N.Y. General Business Law § 685: Escrows and impoundments

§ 685. Escrows and impoundments. If the department of law finds that

the applicant for registration has failed to demonstrate that adequate

financial arrangements have been made to fulfill obligations to provide

real estate, improvements, equipment, inventory, training, or other

items included in the offering, the department may require the escrow or

impoundment of franchise fees and other funds paid by the franchisee or

subfranchisor until the obligations are fulfilled, or, at the option of

the franchisor, the furnishing of a surety bond as provided by rule of

the department of law if it finds that the requirement is necessary and

appropriate to protect prospective franchisees or subfranchisors.