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A 10378

Exempts the offer of sale of franchises from registration requirements

2025 Regular Session Introduced by Anil Beephan

Exempts out-of-state franchise offers that won’t operate in New York from registration, while still requiring compliance with applicable federal and state laws.

REFERRED TO ECONOMIC DEVELOPMENT
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Bill Summary · A 10378

Overview

  • Bill: A 10378 (2025-2026) – New York
  • Jurisdiction: New York
  • Introduced by: Assembly Member Anil Beephan
  • Committee: Economic Development
  • Date Introduced: March 3, 2026
  • Status: Referred to Economic Development

Purpose and intent

  • The bill amends the General Business Law to create an exemption from registration for certain franchise offers.
  • Specifically, it would allow a franchisor to offer or sell a franchise to a person who resides in another state and who will not operate the franchise in New York, provided the franchisor complies with applicable federal and state requirements for such offers or sales.

Key provisions

  • New provision added to General Business Law, subdivision 3, paragraph (e):
    • An offer or sale of a franchise by a franchisor is exempt from New York registration requirements if:
    • The prospective franchisee resides in a state other than New York, and
    • The franchise will not be operated in New York by that franchisee.
    • The franchisor must still comply in full with all relevant federal and state requirements applicable to the offer or sale of the franchise.

Who/what is affected

  • Franchisors: Potentially subject to registration requirements under existing law unless the offer falls under the new exemption.
  • Prospective franchisees: Individuals residing outside New York who would not operate the franchise within New York, for whom the registration requirement would be waived.
  • The state’s regulatory landscape for franchise offers: The exemption narrows the applicability of registration to offers made to non-New York residents who will not operate in New York.

Procedural and timeline aspects

  • Effective date: The act takes effect on the ninetieth day after it becomes law.
  • Legislative steps: As of the provided text, the bill has been referred to the Assembly Committee on Economic Development; no further actions or votes are listed.

Practical impact and considerations

  • Administrative impact: Reduces regulatory burden for franchisors when offering franchises to out-of-state residents who will not operate in New York, potentially speeding cross-border franchise sales.
  • Consumer protection considerations: The exemption applies only when the prospective franchisee will not operate the franchise in New York, but the franchisor must still meet all federal and state requirements governing franchise offers and sales, preserving core protections.
  • Scope clarification: The exemption is narrowly tailored to out-of-state offers with no New York operations, leaving in-state offers and situations where a New York operation is involved still subject to registration and related requirements.

If you’d like, I can compare this bill to current New York franchise registration rules or provide a brief assessment of potential impacts on Franchisor compliance practices.

Compiled from official sources — confirm details with the bill’s official record.

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