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 2025, let’s explore recent updates that could influence New York franchisors, franchisees and multi-unit operators.
New Gym Membership Cancellation Policy in Effect
Gym and health club franchise owners should know that S.932D/A.4667B went into effect on Feb. 1, 2025. Signed in November 2024 by Gov. Kathy Hochul, the legislation requires health clubs to accept cancellation of a membership within 10 business days of receiving notice of the cancellation. State legislators said the action expands options for consumers and members and makes the cancellation process easier.
The bill was introduced by Assemblymember Jeffrey Dinowitz, who said the law marks a major step forward in modernizing health club contract practices in New York.
“By expanding cancellation methods to include internet options and shortening refund timelines for the health club to pay back customers, we empower consumers with the tools they need to avoid unnecessary financial burdens,” he noted in a statement. “This legislation concerns fairness, accessibility, and bringing cancellation options into the 21st century. I’m proud to see New York leading the way in consumer protection.”
Franchise owners should make their employees aware of this new state law and ensure that membership and account executives update their policies and procedures to comply with this new guidance.
Offering Delivery? Show Your Sanitary Inspection Grades
Also effective on Feb. 1 was S.509B/A.28C, which requires 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.
Corporate Transparency Act Enforcement Suspended
The Corporate Transparency Act (CTA) made headlines again.
In February, we noted that the Financial Crimes Enforcement Network (FinCEN) announced that beneficial ownership information (BOI) reporting requirements were back in effect, with a deadline of March 21, 2025, for most companies. The law aimed to help the U.S. Department of the Treasury (DOT) combat financial anonymity that enables crimes such as corruption, drug trafficking, and terrorism.
However, FinCEN, which is a bureau of the DOT, announced on March 2:
“…not only will [DOT] not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either.”
Furthermore, the DOT will propose a rule that will “narrow the scope of the rule to foreign reporting companies only.” DOT Secretary Scott Bessent referred to the announcement as a “victory for common sense.”
Franchisors and franchisees should speak with a NY franchise lawyer to ensure that they understand the scope of the federal law and are still complying with state law.
Trade Policies, Tariffs and Your Franchise Agreement
Franchisors and franchisees are likely concerned about the ongoing news regarding tariffs imposed on countries like Canada, Mexico, and China.
The imposition of the tariffs may impact supply chains worldwide and include items essential to franchises – from machinery and raw materials to food ingredients.
Developments about tariffs are announced almost daily. With this in mind, franchisors and franchisees, and multi-unit operators should consult with their NY franchise lawyer to review their rights and obligations under their franchise agreements with regard to pooling resources and supply chain management.
News, appointments, and state and federal laws are announced at a rapid pace. 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.
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Lusthaus Law’s website is a resource for New York franchisors and franchisees. 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.
