What is the relevance of the Maryland Franchise Registration and Disclosure Law to the 7 Brew franchise agreement, according to the Rider?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
erate under the Franchise Agreement | | will be located in Maryland. | | 2. | | ACKNOWLEDGMENTS. Paragraphs (7) through (14) of Section 2 of the | | Franchise Agreement are hereby deleted. | | The following language is added to the end of Section 2 of the Franchise Agreement: | | All representations requiring you to assent to a release, estoppel, or waiver of | | liability are not intended to nor shall they act as a release, estoppel, or waiver of | | any liability incurred under the Maryland Franchise Registration and Disclosure | | Law. |
- FEES. The following language is added at the end of Section 5.A of the Franchise Agreement:
Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, we have secured a surety bond in the amount of $850,000 from Travelers Casualty and Surety Company of America. A copy of the bond is on file at the Maryland Office of the Attorney General, Securities Division, 200 St. Paul Place, Baltimore, Maryland 21202.
- RELEASES. The following language is added at the end of Sections 4.A, 16.A, 16.C(2)(i), 16.G, 17, and 19.F(3) of the Franchise Agreement:
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.
- GOVERNING LAW The following language is added to the end of Section 21.G of the Franchise Agreement:
However, to the extent required by applicable law, Maryland law will apply to claims arising under the Maryland Franchise Registration and Disclosure Law.
- CONSENT TO JURISDICTION. The following language is added at the end of Section 21.H of the Franchise Agreement:
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.
- LIMITATION OF CLAIMS. The following sentence is added to the end of Section 21.L of the Franchise Agreement:
, except that any and all claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three (3) years after the grant of the Franchise.
IN WITNESS WHEREOF, the parties have executed and delivered this Rider to be effective as of the Effective Date of the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the Rider to the Franchise Agreement addresses specific considerations for franchisees in Maryland due to the Maryland Franchise Registration and Disclosure Law. Because 7 Brew's financial condition necessitated a financial assurance, the Maryland Securities Commissioner required a surety bond of $850,000. This bond, obtained from Travelers Casualty and Surety Company of America, is on file at the Maryland Office of the Attorney General, Securities Division in Baltimore, Maryland.
The Rider clarifies that any general release required for renewal, sale, or transfer of the franchise does not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. This means a franchisee's rights under this law are protected even when signing releases for other aspects of the franchise agreement.
Furthermore, the Rider specifies that Maryland law will govern claims arising under the Maryland Franchise Registration and Disclosure Law, to the extent required by applicable law. Franchisees can bring actions in Maryland for claims related to this law, subject to arbitration obligations. Any claims under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the franchise grant. The Rider also ensures that franchisees do not waive any claims or disclaim reliance on statements made by 7 Brew or its representatives under applicable state franchise law, including fraud in the inducement.