Does the New York amendment for City Publications address misappropriation of property?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
- C.
No such party has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the 10-year period immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging: violation of a franchise, antifraud, or securities law; fraud; embezzlement; fraudulent conversion or misappropriation of property; or unfair or deceptive practices or comparable allegations.
The following is added to the end of the "Summary" sections of Item 17(c), titled "Requirements for franchisee to renew or extend," and Item 17(m), entitled "Conditions for franchisor approval of transfer": However, to the extent required by applicable law, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provisions of General Business Law Sections 687(4) and 687(5) be satisfied.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the New York amendment addresses misappropriation of property in the context of disclosures regarding certain legal actions. Specifically, it states that no party has been convicted of a felony or misdemeanor involving fraudulent conversion or misappropriation of property within the 10 years preceding the application for registration. This disclosure relates to the background of individuals associated with the franchise offering.
Additionally, the New York amendment includes a provision to protect franchisees' rights under New York General Business Law. It states that the rights and causes of action arising from Article 33 of the General Business Law of the State of New York and its regulations remain in force, satisfying the non-waiver provisions of General Business Law Sections 687(4) and 687(5). This ensures that franchisees do not waive certain legal protections afforded to them under New York law.
In practical terms, this means that City Publications is required to disclose any history of fraudulent conversion or misappropriation of property by individuals associated with the franchise. Furthermore, prospective franchisees in New York retain their rights and legal recourse under New York's General Business Law, which cannot be waived by the franchise agreement. This offers a degree of protection to franchisees in the event of disputes or legal issues.