Does a general release required for renewal, sale, or assignment/transfer of an All States M.E.D. franchise apply to liabilities under the Maryland Franchise Registration and Disclosure Law?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
MARYLAND ADDENDUM TO THE FRANCHISE AGREEMENT
If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control.
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- Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
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- A 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.
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- This franchise agreement provides that disputes are resolved through arbitration. A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Maryland claiming a violation of the Maryland Franchise Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable.
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- All representations requiring prospective franchisees 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.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, a general release required as a condition of renewal, sale, and/or assignment/transfer does not apply to any liability under the Maryland Franchise Registration and Disclosure Law. This protection is explicitly stated in the Maryland Addendum to both the Franchise Agreement and the Area Development Agreement.
This means that if an All States M.E.D. franchisee in Maryland is asked to sign a general release when renewing their franchise agreement or when selling or transferring their franchise, this release will not prevent them from pursuing claims related to violations of the Maryland Franchise Registration and Disclosure Law. This provision ensures that franchisees retain their rights under Maryland franchise law, even when signing a general release.
Furthermore, the FDD states that all representations requiring prospective franchisees to assent to a release, estoppel, or waiver of liability are not intended to act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. This reinforces the protection afforded to franchisees under Maryland law, ensuring that they cannot inadvertently waive their rights through standard contractual language.