For Big Apple Bagels in Maryland, what is the purpose of the addendum to the Franchise Disclosure Document?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT R BAB SYSTEMS, INC. ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF MARYLAND
The BAB Systems, Inc. Franchise Disclosure Document ("FDD") for use in the State of Maryland is modified in accordance with the following:
- Item 17 of the Franchise Disclosure Document on "Renewal, Termination, Transfer and Dispute Resolution" is amended by the addition of the following:
The general release required as a condition of renewal and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
Franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
The provision in the BAGELS Franchise Agreement which provides for termination upon bankruptcy of the franchisee may not be enforceable under federal bankruptcy law (11. U.S.C. Section 101 et. seq.).
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the addendum to the Franchise Disclosure Document (FDD) for the state of Maryland modifies the standard franchise agreement to comply with Maryland franchise law. This ensures that certain provisions within the franchise agreement do not violate the franchisee's rights under Maryland's franchise regulations.
Specifically, the addendum addresses issues such as general releases, the franchisee's right to bring lawsuits in Maryland, the statute of limitations for claims under Maryland franchise law, and the enforceability of termination clauses related to franchisee bankruptcy. It clarifies that general releases required for renewal or transfer do not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. Additionally, it confirms a franchisee's right to sue in Maryland for claims arising under this law and sets a three-year limit for bringing such claims.
Furthermore, the addendum modifies specific paragraphs within the Bagels Franchise Agreement, including those related to renewal, transfer, marketing and promotion, termination, governing law, and limitation of claims. For example, it ensures that franchisees receive an annual accounting of advertising fees collected by Big Apple Bagels. It also states that the representations made by the developer are not intended to act as a release of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
In essence, the Maryland addendum serves to protect the interests of Big Apple Bagels franchisees by aligning the franchise agreement with Maryland law, providing additional clarity and safeguards regarding their rights and obligations within the state.