Miscellaneous Provisions - Franchise Relations - Business & Professions - CA

Section § 20041

This law section outlines when the rules in the chapter apply to franchise agreements. Generally, the rules apply to franchises started or renewed after January 1, 1981, and to those with no set end date that either party can end without needing a specific reason. Amendments from 2016 apply to new or renewed agreements from 2016 onward. Amendments from 2023 apply to new, amended, or renewed agreements from that year, but if a franchise is changed after 2023 because the franchisee asked for it and the change doesn’t harm their rights, the new rules don't apply.

(a) Except as provided in subdivision (b), the provisions of this chapter shall apply only to franchises granted or renewed on or after January 1, 1981, or to franchises of an indefinite duration that may be terminated by the franchisee or franchisor without cause.

(b) The amendments to this chapter made by the act adding this subdivision shall apply only to franchise agreements entered into or renewed on or after January 1, 2016, or to franchises of an indefinite duration that may be terminated by the franchisee or franchisor without cause.

(c) The amendments to this chapter made by the act adding this subdivision shall apply only to franchise agreements entered into, amended, or renewed on or after January 1, 2023, or to franchises of an indefinite duration that may be terminated by the franchisee or franchisor without cause, except that a franchise agreement amended after January 1, 2023, shall not be subject to the amendments to this chapter made by the act adding this subdivision if the amendment to the franchise agreement was initiated by the franchisee and did not substantially and adversely impact the franchisee’s rights, benefits, privileges, duties, obligations, or responsibilities under the franchise agreement.

franchises franchise agreements indefinite duration

Section § 20042

This law states that the rules in this chapter don't apply to certain vehicle franchises. Those franchises are covered by another specific section of the Vehicle Code, which has its own set of rules and solutions for any issues that might come up.

The provisions of this chapter shall not apply to franchises governed by the provisions of Article 4 (commencing with Section 3060) of Chapter 6 of Division 2 of the Vehicle Code which contain the sole remedies for the matters contained therein.

vehicle franchises Article 4 Chapter 6

Section § 20043

This law says that if any part of this chapter is found to be invalid or can't be applied to someone or a situation, it doesn't affect the rest of the chapter. The valid parts can still be enforced separately. This is called 'severability,' meaning the chapter's sections can stand on their own.

If any provision of this chapter or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the chapter which can be given effect without the invalid provision or application, and to this end the provisions of the chapter are severable.

severability invalid provisions application to persons

Section § 20044

If there's a state or federal emergency, a franchisor can't change the franchise agreement or demand a general release in return for offering help.

A franchisor is prohibited from modifying a franchise agreement, or requiring a general release, in exchange for any assistance related to a declared state or federal emergency.

franchisor franchise agreement general release