For Bft, what is the significance of the Developer being a resident of Maryland?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS RIDER (this "Rider") is made and entered into by and between BFT FRANCHISE SPV, |
|---|
| LLC, a Delaware limited liability company with its principal business address at 17877 Von Karman Ave., |
| Suite 100 Irvine, CA 92614 ("Franchisor"), and, |
| whose principal business address is |
| ("Developer"). |
| 1. |
| Background. Franchisor and Developer are parties to that certain Multi-Unit Agreement |
| dated |
| , 20 (the "Multi-Unit Agreement") that has been signed concurrently |
| with the signing of this Rider. This Rider supersedes any inconsistent or conflicting provisions of the Multi |
| Unit Agreement. Terms not otherwise defined in this Rider have the meanings as defined in the Multi-Unit |
| Agreement. |
| This Rider is annexed to and forms part of the Multi-Unit Agreement. This Rider is being |
| signed because (a) Developer is a resident of the State of Maryland; or |
| (b) the Studios that Developer |
| develops under the |
| Multi-Unit Agreement |
| are or will be developed |
| in the State of Maryland; or |
| (c) the offer |
| to sell is made in the State of Maryland; or |
| (d) the offer to buy is accepted in the State of Maryland. |
| 2. |
| Insolvency. |
| The following is added to the end of Section 8.A.(1)(b) (Termination of |
| Franchise by Franchisor) |
| of the Multi-Unit Agreement: |
| The provision which provides for termination upon Developer's |
| bankruptcy might not be |
| enforceable under federal bankruptcy law |
| (11 U.S.C. Sections 101 et seq.). |
| 3. |
| Release. The following is added to the end of Section 9.B |
| (Transfer of Interest - |
| By |
| Developer and its Owners) |
| of the Multi-Unit Agreement: |
| Pursuant to COMAR 02.02.08.16L, 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. |
| 4. |
| Governing Law; Consent to Jurisdiction. The following is added to the end of Sections 12.A |
| (Governing Law) |
| and 12.F (Consent to Jurisdiction) |
| of the Multi-Unit Agreement: |
| ; provided, however, Developer |
| may bring a lawsuit in Maryland for claims arising under |
| the Maryland Franchise Registration and Disclosure Law. Maryland law may apply to |
| claims arising under the Maryland Franchise Registration and Disclosure Law. |
| 5. |
| Mediation; Mandatory Binding Arbitration. The following is added to the end of Sections |
| 12.C (Mediation) |
| and 12.D |
| (Mandatory Binding Arbitration) |
| of the Multi-Unit Agreement: |
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, if the Developer is a resident of Maryland, a rider is added to the Multi-Unit Agreement to account for specific Maryland franchise laws. This rider addresses several key legal considerations.
First, any release required as a condition of renewal or transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law. This means a Bft franchisee in Maryland retains their rights to make claims under Maryland law, even when renewing or transferring the franchise.
Second, while the standard agreement allows for termination upon bankruptcy, the rider acknowledges that this provision might not be enforceable under federal bankruptcy law. However, Bft will still attempt to enforce it to the extent possible.
Third, a Bft franchisee in Maryland has the right to bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, regardless of the agreement's general choice of law and jurisdiction. Additionally, any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise. The rider also clarifies that a Maryland franchise regulation considers it unfair or deceptive to require a franchisee to waive their right to file a lawsuit in Maryland for violations of Maryland franchise law, although the enforceability of this regulation is subject to some dispute due to the Federal Arbitration Act.