(a) The franchisor has a net worth on a consolidated basis, according to its most recently audited financial statement, of not less than five million dollars; or the franchisor has a net worth, according to its most recently audited financial statement, of not less than one million dollars and is at least eighty percent owned by a corporation which has a net worth on a consolidated basis, according to its most recently audited financial statement, of not less than five million dollars; and

(b) The franchisor files with the department of law an application for an exemption, on forms and in the manner prescribed by the department, and a consent to service of process on the form required by the department; and

(c) The franchisor discloses in writing to each prospective franchisee, at least seven days prior to the execution by the prospective franchisee of any binding franchise or other agreement, or at least seven days prior to the receipt of any consideration, whichever occurs first, the following information:

(1) The name of the franchisor, the name under which the franchisor is doing or intends to do business, and the name of any parent or affiliated company that will engage in business transaction with the franchisee.

(2) The franchisor's principal business address and the name and address of its agent in this state authorized to receive process.

(3) The business form of the franchisor, whether corporate, partnership, or otherwise.

(4) Such information concerning the identity and business experience of persons affiliated with the franchisor as the department may by rule prescribe.

(5) The business experience of the franchisor, including the length of time the franchisor (i) has conducted a business of the type to be operated by franchisees, (ii) has granted franchises for such business, and (iii) has granted franchises in other lines of business.

(6) A copy of the typical franchise contract or agreement proposed for use and in use in this state, including all amendments, deletions, variations, and supplements thereto.

(7) A statement of the franchise fee charged, the proposed application of the proceeds of such fee by the franchisor, and the formula by which the amount of the fee is determined if the fee is not uniform and the same in all cases.

(8) A statement describing any payments or fees other than franchise fees that the franchisee is required to pay to the franchisor, including royalties and payments or fees which the franchisor collects in whole or in part on behalf of a third party or parties.

(9) A statement of the conditions under which the franchise agreement may be terminated or renewal refused, or repurchased at the option of the franchisor.

(10) A statement as to whether, by the terms of the agreement or by other device or practice, the franchisee is required to purchase from the franchisor or his designee services, supplies, products, fixtures or other goods relating to the establishment or operation of the franchise business, together with a description and the terms and conditions thereof.

(11) A statement as to whether, by the terms of the franchise agreement or by other device or practice, the franchisee is limited in the goods or services offered by him to his customers.

(12) A statement of the terms and conditions of any financing arrangements when offered directly or indirectly by the franchisor or his agent or affiliate.

(13) A statement of any past or present practice or of any intent of the franchisor to sell, assign, or discount to a third party any note, contract, or other obligation of the franchisee in whole or in part.

(14) If any statement of estimated or projected franchisee earnings or income is used, a statement of such estimate or projection and the data, methods and computations upon which such estimate or projection is based.

(15) A statement as to whether franchisees receive an exclusive area or territory.

(16) Other information related to the offer and sale of the franchise as the department of law may reasonably require.

(d) Applications for exemptions shall be signed and verified by the franchisor in the same manner provided in the civil practice law and rules for the verification of pleadings, and shall be filed with the department of law at its office in the city of New York. 3. There shall be exempted from the registration provisions of section six hundred eighty-three of this article the offer and sale of a franchise if:

(a) (i) The franchisor has a net worth on a consolidated basis, according to its most recent audited financial statement, of not less than fifteen million dollars; or the franchisor has a net worth, according to its most recent audited financial statement, of not less than three million dollars and is at least eighty percent owned by a corporation which has a net worth on a consolidated basis, according to its most recent audited financial statement, of not less than fifteen million dollars; and

(ii) The franchisor discloses in writing to each prospective franchisee, at least seven days prior to the execution by the prospective franchisee of any binding franchise or other agreement, or at least seven days prior to the receipt of any consideration, whichever occurs first, such information as is required to be disclosed under subparagraph two of paragraph (c) of subdivision two of this section.

(b) The offer or sale is to a bank, savings institution, trust company, insurance company, investment company, or other financial institution, association, or institutional buyer, or to a broker-dealer, where the purchaser is acting for itself or in some fiduciary capacity.

(c) The transaction is pursuant to an offer directed by the franchisor to not more than two persons, other than persons specified in this subdivision, if the franchisor does not grant the franchisee the right to offer franchises to others, a commission or other remuneration is not paid directly or indirectly for soliciting a prospective franchisee in this state, and the franchisor is domiciled in this state or has filed with the department of law its consent to service of process on the form prescribed by the department.

(d) The offer or sale by a franchisor of a franchise to one of his existing franchisees. This exemption shall apply where:

(i) the existing franchisee has actively operated a franchise of the selling franchisor for the eighteen months preceding the offer; and

(ii) the existing franchisee purchases the franchise in order to operate the business and not for the purpose of resale; and

(iii) the franchisor reports the sale to the department of law on the form required by the department within fifteen days of the sale. 4. The department of law may, in its discretion, deny or revoke an exemption with respect to a specific franchisor or transaction, or withdraw or further condition any exemption enumerated in this section. 5. The offer or sale of a franchise by a franchisee for his own account or the offer and sale of an entire area franchise owned by a subfranchisor for his own account is exempted from the registration provisions of section six hundred eighty-three of this article if:

(a) The sale is an isolated sale and not part of a plan of distribution of franchises; and

(b) The sale is not effected by or through a franchisor; and

(c) The franchisee furnishes to the prospective purchaser, at least one week prior to the execution of any binding contract or purchase agreement, or at least one week prior to the receipt of any consideration, whichever occurs first, a copy of the offering prospectus of the franchisor (including amendments, if any) currently registered with the department of law. A sale is not effected by or through a franchisor merely because a franchisor has a right to approve or disapprove a different franchisee. 6. This article shall not be applicable to any transaction relating to a bank credit card plan. "Bank credit card plan" means a credit card plan in which the issuers of credit cards are only: banks regulated by or under the supervision of the Federal Reserve Board; the Federal Deposit Insurance Corporation; the Controller of the Currency of the United States; or the Superintendent of Financial Services of this state; or persons controlling such banks, provided that the assets of such a bank or banks represent a majority of the assets on a consolidated basis of any holding company system of which such card issuers may be a party; or, persons controlled by such banks.