(b) Any offer or sale of a franchise, if the franchise involves the adding of a new product or service line to the existing business of a prospective franchisee, is exempt from registration provided all of the following are met:

1. (1) For at least the last 24 months prior to the date of sale of the franchise, the prospective franchisee, or if the prospective franchisee is not a natural person, an existing officer, director, or managing agent of the prospective franchisee who has held that position with the prospective franchisee for at least the last 24 months, has been engaged in a business offering products or services substantially similar or related to those to be offered by the franchised business.
2. (2) The new product or service is substantially similar or related to the product or service being offered by the prospective franchisee's existing business.
3. (3) The franchised business is to be operated from the same business location as the prospective franchisee's existing business.
4. (4) The parties anticipated, in good faith, at the time the agreement establishing the franchise relationship was reached, that sales resulting from the franchised business will not represent more than 20 percent of the total sales in dollar volume of the franchisee on an annual basis.
5. (5) The prospective franchisee is not controlled by the franchisor.
6. (6) The franchisor notifies in writing the Department of Law of the specific circumstances surrounding the fractional franchise exemption and pays the statutory fee for an amendment as prescribed in section 694.1(b) of the General Business Law.