Business Law

Opinion No. 73 / 43F

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State of California Department of Corporations

Brian R. Van Camp, Commissioner 
In reply refer to: File No. _____

This letter is not an Interpretive Opinion for the reasons stated below.

Mr. Colin C. Kelley
Attorney at Law
66 Jackson London Square
Oakland, CA 94607

Dear Mr. Kelley:

The request for an interpretive opinion, contained in your letter dated October 19, 1973, has been considered by the Commissioner. Your letter raises the question whether the agreement entered into on May 9, 1973, between Stork Bonds Distributing Company Inc. of Portland, Oregon (“Stork”) , a corporation wholly owned by Marvin H. Skidmore and Edith G. Skidmore, his wife, and a party identified by you only as the “licensee”, under the circumstances described by you, constituted a “franchise” within the definition of Section 35008, so as to be subject to the provisions of the Franchise Investment Law.

You have represented that the parties are in dispute concerning the aforementioned agreement, and that the licensee is threatening litigation, contending that the agreement does constitute a franchise offered and sold to him by Stork in violation of the Law.

Under the circumstances, it is unnecessary to recite the additional factual details which you have furnished us concerning the agreement and the relationship of the parties thereto, as it would not be appropriate for us to prejudge by an interpretive opinion a controversy concerning an agreement heretofore entered into and concerning which the parties are in dispute.

As appears from the Commissioner’s Release No. 2-F, interpretive opinions pursuant to Section 31510 of the Franchise Investment Law are issued by the Commissioner for the principal purpose of providing a procedure by which members of the public can protect themselves against liability for acts done or omitted in good faith in reliance upon the administrative determination made by the Commissioner in the opinion. Since there can be no such reliance where, as in the instant case, the agreement already has been entered into, issuance of an interpretive opinion is not appropriate.

For that reason, we must decline to express an opinion concerning the question submitted with your letter.

Dated: San Francisco, California
November 12, 1973

By order of 
Commissioner of Corporations

By __________________ 
Assistant Commissioner 
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