Franchising is not only known as a great way to expand businesses and generate financial returns, but the process can offer numerous advantages, including passive income and faster expansion. However, in New York, before an individual can start the franchising process, they will need to ensure that the state’s franchise registration requirements are met.
Franchise Laws in New York
In New York, if you want to sell or offer a franchise, you must register the Franchise Disclosure Document (FDD) with the Investor Protection Bureau of the New York Attorney General. For the initial registration, there will be a fee of $750. For renewal applications, there will be a fee of $150.
In New York, What Is Considered a Franchise?
There is a broad definition of the term “franchise” in New York, which means that there are some organizations or entities that are franchises in New York but may not be deemed franchises in other states.
According to the New York Franchise Sales Act, a franchise is an agreement where a franchisee is granted the right to sell, offer, or distribute services or goods under a marketing system dictated by a franchisor, and the franchisee is required to pay a fee. This description also includes agreements where the franchisee pays a fee and is granted the right to distribute, sell, or offer services or goods linked to the franchisor’s service mark, symbol, or trademark.
Consequently, companies that enter into specific distribution or licensing agreements will likely be deemed a franchise in New York, even if they do not consider themselves a franchise. However, for further information regarding whether a business is viewed as a franchise, contact an experienced franchise attorney today to review this definition more thoroughly.
Renewing Your Registration: Do You Need To Do It Often?
Individuals must renew their franchise registration annually, pay a $150 fee, and submit a renewal application within 120 days from the end of the fiscal year. If this renewal is not submitted on time, there may be penalties, and a new initial registration application may need to be filed.
How Long Will It Take To Register a Franchise?
The length of time it will take to register a franchise will depend on the circumstances. In some instances, it can take a few weeks. In other situations, it can take months. That is why franchisors planning to enter a new market must consider these timelines and adjust them to avoid unpleasant surprises. Working with an experienced franchise attorney can provide you with a better grasp of these timelines and what they can mean for your company.
Contact FortmanSpann Today To Learn More About New York Franchise Registration Requirements
The law firm of FortmanSpann has extensive experience in franchise and trademark law. Our skilled franchise lawyers not only have a nationwide presence, but we also represent franchisees in a wide range of legal matters, including breach of contract, fraud, violations of franchise disclosure documents (FDDs), encroachment, as well as purchases, renewals, sales, and transfers.
If you need further information regarding franchise registration requirements in New York, contact FortmanSpann today and speak with a member of our legal team.