Tom Umberg
- Democratic
- Senator
- District 34
Author
Existing law, the Franchise Investment Law, generally provides for the regulation of the offer and sale of franchises and requires the Commissioner of Financial Protection and Innovation to maintain a risk-based process of reviewing franchise applications with emphasis on risks associated with the franchisor's financial condition, the franchisor's compliance record, and significant deficiencies with the franchisor's application. The law requires specific written disclosures, and authorizes the sale of a franchise to be exempt from specified requirements if the franchisor meets certain disclosure and notice requirements. Existing law makes it unlawful for a person to offer or sell any franchise unless the franchise has been registered or exempted pursuant to these provisions. This bill, contingent upon an appropriation by the Legislature, would require a franchise broker, as defined, to register with the commissioner before engaging in certain activities, including offering or selling a franchise in this state. This registration process would require the franchise broker to sign and verify a specified form, under penalty of perjury. The bill would make it unlawful for a franchise broker to offer or sell a franchise in this state unless the franchise broker is registered pursuant to these provisions. The bill would authorize the commissioner to summarily issue a stop order suspending or revoking a registration under these provisions and would prescribe a hearing process if the commissioner receives a written request for hearing from the franchise broker, as specified. The bill would impose certain recordkeeping and regulatory requirements on franchise brokers and would make various actions by franchise brokers unlawful. The bill would make these provisions operative on the later of: (1) July 1, 2026, or (2) the first anniversary of the date on which the above-described appropriation is made. Existing law makes it unlawful for any person to effect or to attempt to effect a sale of a franchise unless, among other exceptions, the person is identified in an application or amended application with the commissioner, licensed by the Department of Real Estate as a real estate broker or real estate salesperson, or licensed by the commissioner as a broker-dealer or agent pursuant to the Corporate Securities Law of 1968. This bill would add as an exception to the provisions described above a person registered as a franchise broker. Under existing law, a person who offers or sells a franchise in violation of specified provisions is liable to the franchisee or subfranchisor, who may sue for specified damages. This bill would make a franchise broker who offers or sells a franchise in violation of specified provisions liable to the franchisee or franchisor, who may sue for damages, as specified. Existing law requires the commissioner to charge and collect specified fees in connection with an application for registration for, renewal of, and amendment of, a registration of an offer of franchises, as specified, which are credited to the Financial Protection Fund. This bill would establish specified fees in connection with an application for registration or amendment of a registration as a franchise broker, and would require the commissioner to charge and collect those fees. By expanding the crime of perjury, as specified above, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.
Chaptered by Secretary of State. Chapter 518, Statutes of 2024.
Approved by the Governor.
Enrolled and presented to the Governor at 4 p.m.
Assembly amendments concurred in. (Ayes 39. Noes 0. Page 5560.) Ordered to engrossing and enrolling.
Read third time. Passed. (Ayes 75. Noes 0. Page 6547.) Ordered to the Senate.
In Senate. Concurrence in Assembly amendments pending.
Ordered to third reading.
Read third time and amended.
Read second time. Ordered to third reading.
Read second time and amended. Ordered to second reading.
From committee: Do pass as amended. (Ayes 11. Noes 0.) (August 15).
August 7 set for first hearing. Placed on suspense file.
Read second time and amended. Re-referred to Com. on APPR.
From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 11. Noes 0.) (June 25).
Read second time and amended. Re-referred to Com. on JUD.
From committee: Do pass as amended and re-refer to Com. on JUD. (Ayes 8. Noes 0.) (June 17).
In Assembly. Read first time. Held at Desk.
Read third time. Passed. (Ayes 37. Noes 1. Page 4149.) Ordered to the Assembly.
Read second time. Ordered to third reading.
Read second time and amended. Ordered to second reading.
From committee: Do pass as amended. (Ayes 7. Noes 0. Page 3964.) (May 16).
Set for hearing May 16.
May 6 hearing: Placed on APPR suspense file.
Set for hearing May 6.
From committee: Do pass and re-refer to Com. on APPR. (Ayes 11. Noes 0. Page 3724.) (April 23). Re-referred to Com. on APPR.
From committee: Do pass and re-refer to Com. on JUD. (Ayes 6. Noes 1. Page 3658.) (April 17). Re-referred to Com. on JUD.
Set for hearing April 23 in JUD. pending receipt.
Set for hearing April 17.
From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.
From printer. May be acted upon on or after February 10.
Introduced. Read first time. To Com. on RLS. for assignment. To print.
| Bill Text Versions | Format |
|---|---|
| SB919 | HTML |
| 01/10/24 - Introduced | |
| 03/14/24 - Amended Senate | |
| 05/16/24 - Amended Senate | |
| 06/19/24 - Amended Assembly | |
| 06/26/24 - Amended Assembly | |
| 08/19/24 - Amended Assembly | |
| 08/22/24 - Amended Assembly | |
| 08/30/24 - Enrolled | |
| 09/24/24 - Chaptered |
| Document | Format |
|---|---|
| 04/15/24- Senate Banking and Financial Institutions | |
| 04/19/24- Senate Judiciary | |
| 05/03/24- Senate Appropriations | |
| 05/16/24- Senate Appropriations | |
| 05/18/24- Sen. Floor Analyses | |
| 06/13/24- Assembly Banking and Finance | |
| 06/21/24- Assembly Judiciary | |
| 08/05/24- Assembly Appropriations | |
| 08/21/24- ASSEMBLY FLOOR ANALYSIS | |
| 08/23/24- ASSEMBLY FLOOR ANALYSIS | |
| 08/27/24- Sen. Floor Analyses |
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