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What Is New York's Existing Franchisee Registration Exemption?

This exemption from New York's FDD registration requirements is permitted when the franchise is being sold to one of the franchisor’s existing franchisees. This exemption applies to the franchisor’s FDD "registration" obligations, but not the franchisor’s FDD "disclosure" obligations. For this exemption to apply, some requirements include:

  1. That the existing franchisee buyer has actively operated a franchise of the selling franchisor for the eighteen months preceding the offer; and
  2. That the existing franchisee purchases the franchise in order to operate the business and not for the purpose of resale; and
  3. That the franchisor reports the sale to the department of law on the form required by the department within 15 days of the sale.

You should always be cautious when relying on franchise registration exemptions and carefully examine whether or not the exemption applies to your transaction.

Learn more about New York's franchise laws and registration requirements.

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

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