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HomeCorporations CodeCh. 2§ 31402 Franchise Registration Enforcement Orders

§ 31402 Franchise Registration Enforcement Orders

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 31402 Franchise Registration Enforcement Orders

Key Takeaways

  • •If you want to sell a franchise (like a McDonald's or a 7-Eleven), you have to register it with the government first.
  • •If you try to sell a franchise without registering it, the government can tell you to stop.
  • •If you get told to stop, you have 60 days to ask for a meeting to explain your side. If you don't ask for a meeting in time, the order to stop becomes final and you can't fight it.
  • •The meeting must happen within 15 days after you ask for it, or the order to stop is canceled.

Example

Imagine you want to sell the rights to open a new burger joint under your brand name.

You can't just start selling those rights to people. You have to register your burger joint franchise with the government first. If you start selling without registering, the government can order you to stop. If you get this order, you have 60 days to ask for a meeting to explain why you should be allowed to sell your franchise. If you don't ask for a meeting in time, you have to stop selling and can't argue about it later.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 31402 Franchise Registration Enforcement Orders

If, in the opinion of the commissioner, the offer of any franchise is subject to registration under this law and it is being, or it has been, offered for sale without the offer first being registered, the commissioner may order the franchisor or offeror of that franchise to desist and refrain from the further offer or sale of that franchise unless and until the offer has been duly registered under this law. If, after that order has been made, a request for a hearing is filed in writing within 60 days from the date of service of the order by the person to whom the order was directed, a hearing shall be held in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all of the powers granted under that chapter. Unless that hearing is commenced within 15 business days after the request is made (or the person affected consents to a later date), the order shall be deemed rescinded. If that person fails to file a written request for a hearing within 60 days from the date of service of the order, the order shall be deemed a final order of the commissioner and shall not be subject to review by any court or agency, notwithstanding Section 31501. (Amended by Stats. 2004, Ch. 458, Sec. 8. Effective September 10, 2004. Operative January 1, 2005, by Sec. 19 of Ch. 458.)

Last verified: January 23, 2026

Key Terms

desist and refrainfinal orderhearingregistered

Related Statutes

  • § 31211 Commissioner Cease-And-Desist Orders
  • § 31406 Commissioner Citation Authority
  • § 31407 Commissioner Violation Discontinuance Orders
  • § 25215 Hearing Rights For Orders
  • § 25532 Unqualified Security Sales Orders

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 31402.
View Official Source