What is New York's "Isolated Sole" Franchise Registration Exemption?

A: The "Isolated Sales" exemption refers to a limited exemption to New York's Franchise FDD "Registration" mandate. This exemption applies to a franchisors obligation to "register" its FDD with the state but does not relieve a franchisor of its obligation to disclose and deliver a current FDD to prospective franchisees in accordance with New York's franchise laws.

The isolated sales exemption is a limited exemption that applies to the sale of a "single" franchise that is accomplished "pursuant to an offer directed by the franchisor to not more than two persons". Franchise sales involving - directly or indirectly - brokers or a commissioned sales person do not qualify for this exemption.

Prior to relying on the "isolated sales exemption" it is important to speak with your franchise lawyer.

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