Does the Alloy Area Development Agreement require franchisees to acknowledge the non-occurrence of acts that would constitute a violation of the Maryland Franchise Registration and Disclosure Law?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
- Any provision in the Agreement that requires you to disclaim the occurrence and/or acknowledge the non-occurrence of acts that would constitute a violation of the Maryland Franchise Registration and Disclosure Law is not intended to nor will it act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
-
- No disclaimer, questionnaire, clause, or statement signed by a franchisee in connection with the commencement of the franchise relationship shall be construed or interpreted as waiving any claim of fraud in the inducement, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a material inducement to a franchisee's investment. This provision supersedes any other or inconsistent term of any document executed in connection with the franchise.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, any provision in the Area Development Agreement that requires a franchisee to disclaim the occurrence and/or acknowledge the non-occurrence of acts that would constitute a violation of the Maryland Franchise Registration and Disclosure Law is not intended to, nor will it act as a release, estoppel, or waiver of any liability incurred under that law. This protection is specifically outlined in an addendum to the Area Development Agreement required for the state of Maryland. This addendum ensures compliance with Maryland statutes and regulations.
This means that even if the Area Development Agreement contains language that could be interpreted as the franchisee waiving their rights or acknowledging that no violations have occurred, such language will not be legally binding in relation to the Maryland Franchise Registration and Disclosure Law. The franchisee retains their rights and protections under this law, regardless of any disclaimers or acknowledgments they may have signed.
Furthermore, the Alloy FDD states that no disclaimer, questionnaire, clause, or statement signed by a franchisee in connection with the commencement of the franchise relationship shall be construed or interpreted as waiving any claim of fraud in the inducement, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a material inducement to a franchisee's investment. This provision supersedes any other or inconsistent term of any document executed in connection with the franchise.
In practical terms, this ensures that Alloy franchisees in Maryland are not inadvertently giving up their legal rights under Maryland franchise law simply by signing the standard Area Development Agreement or related documents. This addendum provides an additional layer of protection for franchisees, ensuring that they can pursue legal remedies if they believe their rights have been violated, despite any potentially conflicting language in the agreement.