For Auntie Annes franchises in Maryland, how is the Disclosure Document amended?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
e terms of Item 12 of the Disclosure Document and Section 4 (Reserved Rights) of the Franchise Agreement (as applicable), we will not compete unfairly with you within a reasonable area.
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- Notwithstanding the terms of Section 13.1 (Indemnification) of the Franchise Agreement, you will not be required to indemnify the Affiliated Parties for any liability caused by your proper reliance on or use of procedures or materials provided by us or caused by our negligence.
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- Section 15.4.B. (Restrictive Covenants: Post Term) of the Franchise Agreement is revised to limit the geographical extent of the post-term covenant not to compete to an area of reasonable size, for all franchises sold in the State of Indiana.
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- The prohibition by Indiana Code § 23-2-2.7-1(7) against unilateral termination of the franchise without good cause or in bad faith, good cause being defined therein as ". . . a material breach of the franchise agreement . . . ," supersede any contrary provisions contained in Section 17 (Default and Termination) of the Franchise Agreement in the State of Indiana.
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- The provisions of the Franchise Agreement relieving both parties from liability for punitive damages will not apply to franchises offered and sold in the State of Indiana.
MARYLAND ADDENDUM TO DISCLOSURE DOCUMENT
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, the Disclosure Document for Auntie Anne's Franchisor SPV LLC for use in the State of Maryland is amended as follows:
ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION:
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- No release language required on renewal, transfer, or signing the Franchise Agreement will relieve us or any other person, directly or indirectly, from liability imposed by the Maryland Franchise Registration and Disclosure Law.
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- No provision of the Disclosure Document or Franchise Agreement will be construed as a release, estoppel, or waiver by you of any liability we incur under the Maryland Franchise Registration and Disclosure Law.
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- Item 17.v. of this Disclosure Document is modified as follows:
- You can enter into litigation with us in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, as long as the nature of the litigation is not the type of dispute, controversy, claim, action or proceeding which would be subject to arbitration under the Franchise Agreement.
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Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, the document is amended in recognition of the requirements of the Maryland Franchise Registration and Disclosure Law. Item 17, which covers renewal, termination, transfer, and dispute resolution, is specifically addressed. The amendment clarifies that no release language required on renewal, transfer, or signing the Franchise Agreement will relieve Auntie Annes from liability imposed by the Maryland Franchise Registration and Disclosure Law. Additionally, no provision of the Disclosure Document or Franchise Agreement will be construed as a release, estoppel, or waiver by the franchisee of any liability Auntie Annes incurs under the Maryland Franchise Registration and Disclosure Law.
Item 17.v of the Disclosure Document is modified to allow franchisees to enter into litigation with Auntie Annes in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, provided the litigation is not subject to arbitration under the Franchise Agreement. Furthermore, any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
Additionally, the FDD states that if the franchise is to be operated in Maryland, the franchisee should not sign the acknowledgement. The purpose of this Acknowledgement is to determine whether any statements or promises were made to the franchisee that Auntie Annes has not authorized or that may be untrue, inaccurate or misleading, to be certain that the franchisee has been properly represented in this transaction, and to be certain that the franchisee understands the limitations on claims they may make by reason of the purchase and operation of their franchise. The franchisee cannot sign or date this Acknowledgement the same day as the Receipt for the Franchise Disclosure Document, but must sign and date it the same day they sign the Franchise Agreement and pay their franchise fee.