In Maryland, is the Franchise Agreement provision for termination upon bankruptcy of the franchisee by Better Blend always enforceable?

According to Better Blend's 2024 Franchise Disclosure Document, the Franchise Agreement contains a provision that allows Better Blend to terminate the agreement if the franchisee declares bankruptcy. However, the Maryland Addendum to the Disclosure Document clarifies that this provision may not be fully enforceable. Specifically, the addendum states that the termination upon bankruptcy provision in the Franchise Agreement may not be enforceable under federal bankruptcy law.

This means that while the standard Franchise Agreement gives Better Blend the right to terminate the agreement if a franchisee files for bankruptcy, federal law might override this provision. A franchisee's bankruptcy case would be subject to the protections and regulations of federal bankruptcy law, which could prevent Better Blend from enforcing the termination clause.

For a prospective Better Blend franchisee in Maryland, this is an important consideration. While the Franchise Agreement seems to allow termination upon bankruptcy, this right is not guaranteed and could be limited by federal law. It would be prudent for a potential franchisee to consult with a legal professional to fully understand their rights and obligations in the event of bankruptcy, and how federal law interacts with the franchise agreement.