What is the relationship between the Maryland Franchise Registration and Disclosure Law and 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 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 360 Painting Franchise Disclosure Document, the Maryland Franchise Registration and Disclosure Law necessitates specific amendments to the standard 360 Painting Franchise Agreement to ensure compliance with Maryland law. These amendments take precedence over conflicting provisions in the original agreement.
Specifically, the addendum clarifies that franchisees in Maryland cannot be compelled to waive rights or claims under the Maryland Franchise Registration and Disclosure Law, even if the standard agreement contains such requirements. Franchisees retain the right to file lawsuits in Maryland for claims arising under this law, regardless of any clauses in the agreement that mandate litigation in Virginia. Any general release signed as a condition of renewal, sale, or transfer will not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. The addendum also specifies that claims under this law can be brought within three years of the franchise grant.
Furthermore, due to 360 Painting's financial condition, the Maryland Securities Commissioner requires financial assurance, leading to a deferral of initial fees and payments from Maryland franchisees until 360 Painting fulfills its pre-opening obligations. The addendum also states that no statement or acknowledgment signed by a franchisee can waive claims or disclaim reliance on franchisor statements, superseding any conflicting terms in the franchise documents. Each provision of the amendment is effective only if the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law are independently met. Except for these specific amendments, the original Franchise Agreement remains in full effect, with the terms of the amendment governing in case of inconsistencies.