Lusthaus Law offers insights into the regulations and legislation affecting franchising at the state, federal, and industry levels. Important changes occur regularly, along with new concepts designed to enhance and regulate the franchising sector. As we close out Q1 2026, let’s explore recent updates that could influence franchisors, franchisees and multi-unit operators in New York and nationwide.
Good News For NY Franchisors: OAG Launches Expedited Renewal Registration Process
New guidance issued in February by the New York State Office of the Attorney General (OAG) outlines several procedural updates designed to accelerate the review of franchise registration filings, particularly renewal applications submitted under the New York Franchise Sales Act. This is a welcome change. The new process will:
- Streamline filings,
- Reduce processing bottlenecks, and
- Shorten approval timelines for franchise renewals in New York.
A key feature of the expedited process is an early review option for renewal applications before audited financial statements are finalized. Under existing rules, franchisors must submit renewal applications within 120 days after the close of their fiscal year. Because many franchisors operate on a December 31 fiscal year, this results in a surge of filings in April. To reduce delays, the OAG will now begin reviewing renewal applications that are otherwise complete within 75 days of the fiscal year-end, even if audited financial statements are not yet available.
To request early review, the franchisor must clearly label the filing as a “No Audited Financials–Early Review Renewal Application.” The submission should contain all other finalized components of the Franchise Disclosure Document (FDD) but must omit its issuance date, auditor’s consent, and certification until the audited financials are completed. The OAG will review the filing and issue deficiency comments on all items not dependent on the financial statements, allowing the franchisor to resolve most issues before final documents are submitted. Once the audited financials become available, the franchisor files the updated FDD, auditor consent, and certification to complete the application.
The OAG has also created a prioritization process for renewal applications tied to pending franchise sales. If a franchisor has timely filed its renewal but needs approval to close a pending deal, it may request expedited handling by emailing the agency with details about the prospective franchisee and anticipated transaction terms. The request must include a signed affirmation and supporting documentation uploaded through the North American Securities Administrators Association (NASAA) Electronic Filing Depository system. Learn about NASAA’s most recent guidance clarifying the evolving material changes that impact FDDs.
New York is not the only state working to mitigate procedural backlogs. Maryland launched its Fast-Track Renewal Program on Jan. 1, 2026. The program allows franchisors with a fiscal year end between December 24 and January 7, and who have no pending enforcement matters with the Securities Division, to submit a franchise renewal application (including the FDD) by February 1, before the franchisor’s independent certified public accountant has completed the audit of the financial statements.
These developments provide time-saving benefits for franchisors and franchisees looking to buy or sell franchises.
Consult a franchise lawyer to learn more about registration and the expedited renewal process.
Throwback: 2020 Joint Employer Rule Reinstated
We have covered the joint employer rule, especially over the last six years as the rule has been passed and struck down several times. This is largely attributable to the changes in presidential administrations and leadership at various federal agencies.
In late February, the National Labor Relations Board (NLRB) withdrew the 2023 joint employer rule and reinstated its 2020 predecessor. As previously discussed, the 2023 rule could have exposed franchisors to claims that their franchise agreements and brand standards make them joint employers of their franchisees’ employees for purposes of collective bargaining and labor disputes.
By contrast, the 2020 joint employer rule makes it harder for workers to join unions and bargain contracts. The International Franchise Association (IFA) lauded the NLRB’s action, but is still calling for an end to the regulatory back-and-forth that has confused and frustrated franchisors and franchisees. The solution has been presented, the IFA noted, in the form of the American Franchise Act as a replacement and federal guidance.
The IFA stated:
The bipartisan, bicameral American Franchise Act modestly amends the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA) to clarify that: “A franchisor may be considered a joint employer of the employees of a franchisee only if the franchisor possesses and exercises substantial direct and immediate control over one or more essential terms or conditions of the employees of the franchisee.” This is consistent with historical precedent and current NLRB policy.
The Act has up to 79 bipartisan cosponsors in the U.S. House, and Lusthaus Law will continue to keep you apprised of any developments. Franchisors and franchisees should consult their franchise lawyers to review their franchise agreements.
Federal Agencies Seek Public Comment Regarding Antitrust Policies and Business Collaborations
In an effort to promote competition, the Federal Trade Commission (FTC) and the Department of Justice’s (DOJ) Antitrust Division are seeking public comment for guidance on business collaborations.
This public inquiry will help the FTC and DOJ with their effort to develop updated guidance to the business community, building on the previous 2000 Antitrust Guidelines for Collaborations Among Competitors. The guidelines explain how the FTC and DOJ analyze various antitrust issues raised by such collaborations. The 2000 Guidelines were withdrawn in December 2024.
This could have meaningful implications for franchise systems because franchisees are independent businesses that may also compete with one another in local markets. This dynamic raises antitrust questions around labor practices, information sharing, cooperative purchasing, and other common system-level coordination.
“Vigorous and effective enforcement can only exist when the rules of the road are clearly outlined,” said Acting Assistant Attorney General for Antitrust Omeed A. Assefi. “Procompetitive collaborations are not only permissible but also encouraged in a complex and dynamic economic environment.”
Comments are limited to 18 pages and will be used by the agencies to consider updated guidance. They can be submitted at regulations.gov and must be received by April 24, 2026.
News, appointments, and state and federal laws are announced at a rapid pace. That is why franchisors and franchisees should collaborate with a qualified franchise lawyer to perform legal audits of their enterprises and review compliance with existing and forthcoming laws.
Contact Lusthaus Law
Lusthaus Law’s website is a resource for New York franchisors and franchisees. You can read our consistent coverage of the legal and regulatory updates that impact franchising – such as the FTC’s “Click-To-Cancel” Rule and quarterly roundups.
We have published two downloadable and complimentary e-books and our Insights blog is regularly updated to reflect industry trends and recent achievements in client representation.
Contact us today to learn more about how Lusthaus Law P.C. can help you navigate a clear path for your franchise’s successful future.
