In Maryland, if a release is required as a condition of assignment/transfer for a Bft franchise, does it apply to claims arising under the Maryland Franchise Registration and Disclosure Law?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
end of the 4th paragraph under the "Brand Development Fund" section of Item 11:
You may obtain a statement of the expenses incurred by the Fund during its most recently completed fiscal year by making a written request to us.
- The following is added to the end of the "Summary" sections of Item 17.c, entitled Requirements for renewal or extension, and Item 17.m, entitled Conditions for franchisor approval of transfer:
However, any release required as a condition of renewal and/or assignment/transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law.
3.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, any release required as a condition of assignment or transfer of a Bft franchise in Maryland will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law. This protection is explicitly stated in an addendum to the standard franchise agreement for franchisees in Maryland. This addendum is crucial because it modifies the standard terms of the franchise agreement to comply with Maryland law. This ensures that franchisees do not inadvertently waive their rights under Maryland's franchise laws when they renew or transfer their franchise. This protection is codified under COMAR 02.02.08.16L. This applies to both the standard Franchise Agreement and the Multi-Unit Agreement.
This provision is significant for prospective Bft franchisees in Maryland because it safeguards their ability to pursue legal claims related to franchise registration and disclosure, even if they sign a release as part of a renewal or transfer. The Maryland Franchise Registration and Disclosure Law is designed to protect franchisees from unfair practices by franchisors, and this clause ensures that franchisees retain their rights under that law. This protection is particularly important in the context of franchise transfers, where franchisees may feel pressured to sign broad releases to facilitate the sale of their business.
Bft's approach aligns with the intent of Maryland franchise law, which seeks to prevent franchisors from using releases to shield themselves from liability for violations of the law. This ensures that franchisees in Maryland retain their legal rights and protections, even when signing releases related to renewal or transfer of the franchise. This is a beneficial term for franchisees, as it prevents them from unintentionally waiving important legal rights.