A Franchisor Exempt From the New York Franchise Act's Registration Requirement Is Also Exempt From the Act's Disclosure Mandate. Citing this author's McKinney's New York Statutes' Practice Commentary and confirming its propriety, the U.S. District Court for the Eastern District of New York ruled that a franchisor exempt from the New York Franchise Act's registration requirement need not comply with the Act's disclosure mandate by furnishing a Franchise Disclosure Document to prospective franchisees.

In Arizona Family Florists v. 1-800-Flowers.com, 2021 WL 4959426 (E.D.N.Y. 2021), plaintiff-franchisees sought summary judgment on the New York Franchise Act claim that defendant 1-800-Flowers.com violated the New York Franchise Act by failing to furnish them with a Franchise Disclosure Document. Their key argument is that even if 1-800-Flowers.com was exempt from registration, §683(8) of the Act still required 1-800-Flowers.com to furnish them with the Franchise Disclosure Document mandated by §683(2) of the Act (it was undisputed that the franchisor did not do so).

The court quoted §684(3) of the Act—the exemption afforded to "large net worth franchisors"—and rejected the plaintiff-franchisees' contention that because 1-800-Flowers.com earlier had registered its franchise offering with the Attorney General, it could not now claim an exemption. "This argument is meritless," held the court. "The statute does not state that registration precludes the defendant from subsequently invoking this exemption provision …."