What Maryland law governs the provisions contained in Belocal franchise documents?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The Maryland Securities Division requires that certain provisions contained in franchise documents be amended to be consistent with Maryland law, including the Maryland Franchise Registration and Disclosure Law, MD. BUS. REG. CODE ANN. § 14-201 et seq. (2015 Repl. Vol.) ("Law"). To the extent that this Agreement contains provisions that are inconsistent with the following, such provisions are hereby amended:
- a. The general release required as a condition of renewal, sale, assignment/transfer, refund of the initial fee, and/or a reduction in the size of the Territory will not apply to any liability under the Law.
- b. Any acknowledgments or representations of Franchisee made in the Agreement which disclaim the occurrence and/or acknowledge the non-occurrence of acts that would constitute a violation of the Law are not intended to, nor will they, act as a release, estoppel, or waiver of any liability incurred under the Law.
- c. A Franchisee may bring a lawsuit in Maryland for claims arising under the Law to the extent required by the Law, unless preempted by the Federal Arbitration Act.
- d. The limitation on the period of time when mediation and/or arbitration claims must be brought will not act to reduce the three-year statute of limitations afforded Franchisee for bringing a claim arising under the Law. Any claims arising under the Law must be brought within three years after the grant of the franchise.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the Maryland Franchise Registration and Disclosure Law, specifically MD. BUS. REG. CODE ANN. § 14-201 et seq. (2015 Repl. Vol.) (referred to as "Law"), governs certain provisions within Belocal's franchise documents.
This law necessitates amendments to specific provisions in Belocal's franchise documents to ensure consistency with Maryland law. These amendments cover several key areas, including general releases required for renewal, sale, assignment/transfer, refund of the initial fee, or territory reduction. Such releases will not apply to liabilities arising under the Law. Furthermore, acknowledgments or representations made by the franchisee that disclaim violations of the Law will not act as a release, estoppel, or waiver of liability.
The Maryland addendum also clarifies that franchisees have the right to bring lawsuits in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, unless preempted by the Federal Arbitration Act. Additionally, the limitation on the time period for mediation or arbitration claims will not reduce the three-year statute of limitations afforded to franchisees for claims arising under the Law, with all such claims needing to be brought within three years after the franchise grant.
These stipulations protect Belocal franchisees in Maryland by ensuring that their rights under state law are upheld and that they have recourse for legal claims within the specified timeframe.