For a 7 Brew franchise, what state law is specifically referenced regarding the release of claims?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
Any release executed will not apply to the extent otherwise prohibited by applicable law with respect to claims arising under the North Dakota Franchise Investment Law.
Pursuant to COMAR 02.02.08.16L, such general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
However, to the extent required by applicable law, Maryland law will apply to claims arising under the Maryland Franchise Registration and Disclosure Law.
Notwithstanding the foregoing, and subject to your arbitration obligations, you may bring an action in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the franchise agreement contains state-specific addenda regarding the release of claims. For franchisees operating in North Dakota, any release executed will not apply to the extent prohibited by applicable law with respect to claims arising under the North Dakota Franchise Investment Law. This means that franchisees in North Dakota retain their rights under the state's franchise investment law, even if they sign a general release.
Similarly, for franchisees in Maryland, any general release required as a condition of renewal, sale, or transfer of the franchise will not apply to any liability under the Maryland Franchise Registration and Disclosure Law, as per COMAR 02.02.08.16L. Furthermore, Maryland law will govern claims arising under the Maryland Franchise Registration and Disclosure Law to the extent required by applicable law. Franchisees in Maryland also have the right to bring an action in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, notwithstanding any arbitration obligations.
These state-specific provisions are crucial for prospective franchisees to understand, as they ensure that franchisees in North Dakota and Maryland do not waive their rights under state franchise laws when signing releases related to the franchise agreement. This offers additional protection to franchisees in these states, ensuring they can pursue claims under their state's franchise laws if necessary.