New York S 3643: Requires fair business practices in franchises

Bill Text

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S03643 Summary:

BILL NOS03643 

&nbsp

SAME ASNo Same As

&nbsp

SPONSORMURRAY

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COSPNSRO'MARA, RHOADS

&nbsp

MLTSPNSR

&nbsp

Add Art 33-C §§698 - 698-m, Gen Bus L

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Requires fair business practices in franchises.

Go to top S03643 Actions:

BILL NOS03643 

&nbsp

01/29/2025REFERRED TO CONSUMER PROTECTION

01/07/2026REFERRED TO CONSUMER PROTECTION

Go to topS03643 Committee&nbspVotes:

Go to topS03643 Floor&nbspVotes:

There are no Assembly votes for this bill in this legislative session.

Go to topS03643 Text:

 STATE OF NEW YORK
 ________________________________________________________________________

 3643

 2025-2026 Regular Sessions

 IN SENATE

 January 29, 2025
 ___________

 Introduced by Sens. MURRAY, O'MARA, RHOADS -- read twice and ordered
 printed, and when printed to be committed to the Committee on Consumer
 Protection

 AN ACT to amend the general business law, in relation to requiring fair
 business practices in franchises

 The People of the State of New York, represented in Senate and Assem-
 bly, do enact as follows:

 1 Section 1. The general business law is amended by adding a new article
 2 33-C to read as follows:
 3 ARTICLE 33-C
 4 FAIR FRANCHISING PRACTICES ACT
 5 Section 698. Short title.
 6 698-a. Definitions.
 7 698-b. Procedural fairness.
 8 698-c. Private right of action.
 9 698-d. Duty of good faith.
 10 698-e. Duty of competence.
 11 698-f. Negotiated changes permitted.
 12 698-g. Independent sourcing.
 13 698-h. Termination and non-renewal.
 14 698-i. Transfer of a franchise.
 15 698-j. Anti-competitive covenants.
 16 698-k. Freedom of association.
 17 698-l. Encroachment.
 18 698-m. Discrimination prohibited.
 19 § 698. Short title. This article shall be known and may be cited as
 20 the "fair franchising practices act".
 21 § 698-a. Definitions. As used in this article:
 22 1. "Affiliate" shall mean any natural or legal person controlling,
 23 controlled by or under common control with a franchisor.

 EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD07533-01-5

 S. 3643 2

 1 2. "Franchise" shall mean a contract or agreement, whether expressed
 2 or implied, and whether written or oral, between two or more persons by
 3 which:
 4 (a) a franchisee is granted the right to engage in the business of
 5 offering, selling or distributing goods or services pursuant to a
 6 marketing plan or system prescribed in substantial part by a franchisor;
 7 (b) operation of the franchisee's business pursuant to such plan or
 8 system is substantially related to the franchisor's trademark, service
 9 mark, trade name, logotype, advertising or other commercial symbol
 10 designating the franchisor or its affiliate; and
 11 (c) the franchisee pays or is required to pay, directly or indirectly,
 12 a franchise fee.
 13 3. "Franchise fee" shall mean a fee or charge for the right to enter
 14 into or maintain a franchise, including any payment for goods or
 15 services, but not including:
 16 (a) payment, at a bona fide wholesale price, for a reasonable quantity
 17 of inventory;
 18 (b) payment of a reasonable service charge to the issuer of a credit
 19 or debit card by a person accepting or honoring such a card; and
 20 (c) payment at fair market value for a reasonable quantity of real
 21 estate, fixtures, equipment or other tangible personal property to be
 22 utilized in and necessary for the operation of a franchised business.
 23 4. "Franchisee" shall mean a person to whom a franchise is granted.
 24 5. "Franchisor" shall mean a person who grants or has granted a fran-
 25 chise.
 26 6. "Good cause" shall mean the failure by a party to a franchise to
 27 correct a default of a material provision of the franchise within thirty
 28 days of receipt of a written notice from the other party which specifies
 29 the default, or within forty-eight hours of receipt of a written notice
 30 which specifies a default constituting a clear and present danger to the
 31 public health, welfare or safety, and in either instance describes the
 32 corrective action required to be taken. Such term shall also include the
 33 complete withdrawal of the franchisor from conducting business in this
 34 state.
 35 7. "Good faith" shall mean honesty in fact and the observance of
 36 reasonable