Does the Alloy Franchise Agreement allow for provisions that act as a release of liability under the Maryland Franchise Registration and Disclosure Law?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
This Addendum pertains to franchises sold in the State of Maryland and is for the purpose of complying with Maryland statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended as follows:
- The following sentence is hereby added to the end of Section 4.b, Renewal:
The general release required as a condition of renewal shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
- The following sentence is hereby added to the end of Section 9.A, Initial Franchise Fee:
Due to the financial condition of the Franchisor, the Maryland Securities Commissioner has required a financial assurance. Therefore, we have posted a surety bond which is on file with the Maryland Securities Division. A copy of the surety bond is attached as an exhibit to the Maryland addenda pages. The surety bond covers the initial franchise fee for a single unit franchise or an area development franchise for three units, which at this time is all we are offering and selling in the State of Maryland. We will not offer and sell any other area development franchises in the State of Maryland.
- The following sentence is hereby added to the end of Section 11.D, Conditions of Transfer:
The general release required as a condition of assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
- The following sentence is hereby added to the end of Section 15.B, Waiver/Integration:
Nothing in this Section 15.B, however, will 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 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, several provisions are in place to ensure that the Franchise Agreement does not act as a release of liability under the Maryland Franchise Registration and Disclosure Law. An addendum to the Franchise Agreement specifically addresses compliance with Maryland statutes and regulations.
Specifically, the addendum states that the general release required as a condition of renewal or assignment/transfer of the franchise will not apply to any liability under the Maryland Franchise Registration and Disclosure Law. This means that even if a franchisee signs a general release, they do not waive their rights to pursue claims under Maryland franchise law.
Furthermore, the FDD states that any provision requiring a franchisee to disclaim or acknowledge actions that would violate the Maryland Franchise Registration and Disclosure Law will not act as a release, estoppel, or waiver of liability under that law. This ensures that franchisees cannot inadvertently waive their rights through disclaimers or acknowledgments within the agreement. The FDD also clarifies that no statement, questionnaire, or acknowledgment signed by a franchisee will waive claims of fraud or disclaim reliance on statements made by Alloy or its representatives.