To what extent is each provision of the Maryland Amendment effective for 360 Painting franchisees?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
The Maryland Franchise Registration and Disclosure Law requires that certain provisions contained in franchise documents, including the Franchise Agreement, be amended to be consistent with Maryland law. Therefore, to the extent that the Franchise Agreement contains provisions that are inconsistent with the following, the modifications set forth below shall be controlling:
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- While the Franchise Agreement requires you to disclaim the occurrence and/or acknowledge the nonoccurrence of acts which would constitute a violation of franchise laws, such representation and acknowledgments are not intended to nor shall they act as a release, estoppel or waiver of any liability or claims arising under the Maryland Franchise Registration and Disclosure Law.
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- While the Franchise Agreement requires litigation to be conducted only in a court in the Commonwealth of Virginia, you may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
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- If you are required to sign a general release of claims pursuant to the Franchise Agreement as a condition of renewal, sale and/or assignment/transfer of your franchise, such release will not apply with respect to any liability under the Maryland Franchise Registration and Disclosure Law.
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- Any claims arising under the Maryland Franchise Registration and Disclosure Law may be brought within three (3) years after the grant of the franchise.
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- Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement.
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- No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
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- Each provision of this Amendment will be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law are met independently without reference to this Amendment.
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- Except as otherwise provided in this Amendment, all of the other terms, covenants and agreements in the Franchise Agreement shall remain the same, and the Franchise Agreement, as amended, shall continue in full force and effect. To the extent this Amendment is inconsistent with any terms or conditions of the Franchise Agreement or any attachments thereto, the terms of this Amendment shall govern and control.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 FDD, the Maryland Franchise Registration and Disclosure Law necessitates amendments to certain provisions within 360 Painting's franchise documents to ensure compliance with Maryland law. Consequently, any conflicting provisions in the Franchise Agreement are superseded by the modifications outlined in the amendment.
Specifically, any franchisee representations or acknowledgments within the Franchise Agreement do not act as a release, estoppel, or waiver of liability or claims under the Maryland Franchise Registration and Disclosure Law. While the standard Franchise Agreement might stipulate litigation exclusively in Virginia, Maryland franchisees retain the right to file lawsuits in Maryland for claims arising under Maryland franchise law. Furthermore, any general release required for franchise renewal, sale, or transfer will not apply to liabilities under the Maryland Franchise Registration and Disclosure Law.
The FDD states that claims under the Maryland Franchise Registration and Disclosure Law can be brought within three years of the franchise grant. Due to 360 Painting's financial condition, the Maryland Securities Commissioner mandates a financial assurance, deferring all initial fees and payments from franchisees until 360 Painting fulfills its pre-opening obligations. Moreover, no statement or acknowledgment signed by a franchisee can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on franchisor statements; this provision overrides any conflicting terms in franchise documents. Each amendment provision is effective only to the extent it independently meets the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law. The original Franchise Agreement remains in effect, except where the amendment's terms govern due to inconsistencies.