What Maryland law necessitates amendments to the 360 Painting Franchise Agreement?
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 franchis
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 the 360 Painting Franchise Agreement. These amendments ensure that the franchise documents align with Maryland law.
Specifically, the FDD states that certain provisions in the franchise documents must be modified to comply with Maryland law. This includes stipulations that prevent franchisees from waiving claims under the Maryland Franchise Registration and Disclosure Law, allow franchisees to bring lawsuits in Maryland for claims arising under this law (even if the Franchise Agreement specifies Virginia), and ensure that general releases signed by franchisees do not apply to liabilities under the Maryland Franchise Registration and Disclosure Law.
Additionally, any claims arising under the Maryland Franchise Registration and Disclosure Law can be brought within three years after the franchise is granted. The Maryland Securities Commissioner also requires a financial assurance based on 360 Painting's financial condition, leading to the deferral of initial fees and payments until 360 Painting completes its pre-opening obligations.
These amendments are crucial for protecting the rights of 360 Painting franchisees in Maryland and ensuring compliance with state-specific franchise regulations. Prospective franchisees should carefully review these amendments to understand their rights and obligations under Maryland law.