Current through Register Vol. 45, No. 52, December 27, 2023
(a)
Completion of application.
An application for registration of the prospectus shall
include the following:
(1) facing
page, employing form (UFRA-A);
(2)
supplemental information page(s) which shall contain a statement as to each
franchise salesman employed by the franchisor containing the information as to
his identity and litigation history called for by section
200.4(c)(2) and
(3) of this Part;
(3) certification of application
(UFRA-C);
(4) sales agent
disclosure form (UFRA-E); and
(5)
two copies of the proposed offering prospectus or offering circular.
The following shall be attached to the application:
(6) one copy of the proposed
offering prospectus or offering circular;
(7) two copies of any advertising to be used
in connection with the offer or sale of franchises;
(8) a consent to service of process (UFRA-D);
and
(9) form of guarantee of
performance (UFRA-F).
(b)
Disclosure.
Each disclosure item should be commented upon by use of a
statement which fully incorporates the information required by the item, or
which states why such information is not or cannot be furnished.
(c)
Subfranchisors.
When the person filing the application for registration is a
subfranchisor, the application shall also include the same information
concerning the subfranchisor as is required from the franchisor; the
franchisor, as well as the subfranchisor, shall execute a signature
page.
(d)
Signing of
application.
The application shall be signed by the chief executive
officer or a general partner of the applicant; however, it may be signed by
another person holding a power of attorney for such purposes so long as the
agent has a personal knowledge of the information contained in the application
and prospectus. If signed on behalf of the applicant pursuant to a power of
attorney, the application shall include as an exhibit a copy of an authorizing
corporate or partnership resolution. The applicant or agent shall attest that:
the information contained in the application and the prospectus or offering
circular is true; that there are no material omissions or misrepresentations
contained therein; and that material information which shall thereafter emerge
shall be promptly disclosed by amendment, pursuant to section
200.5 of this Part.
(e)
Manually signed consent
of accountant.
All applications shall be accompanied by a manually signed
consent, or a photocopy of the consent, of the independent public accountant to
the use of his audited financial statements as such statements appear in the
offering prospectus.
(f)
Application to amend the registration.
An amendment to an application filed after the effective date
of registration shall consist of the following:
(1) facing page employing form (UFRA-A) and
containing the number of the amendment;
(2) certification of application (UFRA-C);
and
(3) two copies of the
prospectus, as amended, one copy red-lined to show the amendment being
made.
(h)
Applications and forms shall be filed with, and documents, correspondence and
other materials shall be mailed or delivered to, the Bureau of Investor
Protection and Securities, New York State Department of Law, 28 Liberty Street,
New York, NY 10005.
(i)
Department action.
(1) The
department shall, not later than 30 days after the submission for filing of a
franchise prospectus or not later than 15 days after the submission for filing
of an amendment to the prospectus, issue a letter stating that the prospectus
or amendment has been accepted for filing, or in the alternative indicating the
respect in which the application for registration, the proposed offering
prospectus or the amendment, is deficient or otherwise fails to make adequate
disclosure. In the event that the franchisor resubmits its application,
prospectus or amendment following the issuance of a deficiency letter, the
department shall, not later than 30 days following the resubmission of the
amendment, issue a letter accepting the prospectus for filing or issue a
further deficiency letter. This procedure shall be followed until the
prospectus or amendment has been accepted for filing or the franchisor has
withdrawn or abandoned its application for registration or amendment.
(2) A franchisor may offer or sell interests
in franchises or advertise the same notwithstanding the occurrence of an event
which would require an amendment to its prospectus, so long as an application
to amend is made as required by law and the regulations, and may continue to
offer, sell or advertise during the time that the department is acting upon its
application unless otherwise advised by the department.
(3) A franchisor making an offer, selling or
advertising following the occurrence of an event requiring an amendment shall
advise its offeree, in writing, at the time it supplies the offeree with its
registered prospectus, that an event requiring amendment has occurred and that
an amendment application has been submitted, or will be submitted to the
department within 10 business days of such event, and shall supply its offeree
with a copy of its amended prospectus when it has been accepted for filing and
registered by the department. Any funds paid by the offeree to the franchisor
shall, upon their receipt, be held in trust in a separate bank account and
shall remain in trust from that time until 10 business days following the date
on which the offeree is supplied a copy of the registered amended prospectus.
Prior to receipt by the offeree of the registered amended prospectus or within
10 business days following its receipt of the registered amended prospectus,
the offeree may rescind the sale and if it does, the franchisor shall pay the
trust funds to the offeree forthwith. If the offeree does not rescind either
prior to receipt of the registered amended prospectus, or during the 10-day
period following receipt of registered amended prospectus, then its acceptance
shall remain in force and the funds shall be released from trust and their
disposition shall be subject to the agreement made between the franchisor and
offeree. If the department refuses to register the amended prospectus, then the
franchisor shall, upon such refusal, immediately pay the trust funds to the
offeree.
Amended
New
York State Register July 3, 2018/Volume XL, Issue 27, eff.
7/3/2018