Effective July 1, 2025, as detailed in Assembly Bill 137 and signed into law by Governor Gavin Newsom on June 30, 2025, significant changes to the California Franchise Investment Law were enacted. The changes, administered by the California Department of Financial Protection and Innovation (“DFPI”), materially increase—nearly triple in some cases— the costs associated with registering or renewing a franchise offering in California.
Below is a summary of the updated fees under California Corporations Code Section 31500:
- Initial Franchise Registration (Section 31111): $1,865 (previously $675)
- Renewal Registration (Section 31121): $1,245 (previously $450)
- Initial Notice of Exemption (Sections 31101, 31104, 31106, 31108, 31109): $1,245 (previously $450)
- Consecutive Subsequent Notices (Sections 31101, 31104, 31106, 31108, 31109): $415 (previously $150)
- Notice of Violation (Sections 31303 or 31304): $1,865 (previously $675)
California remains a highly regulated state for franchisors, and this material increase in fees only adds to the regulatory pain associated with doing business there.
That being said, California has 39,000,000 residents, and therefore, it may be worth the increased expense to continue offering franchises there.
If you have any questions about these new fees or franchising in general, please feel free to reach out directly to our Franchising and Distribution Team.
about our attorney
Joshua Becker is a shareholder and forward-thinking adviser who anticipates how to best position his clients relative to regulatory changes, evolving market conditions, and the competitive landscape. Josh's proactive approach to problem-solving adds real value for the clients he serves.
He brings 18 years of experience in franchising and intellectual property law to clients that include companies of all sizes from a myriad of industries, among them established and fast-growth franchisors, technology development companies, service providers, and distributors.