New York Consolidated Laws, General Business Law - GBS § 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.