What are the reporting obligations of franchisors?

In California, franchisors are legally obligated to report certain information to the state’s Franchise Tax Board. This includes the filing of an initial registration, known as a “Franchise Tax Board Form SI-100” for all new franchises opened in the state. The form requires that the franchisor includes information about their business structure, such as the names of all officers and directors of the parent company, the names of any subsidiaries, the type of business entity, and the names of the states in which they are registered and qualified to do business. Franchisors must also file a “Franchise Tax Board Form FTB-800” each year. This form requires information about the total gross revenues of the franchised business, as well as deductions and credits taken by the franchisor. In addition to the annual filing, franchisors must register for a “Franchise Tax Board California Franchise Tax Number” and submit an annual “California Franchise Tax Return”. This form requires the franchisor to report information about the business’s assets, liabilities, total income, and total net income. This form must be filed along with a “Franchise Tax Board Form FTB-890”, which is a government-mandated audit that must be completed each year by a certified public accountant. Thus, California franchisors have a number of reporting obligations that are necessary for a business to operate within the state. It is important that franchisors comply with these obligations in order to remain in legal compliance. Failure to comply could lead to serious penalties.

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What are the reporting obligations of franchisors?

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