SECTIONS 31150-31157 - California Statutes

CORPORATIONS CODE

SECTION 31150-31157

31150. Every franchisor or subfranchisor offering franchises for
sale in this state shall at all times keep and maintain a complete
set of books, records, and accounts of such sales.

31151. The commissioner may accept and act upon the opinions,
appraisements and reports of any engineers, appraisers, or other
experts which may be presented by an applicant or any interested
party, on any question of fact concerning or affecting the franchises
proposed to be offered and sold. In lieu of, or in addition to, such
opinions, appraisements, and reports, the commissioner may have any
or all matters concerning or affecting such franchises investigated,
appraised, passed upon and certified to him by engineers, appraisers
or other experts selected by him.

31152. Any document filed under this law or under the Corporate
Securities Law of 1968 or a predecessor statute thereto may be
incorporated by reference in a subsequent application filed under
this law if it was filed within four years prior to the filing of
such application, or is otherwise available in the files of the
commissioner, to the extent that the document is currently accurate.

31153. In any proceeding under this law, the burden of proving an
exemption or an exception from a definition is upon the person
claiming it.

31154. (a) Neither (1) the fact that an application for
registration under this law has been filed, nor (2) the fact that
such registration has become effective constitutes a finding by the
commissioner that any document filed under this law is true, complete
or not misleading. Neither any such fact nor the fact that an
exemption is available for a transaction means that the commissioner
has passed in any way upon the merits or qualifications of, or
recommended or given approval to, any person, franchise or
transaction.
(b) It is unlawful to make or cause to be made to any prospective
purchaser or offeree any representation inconsistent with subdivision
(a) of this section.

31155. Every applicant for registration of an offer to sell
franchises under this law, by other than a California corporation,
California limited partnership, or California limited liability
company, shall file with the commissioner, in such form as he or she
by rule prescribed, an irrevocable consent appointing the
commissioner or his or her successor in office to be his or her
attorney to receive service of any lawful process in any noncriminal
suit, action or proceeding against him or her or his or her
successor, executor or administrator, which arises under this law or
any rule or order hereunder after the consent has been filed, with
the same force and validity as if served personally on the person
filing the consent. A person who has filed such a consent in
connection with a previous registration under this law need not file
another. Service may be made by leaving a copy of the process in the
office of the commissioner but it is not effective unless (a) the
plaintiff, who may be the commissioner in a suit, action, or
proceeding instituted by him or her, forthwith sends notice of the
service and a copy of the process by registered or certified mail to
the defendant or respondent at his or her last address on file with
the commissioner, and (b) the plaintiff's affidavit of compliance
with this section is filed in the case on or before the return day of
the process, if any, or within such further time as the court
allows.

31156. No person shall publish in this state any advertisement
offering a franchise subject to the registration requirements of this
law unless a true copy of the advertisement has been filed in the
office of the commissioner at least three business days prior to the
first publication or such shorter period as the commissioner by rule
or order may allow, or unless such advertisement has been exempted by
rule of the commissioner.

31157. No person shall publish any advertisement concerning any
franchise in this state after the commissioner finds that the
advertisement contains any statement that is false or misleading or
omits to make any statement necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading and so notifies the person in writing. Such notification
may be given summarily without notice of hearing. At any time after
the issuance of a notification under this section, the person
desiring to use the advertisement may in writing request that the
order be rescinded. Upon the receipt of such a written request, the
matter shall be set down for hearing to commence within 15 business
days after such receipt unless the person making the request consents
to a later date. After such hearing, which shall be conducted in
accordance with the provisions of Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code, the
commissioner shall determine whether to affirm and continue or to
rescind such order, and the commissioner shall have all the powers
granted under such act.