Securing franchise registration from the New York Attorney General pursuant to the New York Franchise Act (unless an exemption is available) is the keystone of a franchisor’s ability to legally engage in franchise sales activity in this state.
What does registration accomplish? In simple terms, it gives a business a license to sell franchises. A failure to register under the New York Franchise Act (again, unless an exemption therefrom is available) means that franchises cannot legally be offered or sold in this state. Recall that under the New York Franchise Act, illegal offers or sales of franchisesthat is, those made in the absence of any registration where registration is required under the actgive rise to stiff civil and even criminal penalties on the part of both the franchisor itself and all persons and companies who control that franchisor and were involved in the violative conduct, including the franchising company’s officers and directors who knowingly and actively participated in the violation.
