New York Laws
Article 33 - Franchises
685 - Escrows and Impoundments.

§ 685. Escrows and impoundments. If the department of law finds that
the applicant for registration has failed to demonstrate that adequate
financial arrangements have been made to fulfill obligations to provide
real estate, improvements, equipment, inventory, training, or other
items included in the offering, the department may require the escrow or
impoundment of franchise fees and other funds paid by the franchisee or
subfranchisor until the obligations are fulfilled, or, at the option of
the franchisor, the furnishing of a surety bond as provided by rule of
the department of law if it finds that the requirement is necessary and
appropriate to protect prospective franchisees or subfranchisors.

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