Opinion No. 73 / 8F

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. Lawrence & Grosberg
Attorney at Law
Wolf & Dublin
9454 Wilshire Boulevard
Beverly Hills, CA 90212

Dear Mr. Grosberg:

The request for an interpretive opinion contained in your letter dated November 24, 1972, as supplemented by your letter dated December 1, 1972, has been considered by the Commissioner. Your letters raise the question whether your client, Miss A. M. Hogan, and possibly other individuals referred to as “permittees”, under agreements with Derma-vac, Inc., a California corporation (“Derma”), are “franchisees” within the meaning of Section 31006 of the Franchise Investment Law, with Derma to be regarded as “franchisor” within the meaning of Section 31007, and so as to characterize the agreements with Miss Hogan and the other permittees as “franchises” within the meaning of Section 31005 and other provisions of the Franchise Investment Law, including especially Section 31110. That Section makes it unlawful for any person to offer or sell in this state any franchise, as defined in Section 31005, unless the offer has been registered or is exempted under the Law.

Section 31510 of the Law authorizes the Commissioner, in his discretion, to honor requests of interested persons for interpretive opinion. In accordance with Section 31511, such opinions are issued 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 in the opinion. As above stated, the registration requirement of Section 31110 is imposed upon the franchisor. In the absence of a request from the franchisor it would therefore not be appropriate for the Commissioner to issue an interpretive opinion concerning the question presented by you.

If you wish to explore the possibility that a violation of the requirements of the Franchise Investment Law has occurred in connection with agreements as referred to in your letters, it is suggested that you communicate for this purpose with Robert E. La Noue, Assistant Commissioner, Division of Trading and Markets of this Department.

Dated: San Francisco, California
February 2, 1973

By order of 
BRIAN R. VAN CAMP
Commissioner of Corporations

By __________________ 
HANS A. MATTES
Assistant Commissioner 
Office of Policy