This part of the law is called the 'Franchise Investment Law,' and when it mentions 'this law,' it's talking about the rules within this part.

This law highlights the challenges that have emerged with the growth of franchise businesses in California. It recognizes that previously, franchise sales weren't well-regulated, causing financial losses for franchisees due to incomplete or misleading information from franchisors. The purpose of this law is to ensure franchisees receive all necessary information to make informed decisions, prevent fraudulent franchise sales, and foster a clear understanding between franchisors and franchisees.

This law is all about making sure franchise applications are reviewed efficiently and effectively. The goal is for the commissioner to use a process that focuses on identifying risks to potential franchise owners. This involves closely examining any concerns about the franchisor's financial health, past compliance issues, and major problems in their application. The commissioner also wants to prevent any misuse or false representation related to franchise offers or sales. To do this well, they'll use guidelines from the North American Securities Administrators Association as part of their review process. These procedures are considered part of internal management guidelines.

This section is saying that the definitions provided in this part of the law are used consistently across this entire division unless a different context makes them unsuitable.

This law defines what an 'advertisement' is within the context of selling a franchise. It includes any message that’s written, printed, spoken on the radio or TV, or even recorded telephone messages, if it's used to promote or sell a franchise.

This law defines "business days" as any day that isn't a Saturday, Sunday, or a recognized holiday according to the Government Code.

In this context, the term 'Commissioner' refers to the person in charge of overseeing financial protection and fostering innovation.

This law defines what a "franchise" is. In general, it's a business relationship where someone (the franchisee) gets the rights to sell goods or services using the brand and guidelines of another company (the franchisor), often requiring payment of a fee. Specifically, it includes agreements between petroleum companies and gasoline dealers that allow the use of a brand or trademark in selling fuel. However, certain nonprofit cooperatives, where members control and own substantially equally and are not personally liable, don't count as franchises. Lastly, if such a nonprofit misleads someone into joining, they can be sued for damages.

This California law section defines specific terms related to franchises that involve fuel, such as gasoline and diesel. It explains who is considered a "franchisor" and "franchisee" in this context, focusing on petroleum retailers and distributors authorized to use trademarks. It also clarifies what is meant by terms like "refiner," "petroleum distributor," "petroleum retailer," "marketing premises," "leased marketing premises," "contract," "trademark," "fuel," "affiliate," and "petroleum corporation." These definitions are important for understanding agreements involving the sale, consignment, or distribution of fuel under a franchise relationship.

This law defines a 'franchisee' as the person or entity who receives the rights to operate a business under the franchise agreement.

A "franchisor" is simply someone who gives out a franchise to another person.

An 'area franchise' is a deal where one party (the franchisee) gets permission from another party (the franchisor) to run multiple business locations in a certain region.

This law defines a 'subfranchise' as an agreement between a franchisor and a subfranchisor that allows the subfranchisor to sell or negotiate franchise sales for the franchisor in exchange for payment. However, if a person only receives compensation for making referrals or acting as a sales representative, that agreement is not considered a subfranchise.

A subfranchisor is someone who receives the right to operate or manage a subfranchise.

In this law, whenever the term 'franchise' is mentioned, it also covers 'area franchises' and 'subfranchises' unless it's clearly stated otherwise.

This law defines what counts as a 'franchise fee'. Essentially, any charge that a franchisee pays to enter into a franchise business falls under this category, including payments for goods and services. However, there are exceptions: buying goods at true wholesale prices without undue obligations, reasonable credit card service charges to card issuers, and certain payments related to trading stamps aren't considered franchise fees.

This section clarifies that the terms “fraud” and “deceit” have a broader meaning than just what is traditionally recognized in common law. They encompass more than traditional definitions.

This section defines when a franchise offer or sale is considered to be made in California. It happens if the offer is made or accepted here, or if the business will operate in California. An offer counts as made here if it starts here or is directed into the state. Acceptance is counted here if the response is sent to someone believed to be in California. However, offers aren't considered made in California just because they're in newspapers primarily circulated outside the state, or broadcasted on radio/TV programs from elsewhere.

This law defines an "order" as any official decision or directive given by the commissioner that applies to a particular case. It includes things like giving permission, setting conditions, forbidding actions, or stating requirements.

This section defines 'person' to include not just individuals, but also a variety of entities like corporations, partnerships, LLCs, joint ventures, associations, joint stock companies, trusts, and unincorporated organizations.

This section defines "publish" as the act of making information available to the public through methods like newspapers, mail, radio, TV, or any other way of spreading it widely.

This section defines a "Rule" as any public regulation or standard that the commissioner issues and applies broadly to everyone.

This section defines what it means to 'sell' or 'offer to sell' a franchise. Selling involves any agreement to sell or transfer a franchise for money. Offering to sell includes attempts to sell or trying to find a buyer. The renewal or extension of an existing franchise without disrupting business doesn't count as a 'sale,' unless there's a major change to the franchise terms.

This section defines the term "State" to include all the states in the U.S., as well as any territories, possessions, the District of Columbia, and Puerto Rico.

This law defines what a 'franchise broker' is and specifies who is not considered a franchise broker. Essentially, a franchise broker is someone who sells or offers franchises and gets paid for it, either directly or indirectly. However, franchisors, subfranchisors, their employees, and certain other roles are not considered franchise brokers under this definition.