Does the general release required for renewal, sale, assignment, or transfer of an Alloy franchise apply to liability under the Maryland Franchise Registration and Disclosure Law?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 general release required for renewal, sale, assignment, or transfer of an Alloy franchise does not apply to liability under the Maryland Franchise Registration and Disclosure Law. This protection is explicitly stated in addenda to both the Franchise Agreement and the Area Development Agreement for franchisees in Maryland.
Specifically, the addendum to the Franchise Agreement includes a sentence added to the end of Section 4.b, Renewal, stating that "The general release required as a condition of renewal shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law." A similar sentence is added to the end of Section 11.D, Conditions of Transfer, clarifying 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."
For those entering into an Area Development Agreement with Alloy in Maryland, similar protections are in place. The addendum to the Area Development Agreement includes a sentence added to the end of Section 9.B, Conditions of Transfer, stating: "The general release required as a condition of assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law." This ensures that franchisees in Maryland are not waiving their rights under Maryland franchise law when renewing, selling, assigning, or transferring their franchise.
This provision is favorable for prospective Alloy franchisees in Maryland, as it protects their rights under the Maryland Franchise Registration and Disclosure Law, regardless of any general releases signed during renewal, sale, assignment, or transfer. This ensures that franchisees retain the ability to pursue claims under Maryland law if necessary, without being barred by a general release.