New York State Franchise Registration
New York is one of the most famous and vibrant cities globally, with fancy, exclusive shops, flashy Broadway performances, and high-flying business tycoons. Aside from being a place where people from all over the world come to visit, the State prides itself in being an international hub of finance, diplomacy, trade, and culture. With a population of 19.45 million people, it is ranked one of the most populous states in the United States and its metropolitan area (New York, NY), one of the most populous cities in the world. Setting up shop for a franchise in New York is an excellent choice, mainly because of the diversified economy, IT, transportation, and other critical attractions for significant businesses.
New York is among the franchise registration states, meaning before any offering or selling of a franchise in the state, you must file and register your Franchise Disclosure Documents (FDD) with the Investor Protection Bureau of the New York Attorney General. Unlike other states with a lenient filing fee, the state has a $750 filing fee and a $150 annual renewal fee, which is done within 120 days after the fiscal year. Renewal fee, however, can be paid early in case there is a material change in the disclosures contained in the Franchise Disclosure Document.
The state differs from the other Franchise Registration States by applying an expansive application of its registration laws and franchisors based in New York. What this means is, whether you maintain your corporate offices within the state or you are incorporated in New York, your FDD needs to be registered in New York even if you intend to sell franchises in other states.
When registering for New York FDD, you are required to have audited financial statements, especially for start-up franchisors who usually have an unaudited opening balance sheet. Most states recognize the FDD audited financial statement phase-in process, which is allowed under the Federal Franchise Laws.
However, New York only enables start-up franchisors who are new to franchising to include an audited balance sheet in their initial FDD and registration. Once this is done, annual renewal requires the inclusion of audited financial statements for three consecutive years. These statements include “statement of stakeholders,” “statement of operations (profit and loss statements),” and “statement of cash flows.”
Unlike other franchise registration states, the state of New York state doesn’t impose financial assurance requirements. However, if the franchise statements presented have insufficient shareholders working capital or equity, New York will require the inclusion of risk factors on the state cover page rather than imposing financial assurance requirements like deferral of the initial franchise fee.
Learn more about the New York Franchise Regulations and the state’s franchise law, and the required information like; franchise registration application, denial, annual report, suspension, market regulations, annual report requirements, and more.
For more information on how to register your franchise in (New York State), visit the Franchise Marketing Systems site: https://www.fmsfranchise.com/learn/resources/state-guidelines/