If you are thinking about entering into a franchise agreement in New York, please consider these New York Franchise Warning Signs. All of the laws in New York that are intended to protect potential investors in franchises are not meant to act as a substitute for good business sense, so be aware of these common red flags, do your due diligence and hire a New York franchise lawyer to assist in the negotiation and evaluation of the franchise opportunity. Failure to Disclose Legally Necessary Details to Franchisees Under New York law, no offer or sale of a franchise can take place until the franchisor has registered franchise disclosure documents (FDD) with the state of New York. Sometimes called a prospectus, the FDD contains 20+ different items of information about the franchise including the the history of the fanchisor, required fees and investment costs – among other things.If you do not receive
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Definition of a Franchise in New York State: New York Franchise Law Basics
New York has a broad definition of a franchise, thus, leading to a broad range of mere “licensing” and “agent/distributor” relationships as franchises. Any business organization that is deemed or may be deemed a franchise by the State of New York should, immediately, retain a New York-based franchise attorney with significant experience in the business and legal side of franchising in NY. A designation of a business relationship as a franchise, immediately, requires obligations of the franchisor including disclosure and registration requirements. Our New York franchise lawyers shall be writing followup articles on franchise obligations under New York law over the next few weeks. Definition of a Franchise in New York Section 608 of the New York code defines a franchise in New York as: 3. “Franchise” means a contract or agreement, either expressed or implied, whether oral or written, between two or more persons by which: (a) A franchisee
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