Does the general release required for assignment/transfer of an Alloy franchise apply to liabilities under the Maryland Franchise Registration and Disclosure Law?

According to Alloy's 2025 Franchise Disclosure Document, the general release required as a condition of assignment or transfer of an Alloy franchise does not apply to any liability under the Maryland Franchise Registration and Disclosure Law. This protection is specifically outlined in an addendum to the franchise agreement for Maryland franchisees. This addendum ensures that franchisees in Maryland retain their rights and protections under Maryland law, even when transferring the franchise.

This provision is crucial for prospective Alloy franchisees in Maryland because it prevents them from inadvertently waiving their rights under the Maryland Franchise Registration and Disclosure Law when they sell or transfer their franchise. The Maryland Franchise Registration and Disclosure Law is designed to protect franchisees from unfair practices by franchisors, and this clause ensures that franchisees can still pursue claims under this law, even after a transfer. This addendum applies to both the Franchise Agreement and the Area Development Agreement.

In addition to assignment/transfer, the addendum also clarifies that general releases required for franchise renewal do not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. Furthermore, no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under any applicable state franchise law, including fraud in the inducement, or disclaim reliance on any statement made by the franchisor. This comprehensive protection ensures that Alloy franchisees in Maryland are not disadvantaged by standard release clauses in the franchise agreement.