Brar

I. BACKGROUND

The complaint filed by the licensees alleges the following: In November 2018, Sukhdev Singh entered into a purported licensing agreement with Sourdough to use certain trademarks and trade secret recipes for the operation of a fast-casual sandwich shop. In March 2019, Singh, Amanpreet Toor, Gurpreet Brar, and Harman Brar entered into another purported licensing agreement with Sourdough for the operation of additional sandwich shops. These individuals subsequently assigned their rights under these agreements to Arvinbrar, Inc. Arvinbrar paid approximately five percent of gross sales to Sourdough. In June 2020, the licensees notified Sourdough that they were rescinding the agreements and considered them unenforceable. In July 2021, the licensees filed the underlying action alleging numerous causes of action against Sourdough. As relevant to this appeal, the licensees alleged Sourdough violated the Franchise Investment Law (Corp. Code, § 31000 et seq.) by selling unregistered franchises. The licensees alleged that though the agreements were not called franchise agreements, the transactions met the elements of a franchise under Corporations Code section 31005, and…