Does the All States M.E.D. franchise agreement's arbitration clause potentially conflict with Maryland franchise law?

According to the 2024 All States M.E.D. Franchise Disclosure Document, the franchise agreement's arbitration clause may conflict with Maryland franchise law. The Maryland Addendum to the Franchise Agreement addresses this issue directly. It states that a Maryland franchise regulation considers it an unfair or deceptive practice if All States M.E.D. requires a franchisee to waive their right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. However, the addendum also acknowledges that the enforceability of this forum selection requirement is in dispute due to the Federal Arbitration Act.

This means that while All States M.E.D.'s standard franchise agreement includes a clause requiring disputes to be resolved through arbitration, Maryland law may offer some protection to franchisees who wish to pursue legal action in Maryland courts for violations of Maryland franchise law. The addendum clarifies that its provisions take precedence over any conflicting terms in the standard franchise agreement for franchises governed by Maryland law.

For a prospective All States M.E.D. franchisee in Maryland, this addendum is crucial. It suggests that the franchisee may have the right to bring certain disputes before a Maryland court, despite the arbitration clause in the franchise agreement. However, due to the acknowledged dispute regarding the enforceability of the forum selection requirement, it is advisable for potential franchisees to seek legal counsel to fully understand their rights and obligations under both the franchise agreement and Maryland law. This will help them make informed decisions about dispute resolution options should a conflict arise with All States M.E.D.