California Corporations Code

§ 31011

CORP § 31011 Effective Jan 1, 2003Div. 5 · Title 4 · Part 1

Statute text

“Franchise fee” means any fee or charge that a franchisee or subfranchisor is required to pay or agrees to pay for the right to enter into a business under a franchise agreement, including, but not limited to, any payment for goods and services. However, the following shall not be considered the payment of a franchise fee:

(a)The purchase or agreement to purchase goods at a bona fide wholesale price if no obligation is imposed upon the purchaser to purchase or pay for a quantity of the goods in excess of that which a reasonable businessperson normally would purchase by way of a starting inventory or supply or to maintain a going inventory or supply.

(b)The payment of a reasonable service charge to the issuer of a credit card by an establishment accepting or honoring that credit card.

…

Legislative history

Amended by Stats. 2002, Ch. 664, Sec. 54. Effective January 1, 2003.