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What Is New York's Isolated Sale Franchise Registration Exemption?

New York’s isolated sale exemption is an extremely limited exemption from New York’s FDD registration requirement. It is intended to apply to a circumstance where a franchisor, for the first time and not as a result of general solicitations to offer or sell franchises in New York, intends to sell a franchise in New York to a single franchisee through an offer that is directed at "...not more than two persons." Even if this exemption applies, you must still ensure that you properly disclose the franchisee with an updated and current FDD that complies with and meets the requirements of New York law.

The isolated sales exemption is not widely understood and franchisors should be extremely careful. Compliance with this exemption is not achieved through any filing with the State of New York and is largely self-certified. You should carefully review this exemption with your attorney before relying on it, as this exemption is extremely limited in application.

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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