchise Investment Law

The act spans §§ 31000–31528 (118 sections).

Applied in 2 court decisions — leading case Twin Cities Galleries, LLC v. Media Arts Group, Inc. (2007)

Most recently applied in Twin Cities Galleries, LLC v. Media Arts Group, Inc. (February 2007)

Amended by Stats. 2002, Ch. 664, Sec. 54

“Franchise fee” means any fee or charge that a franchisee or subfranchisor is required to pay or agrees to pay for the right to enter into a business under a franchise agreement, including, but not limited to, any payment for goods and services.

However, the following shall not be considered the payment of a franchise fee:

(a) The purchase or agreement to purchase goods at a bona fide wholesale price if no obligation is imposed upon the purchaser to purchase or pay for a quantity of the goods in excess of that which a reasonable businessperson normally would purchase by way of a starting inventory or supply or to maintain a going inventory or supply.

(b) The payment of a reasonable service charge to the issuer of a credit card by an establishment accepting or honoring that credit card.

(c) Amounts paid to a trading stamp company under Chapter 3 (commencing with Section 17750) of Part 3 of Division 7 of the Business and Professions Code by a person issuing trading stamps in connection with the retail sale of merchandise or service.

Official source: California Legislative Information. Reproduced from public-domain California statutes; confirm against the official source for the current text. Not legal advice.