DFPI Penalizes California Franchise, The Kickin’ Crab, for Misleading Small Business Entrepreneurs
What You Need to Know: California fines franchise company for deceiving small business owners; the latest to face DFPI action after misleading investors.
SACRAMENTO – The California Department of Financial Protection and Innovation (DFPI) today announced it penalized The Kickin’ Crab, LLC and The Kickin’ Crab, Inc. for violating the California Franchise Investment Law (FIL) and misleading small business entrepreneurs. It is the latest in a series of enforcement actions DFPI has taken against franchise companies violating the law, underscoring the Department’s ongoing commitment to consumer protection and greater transparency for California’s small businesses. DFPI ordered The Kickin’ Crab to cease its wrongful acts, pay $120,000 in penalties, and complete specialized remedial training on California franchise law.
The Kickin’ Crab is a California‑based franchised restaurant chain. Individual entrepreneurs contract with the company to operate locations in exchange for licensing fees and other revenue.
Between 2012 and 2025, the company sold at least 16 franchises to California small business investors without providing important disclosure documents containing information about fees, royalties, and litigation history — a violation of California’s franchise law. The company also failed to register its franchise offerings with the DFPI, a further violation of the law. The violations, listed in the consent order, were discovered during a regulatory compliance examination in April 2026.
“Companies must be transparent and truthful or face the consequences,” said DFPI Commissioner KC Mohseni. “No one would buy a car or a house without the proper legal disclosures, and small business owners deserve the same protection when considering a franchise investment. Ensuring that Californians receive clear, accurate, and complete information is essential to maintaining fair and lawful markets. The DFPI will continue to safeguard small businesses and hold companies accountable when they violate the law.”
Franchise investments often involve significant financial commitments from small business owners — sometimes their entire life savings. The California Franchise Investment Law requires franchisors to be transparent about their operations and track record. Failure to do so can deceive franchise buyers, withholding critical information necessary to make an informed investment decision.
As part of California’s enforcement action, The Kickin’ Crab must cease all violations of the FIL and complete specialized remedial training on California franchise law. If The Kickin’ Crab fails to comply with the order, the DFPI can revoke its registration under California law.
Last month, the DFPI announced it fined Texas-based Dickey’s Barbeque Restaurant for concealing the number of its locations that had ceased operating. This underreporting grossly misrepresented the success of the business model and misled small business owners.
The DFPI has oversight of the franchise market to ensure small business owners are not improperly deceived or coerced. As part of this effort, DFPI expects to develop additional guidance and assess whether existing rules should be updated, and future enforcement actions may include remedies that directly assist small business owners harmed by unlawful practices. This work is particularly important given the slowdown in federal enforcement of franchise protections.
The DFPI accepts complaints from operators of franchised businesses about problems in franchise markets.
The Department of Financial Protection and Innovation protects consumers, regulates financial services, and fosters responsible innovation. DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower Californians to access a fair and equitable financial marketplace through education and by preventing potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.
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