In 1970, the California Legislature enacted one of the first franchise disclosure laws in the country. The Franchise Investment Law generally requires franchisors to register with the Department before offering and selling franchises in California.
The Franchise Investment Law also requires that registration disclosure documents and final franchise agreements be provided to prospective franchisees at least ten business days before the sale of a franchise. The purpose of the pre-sale disclosure is to provide, fully and truthfully, material information about the franchisor and its franchise offering to the prospective franchise, prior to a purchase decision.
The Department of Business Oversight (DBO) provides protection to consumers and services to businesses engaged in financial transactions. The DBO regulates a variety of financial services, products and professionals. The Department oversees the operations of state-licensed financial institutions, including banks, credit unions, money transmitters, issuers of payment instruments and travelers checks, and premium finance companies. Additionally, the Department licenses and regulates a variety of financial businesses, including securities brokers and dealers, investment advisers, deferred deposit transactions (commonly known as payday loans) and certain fiduciaries and lenders. The Department also regulates the offer and sale of securities, franchises and off-exchange commodities. For the complete list, see the Department’s page about Licensees and Regulated Industries.
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