What is the alternative to a general release that a Bee Organized franchisee and their owners may be required to provide?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
Amendments to the Bee Organized Franchise Disclosure Document
Item 17, "Renewal, Termination, Transfer and Dispute Resolution," is supplemented, by the addition of the following:
- A. The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
- B. A Franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
- C. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
- D. The Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et seq.).
No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to the 2025 Bee Organized Franchise Disclosure Document, a general release is typically required as a condition of renewal, sale, and/or assignment/transfer of the franchise. However, in Maryland, this general release does not apply to any liability under the Maryland Franchise Registration and Disclosure Law. This means that while a franchisee might be required to sign a general release, it will not prevent them from pursuing claims related to violations of Maryland franchise law. This is further reinforced by the statement that no agreement signed by a franchisee can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by the franchisor. This provision supersedes any other conflicting terms in any document executed in connection with the franchise.
This protection ensures that Bee Organized franchisees in Maryland retain their rights under state franchise law, regardless of any general releases they may sign. It specifically allows a franchisee to bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, provided that such claims are brought within three years after the grant of the franchise. This amendment acknowledges the requirements of Maryland franchise law and aims to provide clarity and protection to franchisees operating in that state.
For a prospective Bee Organized franchisee, especially in Maryland, this means that they cannot be compelled to waive their rights under the Maryland Franchise Registration and Disclosure Law through a general release. This offers an additional layer of security and recourse in case of disputes or violations related to franchise law within the state. Franchisees should be aware of this provision and understand their rights under Maryland law, ensuring they can seek legal remedies if necessary, within the specified timeframe.