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:
- That the existing franchisee buyer has actively operated a franchise of the selling franchisor for the eighteen months preceding the offer; and
- That the existing franchisee purchases the franchise in order to operate the business and not for the purpose of resale; and
- 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.
- Take Your Business from Local Success to National Franchise with The 90 Day Franchise Launch Program
- An Entrepreneurs Guide to Purchasing a Business or Franchise
- ENDWISE: The Guide to Selling Your Business with Peace of Mind
- The New York and New Jersey Partnership Dispute Guide
- Franchise Counsel Program