New York State Requirements When Franchising a Business

If you plan to sell a New York franchise, the state requires that you provide a pre-sale disclosure to potential franchisees. This disclosure, which was previously known as a Uniform Franchise Offering Circular (UFOC), has been renamed and is now known as a Franchise Disclosure Document (FDD).

The FDD will disclose financial information that is required by the state, as well as some facts about your company's history. New York prohibits the sale of franchises until an FDD has been filed on public record and registered by a designated state agency. This gives franchisees the legal right to bring a private lawsuit against you for omitting or misrepresenting any information that is required in the FDD.

You are permitted to have an initial meeting with a potential franchisee without presenting the FDD, however, the FDD must be presented at least 14 calendar days prior to signing a formal contract. This gives the franchisee time to peruse your company's disclosures.

If the information provided within the FDD is acceptable to the franchisee, you may proceed to provide them with a franchise agreement, in which you will establish the terms of your business relationship.

To understand what is required in starting a New York franchise, or for help with drafting your FDD, you can get the professional help of a Manhattan business attorney.

If you are interested in franchising your business in New York, you probably have many questions about the process. To learn more about franchise laws, visit our article library. 

Answers to Your Questions About Franchise Law

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