What are the laws governing the sale of a franchise?

In New York, the sale of a franchise is regulated by the Franchising Business Law. This law protects potential franchisees from unfair practices that may be used in the sale process, such as false or misleading information. It also sets out certain requirements that must be met by both franchisors and franchisees. The law requires franchisors to provide a disclosure document that contains information about the business, including the names and contact information for all officers and directors of the franchisor, a description of the goods and services offered by the franchisor, the total initial investment, and the nature and duration of the franchise agreement. This document must be provided to a potential franchisee at least fourteen days before they enter into any franchise agreement. The franchisor must also ensure that all oral and written representations they make about the business are accurate and not misleading. Additionally, the franchisor must provide the franchisee with a copy of any contracts or other legal documents that they will sign as part of the franchise agreement. The Franchising Business Law also requires franchisors to provide pre-sale disclosure documents and ongoing financial and operational support to their franchisees. Additionally, it prohibits franchisors from making certain changes in the franchise agreement without the franchisee’s consent. Finally, it requires the franchisor to maintain certain records regarding the franchise, such as financial statements, and provide the franchisee with access to such records upon request.

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What are the laws governing the sale of a franchise?

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