Does the general release required for renewal, sale, or assignment/transfer of an Alloy franchise apply to 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, the general release required as a condition of renewal, sale, or assignment/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 the addendum to the franchise agreement required for Maryland franchisees. This addendum amends sections of the standard franchise agreement to ensure compliance with Maryland statutes and regulations.
Specifically, the addendum 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." This means that franchisees in Maryland are not waiving their rights to pursue claims under Maryland franchise law when they renew, sell, or transfer their franchise.
Furthermore, the addendum includes a sentence added to the end of Section 15.B, Waiver/Integration, stating that "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." This provision reinforces the protection for Maryland franchisees by ensuring that no part of the waiver or integration clauses in the agreement can be interpreted as a release of liability under Maryland franchise law. These stipulations provide additional security for franchisees operating in Maryland, ensuring their rights under state law are preserved during the franchise lifecycle.
In addition to these protections, the Alloy FDD also specifies that franchisees may bring lawsuits in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, and that any such claims must be brought within three years after the date of the Franchise Agreement. This further clarifies the legal recourse available to franchisees in Maryland and ensures that they have a local venue for resolving disputes related to franchise law.