N.Y. Laws » CHAPTER General Business / ARTICLE Franchises
New York Consolidated Laws

N.Y. General Business Law § 691 (2026)

Civil remedies

✓ text as retrieved May 2026 (this copy records no edition or section history)
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§ 691. Civil remedies. 1. A person who offers or sells a franchise in
violation of section six hundred eighty-three, six hundred eighty-four
or six hundred eighty-seven of this article is liable to the person
purchasing the franchise for damages and, if such violation is willful
and material, for rescission, with interest at six percent per year from
the date of purchase, and reasonable attorney fees and court costs.
  2. A person may not file or maintain suit under this section if the
franchisee or such person received a written offer before suit, and at a
time when he owned the franchise, to refund the consideration paid
together with interest at six percent per year from the date of payment,
less the amount of income earned by the franchisee from the franchise,
conditioned only upon tender by the person of all items received by him
for the consideration and not sold, and failed to accept the offer
within thirty days of its receipt, provided that the offering documents
are submitted to the department for approval at least ten business days
prior to submission to the franchisee. The rescission offer shall recite
the provisions of this section. If the franchise involves a substantial
building or substantial equipment or fixtures and a significant period
of time has elapsed since the sale of the franchise to the franchisee,
the department in approving a rescission offer may approve an equitable
offer recognizing depreciation, amortization, and other factors which
bear upon the value of the franchise being returned to the franchisor.
Nothing in this subdivision shall prohibit settlement of any dispute
arising under or involving claims based on this chapter, with or without
approval of the department.
  3. A person who directly or indirectly controls a person liable under
this article, a partner in a firm so liable, a principal executive
officer or director of a corporation so liable, a person occupying a
similar status or performing similar functions, and an employee of a
person so liable, who materially aids in the act of transaction
constituting the violation, is also liable jointly and severally with
and to the same extent as the controlled person, partnership,
corporation or employer. It shall be a defense to any action based upon
such liability that the defendant did not know or could not have known
by the exercise of due diligence the facts upon which the action is
predicated.
  4. An action shall not be maintained to enforce a liability created
under this section unless brought before the expiration of three years
after the act or transaction constituting the violation.
  5. Except as explicitly provided in this article, civil liability in
favor of any private party shall not arise against a person by
implication from or as a result of the violation of a provision of this
article or a rule, regulation or order hereunder. Nothing in this
article shall limit a liability which may exist by virtue of any other
statute or under common law if this article were not in effect.
Notes of Decisions
Cited in 18 cases (6 in the last 5 years), 1987–2026 · leading case: A.J. Temple Marble & Tile, Inc. v. Union Carbide Marble Care, Inc., 663 N.E.2d 890 (N.Y. 1996).
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A.J. Temple Marble & Tile, Inc. v. Union Carbide Marble Care, Inc., 663 N.E.2d 890 (N.Y. 1996). · cites it 20× “s under section 691 (3) of the Franchise Sales Act which imposes joint and several liability on a partner, executive officer, director or other controlling person of a franchisor, including "a person occupying a similar status or performing similar functions, and an employee of…”
Fantastic Enter., Inc. v. S.M.R. Enter., Inc., 143 Misc. 2d 124 (N.Y. Sup. Ct. 1988). · cites it 8× “The plaintiffs’ second cause of action realleges the first, it then asserts that the violations of the Franchise Sales Act were willful and/or material, and that because of this the *126 franchise agreements are subject to rescission pursuant to General Business Law § 691 (1).…”
