For All States M.E.D. franchisees, what right are they unable to waive regarding filing a lawsuit in Maryland?

According to the 2024 All States M.E.D. Franchise Disclosure Document, Maryland franchise regulations stipulate that it is considered an unfair or deceptive practice for All States M.E.D. to require a franchisee to waive their right to file a lawsuit in Maryland if they are claiming a violation of Maryland Franchise Law. This provision is included in the Maryland Addendum to the Franchise Agreement. However, the FDD also notes that because the franchise agreement provides that disputes are resolved through arbitration, there is some dispute as to whether this forum selection requirement is legally enforceable, in light of the Federal Arbitration Act.

This means that while All States M.E.D. franchisees in Maryland generally cannot be forced to waive their right to sue under Maryland Franchise Law, the enforceability of this right may be subject to legal challenges due to the arbitration clause in the franchise agreement and the potential preemption by the Federal Arbitration Act.

Prospective franchisees should be aware of this potential conflict and seek legal counsel to understand their rights and obligations under both Maryland law and the franchise agreement. They should also inquire with All States M.E.D. about how they handle disputes in Maryland and whether they have faced any legal challenges regarding the enforceability of the arbitration clause.