Legal Question in Business Law in California

Selling franchise in California

I have someone very interested in wanting a franchise of my concept in California. I am in Illinois. We have a FTC compliant UFOC, but are not registered in California yet.

I am afraid I will lose the interest of this potential franchisee due to the time it takes to get registered in California. I am sure it's a lengthy process, like in all the other 13 states. I also do not want to waste lots of time and money on registration in California if this person ends up walking away.

Is there any way to get a commitment without having to wait to register? Or is there any way to I can sell a franchise before it's approved by the state? Or any other methods I can expedite or sell this franchise faster? Or is registering and waiting for approval the only option I have?

Thank you


Asked on 2/05/08, 7:22 pm

1 Answer from Attorneys
Terry A. Nelson Nelson & Lawless

Re: Selling franchise in California

You can't sell before approval, but you should be able to have the buyer enter a a 'letter of intent' conditioned upon approval. No money should change hands. If they're serious about the product/concept value, and understand the time frame, they should be willing to do so. If you need legal help, feel free to contact me.

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Answered on 2/06/08, 12:32 pm


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