N.Y. Gen. Bus. Law § 685

§ 685. Escrows and impoundments. If the department of law finds that\nthe applicant for registration has failed to demonstrate that adequate\nfinancial arrangements have been made to fulfill obligations to provide\nreal estate, improvements, equipment, inventory, training, or other\nitems included in the offering, the department may require the escrow or\nimpoundment of franchise fees and other funds paid by the franchisee or\nsubfranchisor until the obligations are fulfilled, or, at the option of\nthe franchisor, the furnishing of a surety bond as provided by rule of\nthe department of law if it finds that the requirement is necessary and\nappropriate to protect prospective franchisees or subfranchisors.\n