Does the Bor Restoration General Release have any impact on future franchise agreements?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
The Franchise Agreement requires Franchisee to sign a general release as a condition of renewal, sale, termination, and franchise transfer.
These covenants shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law. b.
A franchisee may bring a lawsuit in Maryland for claims under the Maryland Franchise Registration and Disclosure Law. c.
Any claim under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise. d.
All representations requiring prospective franchisees to assent to a release, estoppel, or waiver of liability are not intended to nor shall they act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. e.
Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance.
Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. f.
To the extent this Addendum will be deemed to be inconsistent with any terms or conditions of said Franchise Agreement or exhibits or attachments thereto, the terms of this Addendum will govern. g.
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor.
This provision supersedes any other term of any document execute
Source: Item 23 — Receipts (FDD pages 40–202)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, the franchise agreement requires franchisees to sign a general release under certain conditions, specifically renewal, sale, termination, and franchise transfer. This release, however, does not apply to any liability under the Maryland Franchise Registration and Disclosure Law, meaning franchisees in Maryland retain their rights under that law.
In Maryland, a franchisee can still bring a lawsuit for claims under the Maryland Franchise Registration and Disclosure Law, and such claims must be brought within three years after the franchise is granted. Furthermore, any representations requiring franchisees to waive liability do not act as a waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. This addendum ensures that franchisees in Maryland do not waive their rights under state franchise law, including claims of fraud in the inducement, and can rely on statements made by Bor Restoration or its representatives.
This provision in the addendum supersedes any other conflicting terms in the franchise agreement or related documents. Additionally, the Maryland Securities Commissioner requires a financial assurance based on Bor Restoration's financial condition, leading to the deferral of initial fees and payments until Bor Restoration completes its pre-opening obligations. This addendum is designed to protect the franchisee's rights under Maryland law, ensuring they are not disadvantaged by standard release clauses in the franchise agreement.