Legislative developments in federal and state governments impacted NY franchisors and franchisees in 2025. These changes can help or hinder franchises system-wide and at the unit level, with one guideline change approaching a deadline of Dec. 31, 2025.
That is why franchisors and franchisees need to strategize with their NY franchise lawyers immediately. Let’s review the key updates from the past year and changes they might signal in 2026.
Know How Corporate Transparency Reporting Differs Between NY and the Fed
In 2025, the federal Corporate Transparency Act (CTA) was significantly narrowed to only apply to foreign companies registered to do business in the U.S. An interim final rule published on March 26, 2025, exempts all U.S. entities from beneficial ownership information (BOI) reporting requirements and removes any penalties for past non-compliance. Foreign companies now have a 30-day deadline to file their initial BOI reports.
Regardless of the fate of the federal CTA, the New York Limited Liability Company Transparency Act (NYLLCTA), which was originally signed in 2023, will take effect on Jan. 1, 2026, requiring LLCs to disclose ownership information to a state-level database.
Reporting companies should check the Department of the Treasury’s site and FinCEN.gov and its Interim Final Rule Q&A page. NY limited liability companies should also monitor the official New York Department of State website (and its On-Line Filing page) for specific instructions and the launch of the new portal, which is expected to be on Jan. 1, 2026, when the law takes effect. Still have questions? Speak with a NY franchise lawyer to stay updated.
SBA Franchise Directory Reopens; Deadline Extended to Dec. 31
The Small Business Administration’s (SBA) Franchise Directory returned in 2025. This directory is an official, SBA-maintained list of franchise brands eligible for Administration-backed financing. Its primary purpose is to streamline the loan approval process by confirming a franchise system’s eligibility upfront, reducing the need for lenders to individually review and analyze franchise agreements for each loan applicant.
To qualify for inclusion, a brand must meet the Federal Trade Commission’s (FTC) legal definition of a franchise or, in some cases, submit license or dealer agreements for SBA review. Importantly, inclusion in the directory does not imply endorsement or guarantee of success by the SBA — it simply confirms the brand’s structural eligibility for SBA lending programs. Approved franchisors receive a unique Franchise Identifier Code.
Without the directory, lenders face lengthier, more complex underwriting processes, which can deter prospective franchisees and slow system growth.
Franchisors must submit an updated “Franchisor Certification” by Dec. 31, 2025, to remain listed and be eligible for SBA loans. The original deadline was July 31 and this extension is a holiday gift for all who missed it. For franchisors, franchisees and lenders alike, directory participation directly impacts system growth, resale markets, and access to capital.
Visit the directory and confirm your eligibility here. Your NY franchise lawyer can help ensure you are accurately listed.
Sanitary Inspection Grades Required to Deliver in NY
On Feb. 1, 2025, the NY State Senate enacted S.509B/A.28C, requiring restaurants that offer online delivery services to post a hyperlink to recent sanitary inspection grades on their website and mobile application.
This new level of transparency was championed to reduce foodborne illnesses and help consumers “make informed decisions about their health and safety when ordering food online,” said State Senator Kevin Thomas.
The law specifically mentions delivery apps, demonstrating how legislators are keeping modern technologies and diners’ trends in mind during the drafting stage.
Franchisees should collaborate with their technology officers, app developers, web masters and social media managers to ensure they are providing this transparency.
Looking Forward to the New Year
News, appointments, and state and federal laws will be introduced and announced in 2026. That is why franchisors and franchisees should collaborate with a qualified NY 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 updates from Q3, Q2 and Q1 of 2025.
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.
