California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2.6 - Franchises › Section 310.156.1 - Standards Relating to Advertisements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Any advertisement of a franchise should disclose fairly and
				  accurately such relevant facts concerning the franchise, the terms and
				  conditions thereof and the material rights and liabilities created thereunder
				  as are necessary to make the advertisement not misleading. Normally, an
				  advertisement should also comply with the following more specific
				  standards:
(a) An advertisement should
				not contain any statement or inference that a purchase of a franchise is a safe
				investment or that failure, loss or default is impossible or unlikely, or that
				earnings or profits are assured.
(b) Earnings Claims must conform with Item 19
				of the offering circular prescribed by the Uniform Franchise Registration
				Application, as defined in Section
				310.111(b).
(c) Any advertisement which refers to the
				registration of the franchises under the Franchise Investment Law of the State
				of California shall contain in capital letters of not less than 10-point type
				the following legend:
"THESE FRANCHISES HAVE BEEN REGISTERED UNDER THE FRANCHISE
				  INVESTMENT LAW OF THE STATE OF CALIFORNIA. SUCH REGISTRATION DOES NOT
				  CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE COMMISSIONER OF
				  BUSINESS OVERSIGHT NOR A FINDING BY THE COMMISSIONER THAT THE INFORMATION
				  PROVIDED HEREIN IS TRUE, COMPLETE AND NOT MISLEADING."
(d) An advertisement should normally contain
				the name and address of the person using the advertisement.
(e) If the advertisement contains any
				endorsement or recommendation of the franchises by any public figure, whether
				express or implied (for example, by the inclusion of such person's photograph
				or name in the advertisement), full disclosure shall be made of any
				compensation or other benefit given or promised by the franchisor or any person
				associated with the franchisor to such person, directly or indirectly. The
				disclosure required in this Subsection (e) shall be made in the same document
				containing the advertisement or, if such advertisement is presented on radio or
				television, as a part of the same program, without any intermission or other
				intervening material.
(f) Any
				advertisement which refers to an exemption from or reduction in taxation under
				any law should be based on an opinion of counsel, and the name of such counsel
				should be stated in the advertisement.
1. Amendment
				  filed 3-15-83; effective thirtieth day thereafter (Register 83, No.
				  12).
2. Amendment of subsection (b) filed 7-27-88; operative 8-26-88
				  (Register 88, No. 32).
3. Amendment of subsection (b) filed 4-6-94;
				  operative 5-6-94 (Register 94, No. 14).
4. Change without regulatory
				  effect amending subsection (c) and NOTE filed 8-13-2014 pursuant to section
				  100, title 1, California Code of
				  Regulations (Register 2014, No. 33).
Note: Authority cited: Section
					 31502,
					 Corporations Code. Reference: Sections
					 31111
					 and
					 31156,
					 Corporations Code.