For Alloy franchises sold in Maryland, what law does the addendum to the Franchise Agreement aim to comply with?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM TO THE FRANCHISE AGREEMENT REQUIRED FOR MARYLAND FRANCHISEES
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, the addendum to the Franchise Agreement for franchises sold in Maryland is for the purpose of complying with Maryland statutes and regulations, specifically the Maryland Franchise Registration and Disclosure Law. This is achieved through several amendments to the franchise agreement.
First, the addendum ensures that the general release required as a condition of renewal does not apply to any liability under the Maryland Franchise Registration and Disclosure Law. Second, due to Alloy's financial condition, the Maryland Securities Commissioner has required a financial assurance, which is a surety bond on file with the Maryland Securities Division. This bond covers the initial franchise fee for a single unit franchise or an area development franchise for three units, which is all that Alloy is offering and selling in Maryland at the time of the FDD.
Third, the addendum states that the general release required as a condition of assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law. Finally, the addendum clarifies that no part of the agreement will act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. These stipulations protect the franchisee's rights and ensure compliance with Maryland's franchise regulations.