California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 2.6 - Franchises
Section 310.304 - Notice of Violation

Universal Citation: 10 CA Code of Regs 310.304

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

An application for approval as to form of a written notice of violation in accordance with Section 31304 of the Code shall be made in writing and may be in letter form. There shall be attached to this application as an exhibit a form of the written notice for which the Commissioner's approval is requested which should contain the following:

(a) In capital letters of not less than 10-point type the following legend, printed in contrasting color or type: "THIS NOTICE DISCLOSING VIOLATION OF THE FRANCHISE INVESTMENT LAW HAS BEEN APPROVED BY THE COMMISSIONER OF BUSINESS OVERSIGHT ONLY AS TO ITS FORM. SUCH APPROVAL DOES NOT IMPLY A FINDING BY THE COMMISSIONER THAT ANY STATEMENTS MADE HEREIN OR IN ANY ACCOMPANYING DOCUMENTS ARE TRUE OR COMPLETE AND THE COMMISSIONER MAKES NO RECOMMENDATION AS TO WHETHER OR NOT RESORT SHOULD BE HAD TO THE CIVIL REMEDIES PROVIDED IN THE FRANCHISE INVESTMENT LAW."

(b) The name and address of each party to whom the notice is to be directed. If such parties are too numerous to make the submission of separate notices convenient, such parties and their addresses may be shown upon a list attached to the application.

(c) A statement regarding the respect in which the violation under Section 31304 of the Code arose, including the following:

(1) Identification of the transaction involved, including the names of the franchiser and/or subfranchisors, the date, the particular franchise, and the nature and amount of the consideration received by the seller of the franchise.

(2) Identification of the specific section concerning which the violation occurred.

(3) An explanation of the liability of the franchiser and/or subfranchisors to the franchisee under that specific section.

(d) Such information regarding the franchiser which is material and pertinent to the franchisee, including information regarding the franchiser's management, its operations and plan of business, its financial condition and the terms of its organization. In addition, the franchisee shall be furnished.

(1) a disclosure statement, contained in a document separate from the notice of violation, pursuant to the disclosure requirement of Section 31101(c) or Section 31114, as applicable, and

(2) a statement setting forth the specific misrepresentation or omission together with the information necessary to correct such misrepresentation or omission.

(e) A statement indicating the franchisee's right of action, if any, under Section 31301 of the Code, together with the statement that no action may be brought to enforce this right of action unless brought not later than 90 days after delivery of the notice.

(f) A complete statement setting forth Section 31304 of the Code.

(g) The notice must not be subject to any condition not authorized by Section 31304 of the Code.

Because of the importance of the date of delivery of the notice, the franchiser/subfranchisor seeking to use this procedure should provide for a means of delivery which will provide a method whereby the time of receipt of the notice by the franchisee will be ascertainable. At the time the notice is submitted for approval as to form, the applicant should indicate the method of delivery of the notice that will be used.

1. New section filed 1-22-74; effective thirtieth day thereafter (Register 74, No. 4).
2. Change without regulatory effect amending subsection (a) and adding NOTE filed 8-13-2014 pursuant to section 100, title 1, California Code of Regulations (Register 2014, No. 33).

Note: Authority cited: Sections 31502, Corporations Code. Reference: Sections 31111 and 31304, Corporations Code.

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