EV Scarsdale Corp. v. Engel & Voelkers North East LLC, 48 Misc. 3d 1019 (N.Y. Sup. Ct. 2015). “The court, however, first addresses the New York plaintiffs, who assert claims under General Business Law §§ 683, 687 and seek the remedies set forth in General Business Law § 691. A. The NYFSA “The [NYFSA] was enacted in 1980 to combat abuses that had accompanied the growth of…”
Dipilato v. 7-Eleven, Inc., 662 F. Supp. 2d 333 (S.D.N.Y. 2009). “2d 400, 402 (2d Dep’t 2002); private actions for violations of Sections 683(11) and 687 may, pursuant to N.Y. General Business Law Section 691, be brought only by actual (not prospective) franchisees, see Chu v.”
Jung Hing Leung v. Lotus Ride, Inc., 198 A.D.2d 155 (N.Y. App. Div. 1st Dep't 1993). · cites it 2× “In this action brought by a number of radio car service drivers against the service franchisor and several related entities and their officers, the IAS Court properly dismissed as untimely those claims brought under the Franchise Sales Act as are based on franchise agreements…”
Burgers Bar Five Towns, LLC v. Burger Holdings Corp., 71 A.D.3d 939 (N.Y. App. Div. 2d Dep't 2010). · cites it 2× “However, in opposition to the plaintiffs motion for summary judgment, the defendants raised a triable issue of fact as to whether they were exempt from the registration requirement pursuant to General Business Law § 684 (3) (c). Moreover, even if the defendants violated the…”
State v. Danny's Franchise Sys., Inc., 131 A.D.2d 746 (N.Y. App. Div. 2d Dep't 1987). “Finally, it should be noted that the act specifically contains a three-year Statute of Limitations for private actions (General Business Law § 691). The act is otherwise silent with regard to time limitations.”
Baker Boy of Glendale, Inc. v. 35-63 82nd Street Corp., 166 A.D.2d 397 (N.Y. App. Div. 2d Dep't 1990). “General Business Law § 691 (1) provides, in relevant part, that rescission is an available remedy only where a franchise seller’s violation of General Business Law § 683 is "willful and material.”
TKO Fleet Enter., Inc. v. Elite Limousine Plus, Inc., 184 Misc. 2d 460 (N.Y. Sup. Ct. 2000). “(General Business Law § 691 [4].) However, in the Assurance of Discontinuance agreed to by TKO in November 1997, TKO agreed “to make a recission offer, pursuant to section 691 (2) of the GBL, to each of the franchisees who complains, within (3) years from the date of this…”
TKO Fleet Enter., Inc. v. Elite Limousine Plus, Inc., 286 A.D.2d 436 (N.Y. App. Div. 2d Dep't 2001). “Contrary to the defendants’ contention, the plaintiff is not precluded from seeking relief based upon the franchise agreements in this case, even though the plaintiff allegedly violated General Business Law § 683 (1) by failing to register an offering prospectus with the…”
South Shore D'Lites LLC v. First Class Prods. Grp., LLC, 215 A.D.3d 412 (N.Y. App. Div. 1st Dep't 2023). “The court, however, properly declined to issue a summary judgment ruling in favor of plaintiffs on the issue of whether the violation was willful and material such that they are entitled to reasonable attorneys' fees and costs under General Business Law § 691(1). Finally, the…”
Tyszka v. Make & Take Holding, LLC, 72 A.D.3d 1620 (N.Y. App. Div. 4th Dep't 2010). “The first cause of action alleged, inter alia, that defendant willfully and materially aided Make and Take in selling the franchises and thus was liable pursuant to General Business Law § 691. Pursuant to section 691 (1), a person who offers or sells a franchise in violation of…”
Show all 18 citing cases →
N.Y. General Business Law § 691(1): 3 cases
South Shore D'Lites LLC v. First Class Prods. Grp., LLC, 215 A.D.3d 412 (N.Y. App. Div. 1st Dep't 2023). “The court, however, properly declined to issue a summary judgment ruling in favor of plaintiffs on the issue of whether the violation was willful and material such that they are entitled to reasonable attorneys' fees and costs under General Business Law § 691(1). Finally, the…”
South Shore D'Lites LLC v. First Class Prods. Grp., LLC, 215 A.D.3d 412 (N.Y. App. Div. 1st Dep't 2023).
South Shore D'Lites, LLC v. First Class Prods. Grp., LLC, 237 A.D.3d 487 (N.Y. App. Div. 1st Dep't 2025).
N.Y. General Business Law § 691(4): 1 case
West Valley KB Venture, LLC v. ILKB LLC, No. 2:20-cv-03278 (E.D.N.Y. Sept. 13, 2021).
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