§ 31105 Out-Of-State Franchise Exemption

Corporations Code·California

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Key Takeaways

•If a franchise is sold to someone who lives outside California, some rules don’t apply.
•This only works if the franchise does all its business outside California.
•The rule is about where the franchise works, not where the owner lives.

Example

A person in New York buys a fast-food franchise that only has restaurants in Texas.

California’s franchise rules don’t apply because the business is entirely in Texas, even though the buyer is in New York.

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

Official Source

View on CA.gov

§ 31105 Out-Of-State Franchise Exemption

Any offer, sale, or other transfer of a franchise, or any interest in a franchise, to a resident of another state or any territory or foreign country, shall be exempted from the provisions of Chapter 2 (commencing with Section 31110) of this part, if all locations from which sales, leases or other transactions between the franchised business and its customers are made, or goods or services are distributed, are physically located outside this state. (Added by Stats. 1996, Ch. 477, Sec. 4. Effective January 1, 1997.)

Last verified: January 23, 2026

Key Terms

franchise exempt Chapter 2 physically located outside this state

References

Official text at leginfo.legislature.ca.gov
California Legislature. Corporations Code. Section 31105.

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Key Takeaways

Example

Key Terms

Related Statutes

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