What is New York's "Isolated Sale" Franchise Registration Exemption?
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 to ensure you are following proper compliance standards for both federal and state laws.
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